Environmental value transfer: state of the art and future prospects

The main objectives of the paper are to (1) give an overview of the state o f the art of environmental value transfer, (2) discuss its prospects and po tential role in CBA as a decision-support tool, and (3) provide further gui delines for proper use and application. Environmental value or benefit tran sfer is a technique in which the results of studies on monetary environment al valuation are applied to new policy contexts. The technique is controver sial, not least because of academic and political reservations over the use fulness and technical feasibility of economic valuation tools to demonstrat e the importance of environmental values in project or programme appraisals . Testing of environmental value transfer so far has been unable to validat e the practice. Taking into account the conditions set out in the literatur e for valid and reliable value transfer, most transfers appear to result in substantial transfer errors. This paper discusses why and addresses the qu estion of which factors may have been overlooked. It is argued that the pro blem is much more fundamental than previously acknowledged. Strict guidelin es in terms of quantitative adjustment mechanisms to valid value transfer a re meaningless if the more fundamental issue of differences in the very nat ure of the values elicited is not addressed at the same time. (C) 2000 Else vier Science B.V. All rights reserved.