system good or service is a choice about how an issue is framed. If the good or service being valued is unique and not easily substitutable with other goods or services, then these two measures are likely to result in very different valuation estimates. In such cases, the committee cannot reasonably recommend that the analyst report both sets of estimates in a form of sensitivity analysis because this may effectively double the work. Rather, the analyst should document carefully the ultimate choice made and clearly state that the answer would probably have been higher or lower had the alternative measure been selected and used.

  • Because even small differences in a discount rate for a long-term environmental restoration project can result in order-of-magnitude differences in the present value of net benefits, in such cases the analyst should present figures on the sensitivity of the results to alternative choices for discount rates.

  • Ecosystem valuation studies should undergo external review by peers and stakeholders early in their development when there remains a legitimate opportunity for revision of the study’s key judgments.

  • Analysts should establish a range for the major sources of uncertainty in an ecosystem valuation study whenever possible.

  • Analysts will often have to make an assumption about the level of risk aversion that is appropriate for use in an ecosystem valuation study. In such cases, the best solution is to state clearly that the assumption about risk aversion will affect the outcome and to conduct sensitivity analyses to indicate how this assumption impacts the outcome of the study.

  • There is a need for further research about the relative importance of and estimating the magnitude of option values in ecosystem valuation.

  • Under conditions of uncertainty, irreversibility, and learning, there should be a clear preference for environmental policy measures that are flexible and minimize the commitment of fixed capital or that can be implemented on a small scale on a pilot or trial basis.

ECOSYSTEM VALUATION: SYNTHESIS AND FUTURE DIRECTIONS

The final chapter of this report seeks to synthesize the current knowledge regarding ecosystem valuation in a way that will be useful to resource managers and policymakers as they incorporate the value of ecosystem services into their decisions. A synthesis of the report’s general premises and major conclusions regarding ecosystem valuation suggests that a number of issues or factors enter into the appropriate design of a study of the value of aquatic ecosystem services. The context of the study and the way in which the resulting values will be used play a key role in determining the type of value estimate that is needed. In addition, the type of information that is required to answer the valuation question and the amount of information that is available about key economic and ecological relationships are important considerations. This strongly suggests that the valuation exercise will be very context specific and that a single, “one-size-fits-



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