Ebook Environmental Policy Analysis: A Guide to Non‑Market Valuation

Environmental Policy Analysis: A Guide to Non‑Market Valuation Productivity Commission Staff Working Paper January 2014 Rick Baker Brad Ruting The views expressed in this paper are those of the staff involved and do not necessarily reflect the views of the Productivity Commission.  Commonwealth of Australia 2014 ISBN 978-1-74037-468-2 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, the work may be reproduced in whole or in part for study or training purposes, subject to the inclusion of an acknowledgment of the source. Reproduction for commercial use or sale requires prior written permission from the Productivity Commission. Requests and inquiries concerning reproduction and rights should be addressed to Media and Publications (see below). This publication is available from the Productivity Commission website at www.pc.gov.au. If you require part or all of this publication in a different format, please contact Media and Publications. Publications Inquiries: Media and Publications Productivity Commission Locked Bag 2 Collins Street East Melbourne VIC 8003 Tel: (03) 9653 2244 Fax: (03) 9653 2303 Email: maps@pc.gov.au General Inquiries: Tel: (03) 9653 2100 or (02) 6240 3200 An appropriate citation for this paper is: Baker, R. and Ruting, B. 2014, Environmental Policy Analysis: A Guide to Non-Market Valuation, Productivity Commission Staff Working Paper, Canberra. JEL codes: D61, H41, Q26, Q51, Q58. The Productivity Commission The Productivity Commission is the Australian Government’s independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of Australians. Its role, expressed most simply, is to help governments make better policies, in the long term interest of the Australian community. The Commission’s independence is underpinned by an Act of Parliament. Its processes and outputs are open to public scrutiny and are driven by concern for the wellbeing of the community as a whole. Further information on the Productivity Commission can be obtained from the Commission’s website (www.pc.gov.au) or by contacting Media and Publications on (03) 9653 2244 or email: maps@pc.gov.au Contents Acknowledgments v Key points 2 Overview 3 1 Introduction 11 1.1 Understanding environmental values 11 1.2 Why do non-market values matter for policy? 15 1.3 About this paper 21 2 When can non-market valuation provide good estimates? 23 2.1 Methods for valuing non-market outcomes 24 2.2 Can estimates be valid and reliable? 30 2.3 What makes a good study? 44 3 Use in environmental policy analysis 53 3.1 Comparison with alternatives 54 3.2 Non-market valuation: when and how? 65 3.3 Building confidence in non-market valuation 70 A Workshop participants 77 B Australian studies 79 B.1 River red gum forests 79 B.2 The Murray–Darling Basin 84 B.3 Television and computer recycling 89 B.4 Bulli Seam coal mining 93 B.5 Underground power supply 99 C Validity and reliability of stated preference methods 105 C.1 Criterion validity 105 C.2 Convergent validity 109 C.3 Construct validity 113 CONTENTS iii C.4 Reliability 124 C.5 Benefit transfer 124 References 129 iv CONTENTS Acknowledgments The idea for this paper was initially suggested to the Productivity Commission by David Pearce (Centre for International Economics) and Jeff Bennett (ANU). A workshop attended by non-market value practitioners, economists with an interest in environmental policy and policymakers was held in the early stages of the project (participants are listed in appendix A). The authors would like to thank those who participated for their insightful and helpful contributions. We would also like to thank the following people for their help and advice on the drafting of this paper: Drew Collins (BDA Group), Jeff Bennett, Richard Carson (University of California San Diego and University of Technology Sydney), Jenny Gordon, Ana Markulev, Paul Loke, Anthea Long, Rosalyn Bell, Lisa Gropp, Larry Cook, Noel Gaston and Alan Johnston. The views in this paper remain those of the authors and do not necessarily reflect the views of the Productivity Commission or of the external organisations and people who provided assistance. ACKNOWLEDGMENTS v ... - tailieumienphi.vn