Economic valuation of biodiversity: sense or nonsense?

This paper critically evaluates the notion and application of economic, mon etary valuation of biological diversity, or biodiversity. For this purpose four levels of diversity are considered: genes, species, ecosystems and fun ctions. Different perspectives on biodiversity value can be characterized t hrough a number of factors: instrumental vs. intrinsic values, local vs. gl obal diversity, life diversity vs. biological resources, etc. A classificat ion of biodiversity values is offered, based on a system of logical relatio nships among biodiversity, ecosystems, species and human welfare. Suggestio ns are made about which economic valuation methods can address which type o f biodiversity value. The resulting framework is the starting point for a s urvey and evaluation of empirical studies at each of the four levels of div ersity. The contingent valuation method is by far the most used method. An important reason is that the other valuation methods are unable to identify and measure passive or nonuse values of biodiversity. At first sight, the resulting monetary value estimates seem to give unequivocal support to the belief that biodiversity has a significant, positive social value. Neverthe less, most studies lack a uniform, clear perspective on biodiversity as a d istinct concept from biological resources. In fact, the empirical literatur e fails to apply economic valuation to the entire range of biodiversity ben efits. Therefore, available economic valuation estimates should generally b e regarded as providing a very incomplete perspective on, and at best lower bounds, to the unknown value of biodiversity changes. (C) 2001 Elsevier Sc ience B.V. All rights reserved.