Valuating Natural Resources and Ecosystem Services: Systematic Review of Methods in Use

Abstract

The relevance of an ecosystem approach, which involves addressing ecosystems as an object of research, economically evaluating ecosystem services, and including the existing variety of evaluation methods and their classifications for the estimation of nature’s value, was the focus of this study. So, the aim of the current research is to develop an evaluation theory by refining approaches and methods for the economic evaluation of natural resources and ecosystem services. The research object was the evaluation practice of the former USSR, Russia, and countries outside Russia. Employing research methods of systematization and content analysis with evolutionary and ecosystem approaches, about three hundred scientific papers have been the subject of this review. The study (1) reveals the evolutionary changes in economic evaluation approaches and methods of natural resources and ecosystem services; (2) discloses the features of the existing classifications of economic evaluation methods; and (3) offers the author's classification, which is based on the five classification criteria: evaluation type, evaluation approaches, evaluation character (nature), evaluation methods, and market discourse. We believe that understanding the development of scientific thought about evaluation methods and their classifications will make it possible to increase the reliability of the estimation results in natural resource and environmental economics.

A Participatory Approach to Economic Valuation of Ecosystem Services in Andean Amazonia: Three Country Case Studies for Policy Planning

“…Following identification and prioritization of the ecosystem services at each site, we proceeded on to valuation based on the market price, avoided cost, and value transfer methods [47]. International experience in the economic valuation of natural resources and ecosystem services revealed that these methods are usually used when there is limited information access [48]. The first approach employs prevailing prices for goods and services traded in domestic markets [49].…”

“…In general, for the economic valuation of the prioritized ecosystem services in each region, we followed these steps (Figure 2): (i) identification of the main characteristics of the economic activity related to the ES under analysis (population, suppliers, and participants in the value chain); (ii) identification of the threats to the ES from sociocultural, institutional, and environmental perspectives; (iii) selection of an estimation strategy based on the threat(s) identified (in step (ii)) and information limitations; (iv) firstly, using the valuation approaches (price market based, avoided costs, and values transfer), calculation of the ES value based on two scenarios: one in which the local government does not pursue any conservation actions (status quo situation), and another in which the local government does take conservation actions (optimized situation) that Following identification and prioritization of the ecosystem services at each site, we proceeded on to valuation based on the market price, avoided cost, and value transfer methods [47]. International experience in the economic valuation of natural resources and ecosystem services revealed that these methods are usually used when there is limited information access [48]. The first approach employs prevailing prices for goods and services traded in domestic markets [49].…”

A Review of Research on Progress in the Theory and Practice of Eco-Product Value Realization

“…The hedonic price method estimates the economic value of pure public ecological products (e.g., environmental quality) based on individuals' willingness to pay for them. Additionally, scholars have extensively employed non-traditional valuation methods such as the factor income method, shadow pricing method, and market price method [37][38][39][40]. The factor income method is employed to estimate the future expected economic value of quasi-public ecological products or operational ecological products (such as land, water, wood, etc.)…”

The economic valuation of ecosystem services: bibliometric analysis

“…The development of the ES field of study is generalised from the studies by Daily (1997) and Costanza et al (1997). Initiatives such as the Millennium Ecosystem Assessment (MEA) Project (2005) and The Economics of Ecosystems and Biodiversity (TEEB) (Kumar, 2010) are milestones that have converted the concept of ES into a political instrument in order to achieve the sustainable use of natural resources (Macaskill & Lloyd-Smith, 2022;Ignatyeva et al, 2022). Thus, the valuation of ecosystem services aims to provide stakeholders with knowledge useful for policy design, strategy definition and ecosystem management by identifying services as well as their flow and relative importance to society (Mirici, 2022).…”