Environmental valuation in European Union policy-making

Abstract

This paper offers a critical review of natural resource valuation and points out the role of economic valuation in EU policy-making. First of all, we specify the meaning of the economic value of environmental amenities, illustrate the most reliable and often used economic valuation techniques, and their major weaknesses. We then point out the normative significance of environmental valuation in the evolution of the EU environmental consciousness, and distinguish between its different applications. According to this framework, we critically review the studies carried out in the last few years (1998-2001) by the European Commission DG Environment, which are both methodological and application-oriented. Furthermore, we carry out a restricted survey on research in Europe. Our analysis makes clear that the diffusion of environmental valuation in Europe is unsatisfactory and that decision- makers distrust is still strong.environmental valuation, cost-benefit analysis, environmental policy