Ownership of environmental values and opportunity costs

Conservationists have recently used the concept of opportunity costs to cal culate potential costs of conserving key sites with high environmental valu es. However, the validity of this approach can be questioned. The author br iefly reviews property rights and decisionmaking on matters involving envir onmental values. Two examples are discussed: nature conservation, and the p lanting of genetically modified crops. The examples are considered in relat ion to existence values, citizens' preferences, problems associated with ag gregating social preferences, and the observation that there are costs asso ciated with exercising rights. The problems of the use of opportunity costs as a means of compensation for lost rights to environmental values are tho se of (1) who should determine the values; (2) whether payments should be m ade as compensation or as fines; and (3) who should receive the payments. T hese problems raise issues of equity, particularly as poor people often hav e claims to rights over areas with high environmental values. In conclusion , the roles of equity and sovereignty in the distribution of entitlements a re emphasised and the difficulty of taking a policy decision to use market mechanisms for conserving biodiversity is discussed.