50
3 Economic Framework of Conservation
with national parks and public forests (e.g., Bowes and Krutilla, 1989). Other
examples for the utilization of the travel cost approach are listed in Appendix 4.
The concept of constructed markets aims to get resources users to state their
preferences for specific parts of biodiversity. The major approach of this valuation
technique is the contingent valuation method. As Carson et ai. points out (1995),
more than 2,000 studies have been conducted using the contingent valuation
method, but comparatively few relate to biodiversity. It has to be pointed out that
values estimated from constructed markets are discussed controversially. The
main criticism is summarized by Arrow: " ... verbal answers don't hurt the way
cash payments do ... " (Arrow, 1986). Some values estimated using the contingent
valuation method are listed in Appendix 4.
Existing market prices based on conventional markets can be utilized where an
impact on biodiversity effects actual production or productive capability. Some
studies, mainly valuing biodiversity by valuing the change in productivity or the
loss of earnings by a negative impact on biodiversity, were undertaken and are
listed in Appendix 4.
3.2.2
Method for Economic Valuation of PGRFA Conservation
The conservation of PGRFA must be understood as an investment, of which
benefits are expected with a long-term delay. Consequently, the appropriate level
of investment in conservation activities will be closely determined by the expected
benefits and related costs. Economic valuation of PGRFA can contribute to policy
and management decisions in guiding allocations of financial resources between
PGRFA conservation and alternative endeavors, as well as between various types
of PGRFA conservation activities (Artuso, 1994). Additionally, the valuation of
PGRFA requires considerations because of the relevance of opportunity cost
established by plant genetic resources conservation or the lack thereof. For policy
reasons, it is important to differentiate between the private value of plant genetic
resources (as the value of the opportunities foregone by the users: its private
opportunity cost) and the social opportunity cost (as the value of the opportunities
foregone by society as a whole) (von Braun and Virchow, 1997).
As described in general above, the values of natural assets are difficult to
estimate. This applies to PGRFA conservation in particular, because the
estimation of the non-use values is impractical and the use values are difficult to
capture. The intergenerational value of PGRFA and its relevant discount rates are
some of the main reasons for the difficulties in estimating the value of genetic
resources, besides the uncertainty of the future value of the resources (Pearce et
aI., 1991). Furthermore, the ecological threshold effects of diversity extinction
complicates the valuation (Perrings and Pearce, 1994). Therefore, only a short
overview of the valuation methods for PGRFA is given in this chapter.
The total economic value of PGRFA (TEV), specified as the overall value of
biodiversity, is divided into the direct use value (DUV), which is derived from the
use of PGRFA in production, consumption and utilization as well as into the non-
3 Economic Framework of Conservation
with national parks and public forests (e.g., Bowes and Krutilla, 1989). Other
examples for the utilization of the travel cost approach are listed in Appendix 4.
The concept of constructed markets aims to get resources users to state their
preferences for specific parts of biodiversity. The major approach of this valuation
technique is the contingent valuation method. As Carson et ai. points out (1995),
more than 2,000 studies have been conducted using the contingent valuation
method, but comparatively few relate to biodiversity. It has to be pointed out that
values estimated from constructed markets are discussed controversially. The
main criticism is summarized by Arrow: " ... verbal answers don't hurt the way
cash payments do ... " (Arrow, 1986). Some values estimated using the contingent
valuation method are listed in Appendix 4.
Existing market prices based on conventional markets can be utilized where an
impact on biodiversity effects actual production or productive capability. Some
studies, mainly valuing biodiversity by valuing the change in productivity or the
loss of earnings by a negative impact on biodiversity, were undertaken and are
listed in Appendix 4.
3.2.2
Method for Economic Valuation of PGRFA Conservation
The conservation of PGRFA must be understood as an investment, of which
benefits are expected with a long-term delay. Consequently, the appropriate level
of investment in conservation activities will be closely determined by the expected
benefits and related costs. Economic valuation of PGRFA can contribute to policy
and management decisions in guiding allocations of financial resources between
PGRFA conservation and alternative endeavors, as well as between various types
of PGRFA conservation activities (Artuso, 1994). Additionally, the valuation of
PGRFA requires considerations because of the relevance of opportunity cost
established by plant genetic resources conservation or the lack thereof. For policy
reasons, it is important to differentiate between the private value of plant genetic
resources (as the value of the opportunities foregone by the users: its private
opportunity cost) and the social opportunity cost (as the value of the opportunities
foregone by society as a whole) (von Braun and Virchow, 1997).
As described in general above, the values of natural assets are difficult to
estimate. This applies to PGRFA conservation in particular, because the
estimation of the non-use values is impractical and the use values are difficult to
capture. The intergenerational value of PGRFA and its relevant discount rates are
some of the main reasons for the difficulties in estimating the value of genetic
resources, besides the uncertainty of the future value of the resources (Pearce et
aI., 1991). Furthermore, the ecological threshold effects of diversity extinction
complicates the valuation (Perrings and Pearce, 1994). Therefore, only a short
overview of the valuation methods for PGRFA is given in this chapter.
The total economic value of PGRFA (TEV), specified as the overall value of
biodiversity, is divided into the direct use value (DUV), which is derived from the
use of PGRFA in production, consumption and utilization as well as into the non-