Value and Natural Capital: Examining the Economist’s Perspective

This paper considers what economics brings to a conversation about environmental value, and what the limits of its contribution might be. Two parties with expertise in dissimilar fields might view the same problem or issue through differing conceptual lenses. A failure to make each party’s underlying assumptions and goals explicit may diminish the effectiveness of the communication between them.

With this in mind, this paper seeks to highlight and examine the assumptions and implicit goals that underpin the way in which economists think about value in general, and environmental value in particular. It also draws attention to the useful concepts – such as non-use value, opportunity cost, and the distinction between marginal and average valuations – that economics brings to a discussion of environmental value that other disciplines may overlook.

Pulling these assumptions and concepts to the foreground is a necessary precursor to understanding the ways in which approaches taken in other fields differ. It may help economists be clearer themselves about what they are assuming, and also improve the communication between economists and thinkers from disciplines such as law, philosophy, and the natural and social sciences.