Using ecosystem services to underpin cost–benefit analysis: Is it a way to protect finite soil resources?

Abstract

Urban encroachment onto versatile land is a global challenge, and as the pressure to develop this land mounts there are moves to assess the broader impacts of these decisions. One common decision support tool for policy decisions is cost–benefit analysis (CBA), and despite criticisms of the approach it enjoys widespread use. Using a case of urban development onto versatile rural land in New Zealand, two issues relating to the use of CBA are tackled – the monetisation of all values and what values to include – along with a discussion of irreversible decisions. To identify which costs and benefits to include in a CBA we provide a structured process using an ecosystem services framework early in a CBA to provide a comprehensive means to identify and justify the costs and benefits to include. Using members of the community to decide which ecosystem services are most important for a given context allows more robust deliberation of values and what to include in the CBA. To demonstrate the value of non-market values (e.g. regulatory services) we use soil characteristics. Our assessment demonstrates the challenges facing decision-makers and ongoing methodological shortfalls as CBA approaches are applied to non-substitutable resources and irreversible decisions.