Assessing natural resource damages using environmental annuities

Abstract

Although research methods exist to place economic values on lost wetland service flows, in many circumtances the cost of conducting such research exceeds the expected value of damages. In some cases sufficient time may not be available to undertake primary research. In addition, the existing wetland valuation research base is often inadequate to support defensible benefits transfer. As an alternative to more traditional valuation techniques, we propose a simplified approach based on environmental annuities. The principal assumption behind this approach is that the public can be compensated for past losses in environmental services through the provision of additional services of the same type in the future. An application of this approach as the basis of a recent natural resource damage claim is described.