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Benefit Transfer in Environmental Valuation: Methods & Limitations

Learn about benefit transfer in environmental valuation, using valuation studies, adjusting for income and country differences, and overcoming limitations in finding comparable substitutes.

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Benefit Transfer in Environmental Valuation: Methods & Limitations

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  1. Benefit Transfer Bangkok 2013

  2. When to use benefit transfer? • Project has small budget, cannot do primary valuation • Many suitable valuation studies available

  3. What is benefit transfer? • Extrapolate from valuation studies done elsewhere to own site • For example, use value of natural mangrove forest in Sundarbon in southwest Bangladesh to value planted mangrove in south central Bangladesh • Ideal to use similar environmental good in similar society

  4. Method • Use value of site, value per hectare, or valuation function • Want most similar comparison • E.g. two similar sites- use value of site • Small site versus large site- value per hectare • Natural site versus manmade- use valuation function that recognizes two have different values

  5. Across Countries • Best to use values from own country • Must adjust for income if use values across countries- many sites have income elasticity near 1- values proportional to income • Adjust for known differences between countries- some species or places have high values to a specific culture

  6. Limitation • Failure to find close substitute • Compare a tree to an air conditioner for cooling • May be closer to an umbrella • Compare a polar bear to a snail • Keystone species worth much more than non-mammals • Compare remote beach to Miami Beach • Places close to large populations are worth more than inaccessible sites • Rank sites by NPP • People rarely value natural sites for NPP

  7. References • “Environmental Valuation in South Asia” by A. K. EnamulHaque, M. N. Murty, and PriyaShyamsundar, 2011 • “The International Handbook On Non-Market Environmental Valuation” by Jeff Bennett 2011 • “Valuing the Environment in Developing Countries: Case Studies” by David Pearce, Corin Pearce, Charles Palmer 2002 • “Economic valuation of the environment: Methods and case studies” by Guy Garrod and K.G. WIllis 1999 • “Valuing Environmental Preferences: Theory and Practice of the Contingent Valuation Method in the US, EU, and Developing Countries” Ian Bateman and K.G. Willis 2001

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