The physical environment has a profound effect on the way in which we live our daily lives. Environmental resources have huge value both in and of their own right, and because of the direct benefits that they provide humans. Often the need for economic development and the preservation of environmental quality appear to be in competition with each other, particular when ‘economic’ development is narrowly defined as ‘financial’ development. There is growing recognition in global governance that when the full value of the environment is considered, rather than just the part that can easily be measured in monetary terms, governments tend to approve different types of development projects. In 2001 the United Nations began a comprehensive assessment of the consequence of ecosystem change on human well-being. They concluded that governments should work to ensure that the negative trade-offs between economic development and environmental degradation were minimized and that governments actively seek synergies between environmental and economic outcomes.

One tangible way to implement these recommendations in policy making is by using an ecosystem services approach to environmental valuation. This allows you to explicitly recognize and value the broad range of benefits that we and future generations receive from the environment. Traditional assessments of environmental value are often restricted to a consideration of the ‘use value’ of an environmental asset – for example how much hydroelectric revenue could be generated by damming a river – whilst ignoring the broad range of benefits that would result from leaving the river undammed. These benefits include the opportunity to undertake alternative development projects in the future (‘option value’), and a wide range of ‘non-use values’ including the importance of bequeathing a good quality environment to future generations, explicitly recognizing the cultural importance of the natural environment, particularly in our Aboriginal communities, and also the important role played by healthy and resilient ecosystem in mediating severe weather events. Continue reading →