Environmental Valuation and Natural Resource Pricing: Tools for Policy and Planning

Abstract

Environmental valuation represents a critical component of modern environmental policy and natural resource management, providing quantitative frameworks for assessing the economic value of environmental goods and services that are typically not traded in markets. This paper examines the theoretical foundations, methodological approaches, and practical applications of environmental valuation techniques in policy and planning contexts. Through a comprehensive review of valuation methods including revealed preference, stated preference, and benefit transfer approaches, this study analyzes how environmental valuation can inform decision-making processes and improve resource allocation efficiency. The analysis reveals that while environmental valuation faces significant methodological challenges and limitations, it provides essential tools for incorporating environmental considerations into economic analysis and policy development. Evidence from applications across water resources, air quality, biodiversity conservation, and climate change demonstrates both the potential and constraints of valuation approaches. The paper concludes that effective use of environmental valuation in policy requires understanding methodological limitations, ensuring stakeholder participation, and integrating valuation results with other decision-making criteria. Recommendations include developing standardized valuation protocols, building institutional capacity, and enhancing the integration of environmental values into national accounting systems.