Contigent valuation of environmental assets: literature review - Economicus

by, Dr. Oltjana Zoto

Abstract

Background Decision-making with respect to the management of environmental ecosystem services is complex because involve multiple objectives. Better management of forestry sector in Albania will necessary involve the identification and reconciliation of the trade-offs between the negative externalities created by industry development and protection of recreational areas and biodiversity. In a situation where there are competing potential users of scarce resources the issue of optimal allocation arises. Where there is a competitive market functioning, the price mechanism will ensure an economically efficient allocation of resources. Where markets do not exist there is a failure of the market to value resources, for this reason there is a need to apply techniques that estimate a value for environmental resources. The objective of this paper is to estimate the value given to the environmental assets specifically to forestry ecosystem of Lura. Method Contingent valuation method (CVM) is proposed for the purpose of this study. CVM is used to estimate economic values for different kind of environmental assets. This method involves directly asking people in a survey, how much they would be willing to pay for specific environmental services. Expected results and practical implications: The results of this study will be used to identify the appropriate use of resources in the forestry sector, provide justification for public decision makers for management to protect forestry resources; to assess the worth of forestry assets and finally to stimulate awareness in Albanian stakeholders regarding environment.