Economics for the Environment Consultancy (EFTEC) services

Environmental and cultural resources contribute to human wellbeing and hence have economic value. Valuation methods entail collecting quantitative evidence in this regard which is essential for efficient decision-making, for example: Proving ‘value for money’ for environmental investments where the benefits are assumed to be intangible such as conservation of biodiversity or informal recreation – where valuation can show that these benefits are in fact tangible; Choosing amongst competing investments with different environmental impacts (for example, between conservation and development options); Prioritising amongst different environmental resources or challenges for environmental policy; Setting the correct level of tax on a pollutant; and Setting prices for environmental resources, such as water pricing or entry to a recreational site.

Understanding and measuring the economic value of ecosystem services is crucial to ensuring a healthy natural environment that continues to provide for the wellbeing of society overall and support a productive economy.

Policy and investment decisions are increasingly based on evidence that includes not only financial impacts but also economic values of social and environmental costs and benefits. We provide practical support to clients through the whole decision cycle including setting objectives, screening options, and identifying, quantifying and comparing the costs and benefits of action against a baseline of the current situation or business as usual.

‘Capturing’ the economic value means that economic values that we estimate are turned into actual money. This could be through policy instruments that make the polluters pay for the environmental damage they cause, such as full cost pricing, green taxes, tradeable permits and voluntary agreements. It could also be through the creation of new markets that capture the benefits (positive values) of the environment such as payments for ecosystem services, biodiversity offsets and habitat banking.