Cost-benefit analysis is widely acknowledged to be an appropriate tool for providing advice to policy makers on the optimal use and management of natural resources. However, a great deal of research has indicated that the assumptions made in cost-benefit analysis concerning the natural environment diverge from real world observations. In this paper I discuss these observed divergences. To do so, I introduce the concept of Natura economica. Natura economica is the environment as it is understood in economic analysis in general, (...) and cost-benefit analysis in particular, namely as a bundle of commodities with potential market value. I argue that if this understanding of nature and its value is very different from what is generally observed, it reduces the value of the resulting policy recommendations. I then suggest four questions that policy makers should ask when they evaluate their choice of appraisal methods. If the answer is 'yes' to all of them, then cost-benefit analysis can provide valid information. However, if the answer to any of these questions is 'no', other methods, such as multicriteria analysis and participatory processes, should be considered in order to arrive at better-founded policy recommendations. (shrink)

Cost-benefit analysis is widely acknowledged to be an appropriate tool for providing advice to policy makers on the optimal use and management of natural resources. However, a great deal of research has indicated that the assumptions made in cost-benefit analysis concerning the natural environment diverge from real world observations. In this paper I discuss these observed divergences. To do so, I introduce the concept of Natura economica. Natura economica is the environment as it is understood in economic analysis in general, (...) and cost-benefit analysis in particular, namely as a bundle of commodities with potential market value. I argue that if this understanding of nature and its value is very different from what is generally observed, it reduces the value of the resulting policy recommendations. I then suggest four questions that policy makers should ask when they evaluate their choice of appraisal methods. If the answer is 'yes' to all of them, then cost-benefit analysis can provide valid information. However, if the answer to any of these questions is 'no', other methods, such as multicriteria analysis and participatory processes, should be considered in order to arrive at better-founded policy recommendations. (shrink)

This paper reports a Contingent Valuation application to estimate the non-market costs and benefits of hydro scheme developments in an Icelandic wilderness area. A deliberative group -based approach, called Market Stall, is compared to a control group consisting of conventional in-person interviews, in order to investigate flaws of Contingent Valuation, such as poor validity and protest responses. Perceived property rights suggested the use of willingness-to-accept in compensation for wilderness loss and willingness-to-pay for hydro scheme benefits. The study is novel as (...) it applies participant behaviour observation to gain insights into the shortcomings of conventional data collection modes. Main drawbacks with in-person interviews were found to be low motivation, standardised information and time pressure which hindered individuals from carefully considering their preferences. Market Stall performed better in the study: welfare estimates were more easily explained by socio-economic variables, the non-response rate was lower, and respondents were more engaged. Our research findings also suggest that participant behaviour can be used to supplement conventional validity tests. (shrink)

This paper tries to characterize the factors determining human relations with its environment and to identify the drives of those behavioral patterns and “praxis”. One scrutinizes the physiological and psychological factors that influence those drives, and tries to determine ways of overriding instinctive drives in favor of rational, sustainable ones. It focuses its attention on the way the different ecosystemic, economic and socio-cultural systems work, and pin-points the critical issues in view of the development of sustainable behavioral patterns. Also the (...) values that must build the new behavioral paradigm, as well as the ways to ensure the evolutionary quantum-leap necessary to ensure this sustainable condition, and the fulfilment, at every level, the different needs of humans and human societies, are analyzed. In conclusion, it stresses the fact that any reliable and long lasting change towards a sustainable behavior must start at the individual and the close social groups levels, and of the development of new factors of self-fulfillment and gratification, able to support and foster that change. The proposed epistemological approach is particularly innovative, precisely because of this emphasis on the individual drives and the way they determine the global patterns of environmental use, as well as the way they can evolve into a more rational character. In short, the paper focuses itself in the way man can evolve from its natural animal instincts and drives toward more rational ones, humanizing its behavior and turning, therefore, into an able actor of the process of sustainability building. (shrink)