POLLINATORS POLLINATION AND FOOD PRODUCTION

THE ASSESSMENT REPORT ON POLLINATORS, POLLINATION AND FOOD PRODUCTION
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4. ECONOMIC VALUATION OF POLLINATOR GAINS
AND LOSSES
1.1.2 Values, costs and prices
Advantages and limitations of bringing the diversity of
preferences into a single-dimension analysis. Economic
valuations typically measure values in monetary figures.
However, this is often criticized as being too simplistic
as it brings the diversity of wants and needs into a onedimension
indicator. When related to nature, these wants
and needs are difficult to substantiate and do not really help
decision makers to understand the actual functioning of
human societies in their relation to ecosystems as, because
of methodological limitations, economic valuations alone
cannot fully capture the richness and diversity of relations
between societies and nature. This is a particular issue
when the results are poorly reported and do not allow
to fully capture or express the variability and diversity of
values among individuals. However, the purpose of the
valuation is to enlighten decision-makers on the utility/
scarcity issues resulting from the choices they can make.
Expressing benefits and costs in a way common to standard
economic activity allows, aside of other measures, for more
informed decision-making than would otherwise be possible.
Expressing the intensity of the tensions on ecosystem
services with a monetary indicator allows comparing them
with the prices that can be observed on the markets.
Prices, costs and values: how do they differ?
Economists use three complementary but distinct concepts
to express the impacts of economic activity in monetary
units: prices, costs and values. Prices are the amounts
that buyers must pay to sellers when there is a market
i.e., the mechanism by which buyers and sellers interact
FIGURE 4.2
A simple scheme of the consumers’ surplus.
Price
to determine the price and quantity of a good or service.
When the market is competitive, prices may vary in order to
balance supply and demand. Costs express what agents
must give up to get (or produce) the items they want, i.e.,
the efforts they would bear in terms of monetary cost,
but also of time, inconvenience or income foregone (often
referred to as opportunity costs). The use of ecosystem
services could lead to a situation with no cost if there are no
private cost (the cost incurred by the suppliers or the price
paid by the consumers if any), or negative “externalities”
(see Section 1.1.3.). Values reflect the interest of agents
for goods and services, knowing that their preferences
for these objects are influenced by both their needs and
culture, and the information they have. Although they are
often used interchangeably with values, the benefits are,
in reality, the positive impacts produced by pollinators and
pollination services. Economic valuation of pollination and
other ecosystem services aspires to quantify the welfare
gains from benefits 1 .
Marginal values. Economic value is often derived from the
maximum amount a consumer is willing to pay for a good
or service in a market economy. For goods and services
for which there is no market, these welfare values must be
estimated by appropriate methods (see Section 2). The
values useful to inform public policy choices are the values
of goods and services units gained or lost resulting from
the different choice options. These are what economists
call marginal values. In the context of ecosystem services,
1. In the “cascade model” of the CICES (Haines-Young and Potschin,
2010), benefits are defined as the share actually used of the entire
ecosystem services potential.
Supply
Consumers’ surplus
P 2
Consumers’ surplus loss
P 1
Demand
curve
Q 2
Q 1
Quantity