We develop integrated valuation approaches that link environmental impact (natural capital and ecosystem services change) with social wellbeing. By applying economic valuation techniques to uncover the costs and benefits originated by natural capital and ecosystem services change (marketed and non-marketed), we are able to better inform decision-making and to provide strategic advisory on governance and policy instruments options that would increase taxpayers value for money and social welfare.
- Appraisal of projects, policies or investments that impact on environment
- Environmental Accounting
- Policy instruments design
The case for governmental or public intervention in natural capital management usually comes into place because many ecosystem services do exhibit public goods characteristics, often provided in the form of externalities. Under these circumstances market prices fail as coordinating mechanisms and governments have to intervene in order to overcome under provision of demanded public goods.
Different solutions to solve the generated market failure (internalizing) can be designed including government intervention, typical through direct regulation (command and control policies - e.g., zoning land use or imposing emissions standards or legal limits) and market based instruments (e.g., taxes, subsidies, payments). Regardless of government intervention typologies, by acting as social planner’s governments are interested in the overall value to society of the decisions they take and, hence, should act within consistent policy frameworks that ensure natural capital maintenance and the desirable amount of ecosystem services featuring public goods characteristics.
In the view of a policy cycle (see below), integration of natural capital should be not only at the core of the decision-making but driving policy objectives, agenda setting and shaping policy outcomes. Without knowing and accounting for the value of non-marketed ecosystem services, decision-making is hampered and undesirable policy outcomes can arise and be costly to society.