The Economics of Ecosystems and Biodiversity (TEEB) framework provides a comprehensive approach to assess the economic value of ecosystems and biodiversity. Here are some methods commonly used within the TEEB framework to conduct total economic valuation:

  1. Market-Based Valuation (MBV): This method involves determining the value of ecosystem goods and services by analyzing market prices of similar products or services. For example, estimating the economic value of timber production or agricultural crops.
  2. Cost-Based Valuation (CBV): This approach calculates the costs that would be incurred if ecosystem services were lost or replaced by human-made alternatives. It involves assessing the expenses associated with maintaining or restoring ecosystems, such as wastewater treatment costs or erosion control measures.
  3. Replacement Cost Method (RCM): This method estimates the economic value of an ecosystem by calculating the cost of replacing its services with human-made alternatives. For instance, determining the cost of constructing and maintaining a water treatment plant if the natural water purification services of a wetland were lost.
  4. Contingent Valuation Method (CVM): This technique involves surveying individuals and asking them about their willingness to pay (WTP) for a particular ecosystem service or their willingness to accept (WTA) compensation to forgo the use of that service. It helps assess the non-market values of ecosystems, such as recreational benefits or existence values.
  5. Travel Cost Method (TCM): This method estimates the economic value of recreational ecosystems by analyzing travel expenses incurred by individuals to access and enjoy them. It involves examining factors like transportation costs, time spent, and the number of visits made to a particular site.
  6. Hedonic Pricing Method (HPM): This approach analyzes the economic value of specific environmental attributes by studying the effect of those attributes on the prices of related goods or properties. For example, assessing the impact of proximity to green spaces on the value of residential properties.
  7. Production Function Method (PFM): This method measures the contribution of ecosystem services to economic production and productivity. It involves analyzing how changes in ecosystem services, such as pollination or nutrient cycling, affect agricultural or industrial output.
  8. Benefit Transfer Method (BTM): This technique utilizes existing studies or data from similar contexts to estimate the economic value of ecosystem services in a new setting. It involves adapting and applying values from previous studies to the specific context of interest.

These methods can be combined and adapted depending on the specific objectives of the assessment and the available data. It’s important to note that economic valuation is just one aspect of understanding the total economic value of ecosystems and biodiversity, and it should be complemented with other approaches, such as ecological and social assessments, for a more comprehensive understanding.

By: Nazrul Efendy Bin Noordin