results of both approaches and explain how and why they differ. However, the reality is that this may greatly increase the complexity of the ecosystem valuation study. If time and resources allow only one approach, then it is reasonable to expect a clear explanation of how the choice was made and some discussion of alternatives.
The unavoidable need to make professional judgments in ecosystem valuation activities through choices of framing and methods suggests that there is a strong case for peer review to provide input on these methodological issues before study design is complete and relatively unchangeable. Although most significant ecosystem valuation studies will be reviewed by external reviewers on completion and/or publication, the committee believes that external review by peers and stakeholders could also be particularly valuable at a much earlier stage, when key judgments for the study have tentatively been chosen but there remains a legitimate opportunity for revision. Outside review at these earlier stages can make the difference between a valuation study that is widely accepted and one that is regarded as controversial or misleading (NRC, 1996).
The following sections discuss the major sources of uncertainty in the economic valuation of aquatic ecosystem services and how policymakers and analysts should respond.
Levels of Uncertainty: Risk and Ambiguity
The almost inevitable uncertainty facing analysts involved in ecosystem valuation can be more or less severe depending on the availability of good probabilistic information. A favorable case would be one in which, although there is uncertainty about the magnitudes of various parameters, the analyst nevertheless has good probabilistic information. That is, there is a distribution of possible magnitudes—with means, standard deviations, and other aspects of the distributions available—and these distributions are based on statistical data that are sufficiently extensive to allow some confidence in their predictions. An illustration of such a case is provided by insurance companies, which typically have many years of actuarial data on the death rates of people with different characteristics and thus can calculate the expected number of deaths in a population with some confidence.
An alternative and common scenario in ecosystem valuation is one in which there is really no good probabilistic information about the likely magnitudes of