Environmental Economics and Ecosystem Services
RPA’s work very frequently involves the application of environmental economics to inform decision making on policies, regulations, programmes or particular projects. Whilst the decision contexts may vary and may relate to different issues (such as chemicals, the marine environment, flooding and erosion, energy and climate change, among others) the tools and the general principles applied are fairly consistent.
In simple terms, the overall objective of applying environmental economics in decision making is to ensure that all impacts are included in final decision making. This is achieved by expressing all impacts in a common unit, (ideally) that of money. This enables all impacts to be directly compared with one another as part of wider cost-benefit analysis of the options – allowing one to compare the financial costs of an action with the wider environmental costs and benefits all valued in monetary terms. Without the valuation component, such comparisons cannot be made adequately and environmental costs and benefits or the ecosystem services affected may not be given sufficient weight in a decision.
Although the principle is simple, valuing environmental goods, services and impacts is very challenging. It requires a great deal of expertise and familiarity with the available tools and methods. RPA has been at the forefront of applying such methods in the UK and Europe since they first gained traction with regulators and policymakers in the early 1990s.
The ‘ecosystem services approach’ is a more recent but related approach to assessing nonmarket goods and services that is gaining in popularity. It involves considering the services provided by the environment and ecosystems and valuing them as assets. These assets can then be included in economic assessments of costs and benefits for projects, and mitigation and compensation measures can be tailored to provide the same benefits as those lost.
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