ENVIRONMENTAL VALUATION AND ITS CHALLENGES: AN IN-DEPTH ANALYSIS

Abstract

Environmental valuation, a pivotal aspect of environmental economics, endeavors to quantify the economic worth of environmental goods and services, facilitating decision-making in the face of increasing environmental degradation. As humanity faces challenges like climate change, biodiversity loss, and resource depletion, understanding the economic worth of environmental resources becomes imperative. This paper explores the theoretical foundations, methodological approaches, and challenges inherent in environmental valuation.

Methodologically, the paper delves into various valuation approaches, including contingent valuation, travel cost method, hedonic pricing, and choice experiments. It explores the challenges posed by the non-market nature of environmental goods, temporal and spatial dynamics, complex ecosystem interactions, and the global scale of environmental issues. The existence value, spatial heterogeneity, economic externalities, and uncertainties associated with dynamic social values and option values are also discussed.

Recognizing the need for up-to-date methods, the paper outlines technological and methodological innovations while acknowledging the challenges posed by economic globalization and teleconnections. Environmental valuation emerges as a crucial discipline, providing insights for sustainable resource management and fostering a harmonious balance between economic prosperity and environmental well-being.

Key words: Environmental valuation, challenges, neo classical economics, shadow pricing. Travel cost, hedonic pricing.