3.2 Economic Valuation of Environmental Goods at a National Level
47
includes the user costs of exploiting natural resources as well as the social costs of
pollution emissions. Besides the natural resources, the national human resources
and institutional capital must be taken into account, which will not be discussed
here. Since the beginning of the 1990s, national stock accounting has started to
include natural capital (e.g., UN, 1993), besides earlier work in the late 1980s
(e.g., Repetto et aI, 1989). Although the "green national accounts" (Hamilton et
aI., 1996) are becoming more important in the development policy-making, two
major obstacles for achieving valuable results still remain:
• finding the feasible indicators for a country's natural capital and
• finding the corresponding prices or values for each of the indicators.
After giving a short overview of the potential methods of valuation for
environmental goods, the framework for economic valuation methods for PGRFA
conservation will be discussed more in detail. Besides discussing how to value
genetic resources, the question of measuring genetic resources has to be put
forward and some solutions are proposed.
3.2.1
General Concept of Assessing Environmental Goods
The natural assets (land, water, genetic resources and air), which contribute to a
sustainable development and which must therefore be included in a country's
natural stock accounting, can be divided into non-renewable and renewable
resources. Renewable resources, which provide a country with an unlimited
annuity by sustainable utilization, are agricultural land, forest, fisheries and
genetic resources as well as water and air. Non-renewable resources, namely
mineral resources and fossil fuels, reduce the overall natural capital stock of a
country, when utilized and not reinvested in other national assets (World Bank,
1997).
The concept is straightforward, still the identification of accurate indicators is
hampering the easy implementation. The World Bank, for instance, estimates the
natural capital at a country level by utilizing only protected areas as an indicator
for the national capital of genetic resources (World Bank, 1997). As Thiele (1994)
shows for the valuation of the tropical forest, the exploitation of timber is
calculated and integrated in a country's natural stock accounting, but seldom the
non-timber benefits, like the water storage capacity. Calculating all these other
benefits, the national and international interest to conserve the forest would be
sufficient for necessary action. Furthermore, there are non-timber forest benefits
calculations (see Lampietti et aI., 1995), but they do not take air, as a natural asset,
into consideration. By calculating the oxygen production of a country's vegetation,
mainly forest, the importance of natural assets would, however, significantly
increase.
All these examples showthat because of missing or incomplete markets, the
value of an environmental good is only partially reflected in its price.
Consequently, the total economic value of natural resources has to be defined by
breaking down the overall value into its various parts. Depending on the various
47
includes the user costs of exploiting natural resources as well as the social costs of
pollution emissions. Besides the natural resources, the national human resources
and institutional capital must be taken into account, which will not be discussed
here. Since the beginning of the 1990s, national stock accounting has started to
include natural capital (e.g., UN, 1993), besides earlier work in the late 1980s
(e.g., Repetto et aI, 1989). Although the "green national accounts" (Hamilton et
aI., 1996) are becoming more important in the development policy-making, two
major obstacles for achieving valuable results still remain:
• finding the feasible indicators for a country's natural capital and
• finding the corresponding prices or values for each of the indicators.
After giving a short overview of the potential methods of valuation for
environmental goods, the framework for economic valuation methods for PGRFA
conservation will be discussed more in detail. Besides discussing how to value
genetic resources, the question of measuring genetic resources has to be put
forward and some solutions are proposed.
3.2.1
General Concept of Assessing Environmental Goods
The natural assets (land, water, genetic resources and air), which contribute to a
sustainable development and which must therefore be included in a country's
natural stock accounting, can be divided into non-renewable and renewable
resources. Renewable resources, which provide a country with an unlimited
annuity by sustainable utilization, are agricultural land, forest, fisheries and
genetic resources as well as water and air. Non-renewable resources, namely
mineral resources and fossil fuels, reduce the overall natural capital stock of a
country, when utilized and not reinvested in other national assets (World Bank,
1997).
The concept is straightforward, still the identification of accurate indicators is
hampering the easy implementation. The World Bank, for instance, estimates the
natural capital at a country level by utilizing only protected areas as an indicator
for the national capital of genetic resources (World Bank, 1997). As Thiele (1994)
shows for the valuation of the tropical forest, the exploitation of timber is
calculated and integrated in a country's natural stock accounting, but seldom the
non-timber benefits, like the water storage capacity. Calculating all these other
benefits, the national and international interest to conserve the forest would be
sufficient for necessary action. Furthermore, there are non-timber forest benefits
calculations (see Lampietti et aI., 1995), but they do not take air, as a natural asset,
into consideration. By calculating the oxygen production of a country's vegetation,
mainly forest, the importance of natural assets would, however, significantly
increase.
All these examples showthat because of missing or incomplete markets, the
value of an environmental good is only partially reflected in its price.
Consequently, the total economic value of natural resources has to be defined by
breaking down the overall value into its various parts. Depending on the various