Valuation of natural resources: efficiency and equity

Abstract

Adequate pricing of environmental goods is essential for the sustainable management of natural resources. It is not easy, however, to place a value on natural resources, because the excludability problem makes it difficult to protect natural resources from unpaid use and to exercise property rights over them. This article discusses the achievements and limitations of current natural-resource policies from the perspectives of efficiency and equity. It argues that a trust fund operating via market-based transactions is a promising approach to help to achieve simultaneously the goals of efficiency, sustainability, and poverty reduction, provided that property rights to the environmental resources are distributed fairly within current generations, as well as between present and future generations.

Keywords:

• Environment
• Methods
• Rights

Additional information

Notes on contributors

Michiel Keyzer

Michiel Keyzer is the director of the Centre for World Food Studies of the Vrije Universiteit (SOW-VU; Dutch acronym) and professor in mathematical economics at the Faculty of Economics and Business Administration of the Vrije Universiteit, Amsterdam. He was awarded the Prize of the Dutch Society for Sciences in the area of economics in 1985. He has published extensively in major economics journals and also a handbook published by MIT Press. Professor Keyzer is member of several national and international advisory boards. [email protected]

Ben Sonneveld

Ben Sonneveld is senior researcher at the SOW-VU. After completing his studies at the Agricultural University in Wageningen, he worked for the International Institute for Land Reclamation and Improvement and the FAO. In 1992 he joined SOW-VU and was involved in several country projects. His PhD, completed in 2002, received the AIID/World Bank Thesis Award. Sonneveld has published articles in leading land-and-water journals on topics such as water-erosion modelling, land evaluation, and land degradation. [email protected]

Wim van Veen

Wim van Veen is an economist and senior researcher at SOW-VU. He has extensive experience in country projects for national planning (such as Bangladesh, Indonesia, and Nigeria). Recently, he co-ordinated most of the database construction and social-accounting work in the Chinagro Project, a joint effort of SOW-VU and other international and Chinese research institutes to study the development of China's food and feed availability, farm incomes, and land-use patterns in the next three decades. His current research concerns the design and solution of inter-temporal general equilibrium models under uncertainty. [email protected]