Economic Evaluation of Projects Module

Study Notes

Natural capital encompasses ecosystems and abiotic assets, generating benefits through ecosystem services like food provision and climate regulation.

The economic worth and role of natural capital, as well as the measurement of ecosystem services in economic terms, are crucial in decision-making processes.
Robert Costanza's work on quantifying the total value of ecosystem services and natural capital is highlighted.

The EU is committed to mapping and assessing the state of ecosystems and their services, aligning with biodiversity protection and knowledge improvement.

The concept of ecosystem services classification, as proposed by the Millennium Ecosystem Assessment, TEEB, SEEA, and CICES, provides frameworks for understanding the benefits derived from ecosystems.

The TEV framework outlines direct and indirect approaches for ecosystem services economic accounting.
Direct methods measure the value of ecosystem services through market prices or field surveys to identify willingness to pay.
Indirect methods assess non-use values through hypothetical market scenarios and contingent evaluation.

The document emphasizes the need to integrate the economic evaluation of natural capital and ecosystem services into decision-making processes, acknowledging their intrinsic value and contributions to the global economy.
The challenges in valuing nature and ecosystem services are underscored, highlighting the diverse approaches available for ecosystem services economic accounting.
A comprehensive understanding of the economic worth of natural capital and ecosystem services is crucial, aligning with efforts to protect biodiversity and enhance knowledge in this domain.

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