Evironmental Economics

Environmental economics provides a systematic approach to measuring the environmental impacts of policies and projects. Environmental impacts are often difficult to quantify using traditional economic approaches because environmental goods and services are not traded in the market place and therefore do not have market prices. However, a range of techniques is available to allocate values to environmental goods, including ‘hedonic pricing, contingent valuation and the travel-cost method. Because applying these techniques takes time and can be costly, benefits transfer can be used to apply values developed in one area to other, similar, areas. Technical and time constraints, together with complex scenarios (involving a number of objectives and/or affected stakeholders) can also mean that only a qualitative assessment of an environmental impact can be made, using methodologies such as multi-criteria analysis (MCA). An analysis using environmental economics incorporates the full breadth of issues associated with decision-making, not simply those that can be quantified in monetary terms.

RPA has carried out a range of environmental economics projects for clients using various quantitative and qualitative techniques. Examples of projects include:

• Assessing the Benefits of Pesticide Regulation: A review of the literature on valuation of benefits from pesticide regulation and assessment of the environmental, human health and economic benefits from regulation for a series of case studies.