Environmental value transfer: state of the art and future prospects

The main objectives of the paper are to (1) give an overview of the state of the art of environmental value transfer, (2) discuss its prospects and potential role in CBA as a decision-support tool, and (3) provide further guidelines for proper use and application. Environmental value or benefit transfer is a technique in which the results of studies on monetary environmental valuation are applied to new policy contexts. The technique is controversial, not least because of academic and political reservations over the usefulness and technical feasibility of economic valuation tools to demonstrate the importance of environmental values in project or programme appraisals. Testing of environmental value transfer so far has been unable to validate the practice. Taking into account the conditions set out in the literature for valid and reliable value transfer, most transfers appear to result in substantial transfer errors. This paper discusses why and addresses the question of which factors may have been overlooked. It is argued that the problem is much more fundamental than previously acknowledged. Strict guidelines in terms of quantitative adjustment mechanisms to valid value transfer are meaningless if the more fundamental issue of differences in the very nature of the values elicited is not addressed at the same time. (C) 2000 Elsevier Science B.V. All rights reserved.