Background Reading: Economic Valuation - UNIDO
Ecosystem services are crucial for the well-being of people, but their contribution to economic systems is difficult to quantify in monetary terms. Since some of them are not traded in commercial markets, they are often given too little or no weight in decision making. Thus, final decisions may favor outcomes which do have a commercial value, turning unsustainable use of ecosystems more profitable in a short term while having considerable economic long term costs.
Economic valuation is a tool for valuing ecosystems and their services in monetary terms. It quantifies the benefits provided by ecosystems and the impact of ecosystem changes on the wellbeing of people. Such economic evaluations are resource-intensive, and expert´s knowledge is generally needed to conduct an analysis "from scratch".
In cases where such knowledge and resources are not available, the benefit transfer method is often used to estimate economic values for ecosystem services, by transferring available information from detailed original studies already completed in another location and/or context.
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