Embedding Preference Uncertainty for Environmental Amenities in Climate Change Economic Assessments: A “Random” Step Forward

While there is a considerable debate regarding the choice of proper discount rates for assessing climate change projects and policies, only a tiny body of literature emphasizes “what to discount”. Usually, climate change economic assessments rely on tools and methods that employ strong simplifications, assuming, among others, given and fixed preferences about the values of man-made and environmental goods. Aiming to fill a gap in the literature, this paper leaves aside the issue of discounting and focuses on the nature and impact of preference uncertainty on the economic estimates of future climate change damages on ecosystem non-market goods and services. To this end, a general random walk-based stochastic model is proposed, combining a number of parameters, e.g., the growth of income, depletion of environmental assets, the elasticity of income and demand, and the change in preferences towards the environment. The illustrative application of the model shows that the value of environmental losses is significantly affected by the change in preferences. By doing so, the model allows the analyst to visualize future paths of preference evolutions and to bring future values of damaged environmental assets realistically to the fore. If these elements are neglected when estimating climate change-related future damages to environmental goods and services, the results may be too narrow from a policy perspective

Exploring the factors influencing energy efficiency in the Greek hotel sector

The current paper aims at enhancing the existing literature of studies discussing the parameters, which formulate the phenomenon of the energy efficiency gap in hotels. Specifically, the obtained outcomes, as resulted by the conduction of a stated preference survey are presented and discussed. The survey was carried out on a representative sample of hotels in Greece in the context of the “Consumer Energy Efficiency Decision making (CONSEED)” project. Emphasis was given on various issues related to the energy efficiency gap, such as the impact of EU labelling scheme, the linkage of the pro-environmental behaviour with the willingness to invest in more energy-efficient technologies and equipment, the lack of information about electricity prices and the imperfect understanding of energy operating costs. The findings of the survey can be used to explain the role of the behaviour in the decision-making procedures for the further promotion of energy efficiency. Theoretical models can be developed with the collected data to examine the energy efficiency gap phenomenon and to quantify the contribution of different factors to its formulation including the calculation of the implicit discount rate. Finally, the design of more effective policies can be supported with the findings of the paper maximizing the private and social benefits, which are associated with the purchase of energy-efficient technologies and equipment in the hotel sector

Valuing ecosystem services on the basis of service-providing units: A potential approach to address the 'endpoint problem' and improve stated preference methods

Standardized methods are required to measure ecosystem services in order to value them. In this paper, we argue that the service-providing unit (SPU) concept may help achieve this objective by promoting the systematic quantification of the key components of nature that provide services (e.g., population density of a key pollinator) and linking these with measurable outcomes for human well-being. We discuss and provide examples of the potential role of the SPU concept in improving economic valuation of ecosystem services. Further, we suggest the concept may contribute to addressing the endpoint problem, which can be defined simply as the inability of researchers to communicate the implications of environmental change in a way that is understood by a broad cross-section of society. The endpoint problem is of particular relevance to stated preference approaches, and we discuss the capacity of the SPU concept to refine these approaches. We argue that the concept enhances interdisciplinary collaboration, promoting more validated, well-informed valuation applications. It also has the potential to minimize 'warm glow effects' and put the notion of marginal changes in the provision of ecosystem services in a new light.Ecosystem services Ecosystem values Service-providing unit Endpoint problem Stated preferences

Public perception and valuation of UV health risks in low and high risk countries

This paper is concerned with valuing the health risks of sun exposure due to ultra violet (UV) radiation. The study's main objective is to assess the public perception and valuation of UV health risks in countries in which the scientifically established risk levels are significantly different. Using a multi-country survey, we investigate the relationships between risk awareness, perception, behaviour and willingness to pay for risk reductions. These risk reduction premia are evaluated both for a private good (a new sun protection product) and a public good (a global fund for reducing global emissions of stratospheric ozone-depleting substances). We find that public awareness of risks is highest in New Zealand. Interestingly, the health effects of sunbathing are perceived as more detrimental in South Europe (Portugal and Greece) than in North Europe (England and Scotland), even though the actual risks are higher in the latter. We furthermore find that a substantial market exists for higher protection sunscreens, as evidenced by willingness to pay in the private good case. These willingness to pay amounts can be fairly well explained using a model incorporating both exogenous risk factors and risk-reducing behaviour. In terms of the public good, the policy message, which emerges is that public willingness to contribute to the Multilateral Fund established under the Montreal Protocol is highly variable across the countries studied.</p

Improving value transfer through socio-economic adjustments in a multicountry choice experiment of water conservation alternatives

This study tests the transferability of the nonmarket values of water conservation for domestic and environmental purposes across three south European countries and Australia applying a common choice experiment design. Different approaches are followed to test the transferability of the estimated values, aiming to minimise transfer errors for use in policy analysis, comparing both single- and multicountry transfers, with and without socio-economic adjustments. Within Europe, significant differences are found between implicit prices for environmental water use, but not for domestic water use. In the Australian case study, alleviating restrictions on domestic water use has no significant value. Pooling the three European samples improves the transferability of the environmental flow values between Europe and Australia. Results show that a reduction in transfer error is achieved when controlling for unobserved and observed preference heterogeneity in the single- and multicountry transfers, providing additional support for the superiority of socio-economic adjustment procedures in value transfer

Research needs for incorporating the ecosystem service approach into EU biodiversity conservation policy

Using a range of different methods including extensive reviews, workshops and an electronic conference, 70 key research recommendations and 12 priority research needs to integrate the ecosystem services approach into biodiversity conservation policy and funding were identified by a cross-disciplinary group of over 100 scientists and 50 stakeholders, including research funders and policy-makers. These recommendations focus on the ecological underpinning of ecosystem services, drivers that affect ecosystems and their services, biological traits and ecosystem services, the valuation of ecosystem services, spatial and temporal scales in ecosystem service assessment, indicators of ecosystem services, and habitat management, conservation policy and ecosystem services. The recommendations in this paper help steer the research agenda on ecosystem services into policy-relevant areas, agreed upon by funders, researchers and policy-makers. This research agenda will only succeed with increased collaboration between researchers across disciplines, thereby providing a challenge to the research community and research funders to work in new, interdisciplinary ways