The Economic Valuation of Urban Ecosystem Services

Abstract

The economic valuation of ecosystem services in cities often relies on the concept of willingness to pay. Such reliance invariably leads to the adoption of methods that have several inherent limitations. The object of this paper is to present both a conceptual and methodological framework within which valuation could proceed. The conceptual premise rests on the principle that several ecosystem services cannot be compromised if the urban economy is to be sustainable. Hence methodologically, the valuation of such services could be approached by recourse to the opportunity cost concept, namely the levels of income that need to be sacrificed in order to retain the sustainability of the urban economy. In the long-run the enhanced productivity and sustainability of the urban systems would offset the short-run losses which are incorrectly magnified.