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Deliberating value: On the theory and practice of valuation of nature from neoclassical to ecological economics
KTH, School of Architecture and the Built Environment (ABE), Sustainable development, Environmental science and Engineering, Sustainability Assessment and Management.ORCID iD: 0000-0001-5139-0203
2021 (English)Doctoral thesis, comprehensive summary (Other academic)Alternative title
Deliberating value : On the theory and practice of valuation of nature from neoclassical to ecological economics (Swedish)
Abstract [en]

This thesis is about whether it is a good idea to place monetary value on nature, to remedy the fact that we treat it as having no particular value to us humans, although it clearly has. The thesis is based on five research papers that can be said to position themselves on opposite sides in the debate on monetisation of nature. The first two papers consider the basis of neoclassical environmental economics and apply the value theory and valuation methods from normative neoclassical welfare theory, on which monetisation of nature is based. The other three papers examine, with increasing degrees of criticism, this theory of value and especially its central assumption that value can be derived from people’s choices, or “revealed preferences”. 

The thesis itself is a “reflective story” about the journey I made as I learned to think about and understand neoclassical environmental economics in new ways. I reflect upon my work from a philosophy of science perspective, consider how for-granted-taken ideas from neoclassical economics affect environmental economic analysis and its conclusions, and examine the subject of value and valuation from what has become my new theoretical standpoint, ecological economics. It concerns meta-theoretical questions about ontology, that is, ideas in a research discipline about how things really are (what is), and epistemology, ideas about how researchers can provide relevant knowledge about reality. Such ideas are often taken for granted in neoclassical economic analysis and how they affect the analysis and its conclusions is not seldom unreflective. 

In the thesis, I move from explaining why neoclassical environmental economists advocate monetisation and pricing of nature as important solutions to environmental problems, to exemplifying how this turned out in research projects intended to serve as decision support in practice, and then to exploring and clarifying an alternative theory of value and valuation from ecological economics based on value pluralism and so-called deliberative valuation. In a concluding discussion, I point out that there are reasons to be sceptical about whether monetisation of nature is the right path to follow if we want to change our unsustainable relationship with nature and tackle the serious ecological crises we currently face. I show that monetisation of nature in practice requires a considerable amount of pragmatism, since the applied version of the theory deviates far from its idealised claims about the possibility to capture actual, total values. I also show that the descriptive (so-called positive) part of neoclassical theory and its normative part overlap in a way that makes it very difficult to speak of “objective” science in environmental economics. Instead, and despite strong recognition in the discipline that environmental problems are “market failures”, neoclassical theory has an ethical and ideological bias that favours individuals’ freedom of choice and market solutions, at the expense of collective decision-making and discussions about values that cannot be quantified. 

The important contribution of the thesis is that it clarifies the consequences of a central idea in the theory behind environmental economic analysis, namely the idea of values as commensurable, that is, measurable in one single unit. This idea links to the misleading conception of choices as “trade-offs”, where all choices are essentially viewed as the result of people’s constant exchange of costs and benefits within themselves in every choice they make, with the result that everything gets better (or at least not worse). Based on my research, I suggest that, in reality, people do not generally “make” trade-offs. If anything, people try to avoid them, especially when it comes to difficult choices, such as those concerning the true value of nature, because such choices involve moral conflicts between values that are incommensurable. As a basis for valuing transformational change, monetisation is therefore unsuitable, as it conceals rather than reveals the ethical dilemmas that are the very definition of sustainability problems and causes us to search for the efficient or so-called “optimal” solutions claimed possible in neoclassical theory and rhetoric, although such solutions do not exist. 

What we need instead is to represent public opinion in environmental decision-making in ways that do not conceal people’s actual moral considerations. Environmental valuation is political. It must be done together with others through reason-sensitive means, where people’s actual experiences of value conflicts – within us and between us – can be deliberated before making decisions. This makes decision-making more complex, but as an alternative to monetisation, this realism is not necessarily unrealistic. The fact that incommensurability is grounded in human experience means that the complexity of social and environmental decision-making has a real counterpart in conflicts within ourselves. One could see this as a potentiality, because we may have more confidence in people’s ability to recognise the relevance and necessity of less simplification and more complexity in decision-making. People need to “deliberate values” rather than “consuming” them and being expected to express all sorts of values through money. 

Abstract [sv]

Den här avhandlingen handlar om huruvida det är en bra idé att sätta pengavärden på naturen. Att värdera naturen i pengar, “monetarisera” den, föreslås av ekonomisk forskning för att förändra det faktum att vi behandlar den som om den inte har något särskilt stort värde för oss människor, trots att den uppenbarligen har det. Avhandlingen utgår ifrån fem forskningsartiklar som kan sägas positionera sig på motsatta sidor i debatten om monetarisering av naturen. De två första artiklarna är författade med utgångspunkt i neoklassisk miljöekonomi och tillämpar den värdeteori och värderingsmetodik från normativ neoklassisk välfärdsteori som monetarisering av naturen bygger på. De tre sista artiklarna granskar med en stigande grad av kritik just denna värdeteori och särskilt idén att värde kan härledas från människors val och beteende, så kallade ”avslöjade preferenser”, som är ett centralt antagande bakom teorin. 

Avhandlingens kappa är skriven som en “reflexiv berättelse” om den resa det inneburit att kritiskt tänka på och förstå neoklassisk miljöekonomi på nya sätt i takt med att jag, avhandlingens författare, lärt mig reflektera över mitt arbete som forskare ur ett vetenskapsfilosofiskt perspektiv och med perspektiv på ämnet värde och värdering från det som blivit min nya teoretiska hemvist, ekologisk ekonomi. Den behandlar meta-teoretiska frågor kring ontologi, alltså uppfattningar i en vetenskaplig disciplin om hur saker och ting egentligen ligger till (hur det är), och epistemologi, idéer om hur forskare kan leverera relevant kunskap om verkligheten. Liksom inom många andra ämnen är sådana idéer oftast förgivettagna inom neoklassisk ekonomisk analys och hur de påverkar analysen och dess slutsatser verkar inte sällan oreflekterat. 

Undersökningen går från att förklara varför den neoklassiska miljöekonomin förespråkar monetarisering och prissättning av naturen som en viktig lösning på miljöproblem, via exempel från de första artiklarna på hur detta faller ut i praktiken i forskningsprojekt som ska tjäna som stöd till politiska beslut, till att utforska och förtydliga ett alternativ, en värdeteori och värderingmetodik från ekologisk ekonomi som bygger på värdepluralism och så kallad deliberativ värdering. I en avslutande diskussion skriver jag att det finns anledning att vara skeptisk till att mätandet av naturens värde i pengar är rätt väg för att förändra vår ohållbara relation till naturen till något mer hållbart och för att, om möjligt, försöka avvärja de allvarliga ekologiska kriser vi står inför. Jag visar bland annat att monetarisering av naturen i praktiken kräver att man förhåller sig väldigt pragmatisk till teorin bakom den, eftersom tillämpningen ligger långt ifrån teorins idealiserade anspråk på att kunna fånga faktiska, hela värden. Jag visar också att teorins beskrivande (så kallade positiva) del och dess normativa del överlappar på ett sätt som gör det svårt att tala om en “objektiv” vetenskap inom miljöekonomin. Neoklassisk teori har istället en etisk och ideologisk snedvridning som gynnar individens valfrihet och marknadslösningar på bekostnad av kollektivt beslutsfattande och diskussioner om det som inte går att mäta – trots att det finns ett välkänt erkännande inom disciplinen av att miljöproblemen är “marknadsmisslyckanden”. 

Avhandlingens viktigaste bidrag är att den tydliggör en central idé i teorin bakom miljöekonomisk analys, och konsekvenserna av denna, nämligen idén om värden som kommensurabla, det vill säga mätbara i en och samma enhet. Denna idé hänger i sin tur ihop med den felaktiga idén om människors val som “trade-offs”, alltså att val är medvetna överväganden av värdet av de olika saker vi i varje stund står inför, och att val kan betraktas som ett konstant utbytande av värden med resultatet att saker och ting blir bättre (eller åtminstone inte sämre). Med utgångspunkt i avhandlingens femte och sista artikel föreslår jag att människor snarare undviker trade-offs, särskilt när det gäller svåra val som de kring naturens egentliga värde för oss. Detta beror på att svåra val innebär värdekonflikter som i praktiken inte kan ge oss de rationella, effektiva eller så kallade optimala lösningar som neoklassisk teori och retorik – och i synnerhet monetarisering – verkar utlova som möjliga. Miljövärdering är helt enkelt politisk och något som måste göras tillsammans med andra genom medvetna överväganden, i “deliberation”, där människors faktiska upplevelser av de etiska dilemman vi står inför får utrymme att diskuteras, och där konflikten mellan våra olika värderingar – inom oss och mellan oss – kan brytas mot varandra innan vi fattar ett beslut. Det gör beslutsfattande mer komplext, men som alternativ till monetarisering är denna realism inte nödvändigtvis orealistisk. Tvärtom skulle man kunna se det faktum att komplexiteten i socialt beslutsfattande har en reell motsvarighet i konflikterna inom oss själva som en potential. Människor behöver “deliberera värden” snarare än “konsumera” dem och förutsättas uttrycka alla sorters värden genom pengar. 

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2021. , p. 136
Series
TRITA-ABE-DLT ; 2130
Keywords [en]
ecological economics, neoclassical environmental economics, value, valuation, deliberative democracy, green GDP, alien invasive species, social cost of carbon, SCC, carbon values, stated preferences, trade-offs, Alan Holland, Dasgupta, ontology, epistemology, critical realism, autoethnograhpy, critical theory, reflexive methodology
Keywords [sv]
ekologisk ekonomi, neoklassisk miljöekonomi, värde, värdering, deliberativ demokrati, grön BNP, invasiva arter, skadekostnader, klimat, modeller, SP, preferenser, trade-offs, ontologi, epistemologi, kritisk realism, autoetnografi, kritisk teori, reflexiv metodologi
National Category
Economics
Research subject
Planning and Decision Analysis, Environmental Strategic Analysis
Identifiers
URN: urn:nbn:se:kth:diva-300759ISBN: 978-91-7873-949-3 (print)OAI: oai:DiVA.org:kth-300759DiVA, id: diva2:1590770
Public defence
2021-10-01, Videolänk https://kth-se.zoom.us/j/64139515979, Du som saknar dator /datorvana kontakta Cecilia Håkansson cecilia.hakansson@abe.kth.se / Use the e-mail address if you need technical assistance, Stockholm, 09:00 (English)
Opponent
Supervisors
Funder
Swedish Research Council Formas, 2014-01619Johan och Jakob Söderbergs stiftelseAvailable from: 2021-09-07 Created: 2021-09-03 Last updated: 2022-06-25Bibliographically approved
List of papers
1. Ecosystem services and regional development: An application to Sweden
Open this publication in new window or tab >>Ecosystem services and regional development: An application to Sweden
2009 (English)In: Ecological Economics, ISSN 0921-8009, E-ISSN 1873-6106, no 68, p. 2549-2559Article in journal (Refereed) Published
Abstract [en]

This study carries out interregional comparisons of development and sustainable use of natural capital with and without inclusion of non-marketed ecosystem services. A simple dynamic model of an open economy shows that appropriate adjustment of conventional income accounts includes flow and stock components, but excludes explicit entrance of pollution. Calculations are made for Swedish regions and for two types of ecosystem services - pollution sequestration and recreational services - provided by three types of ecosystems: forests, agricultural landscape and wetlands. When comparing the adjusted and non-adjusted regional income accounts it is shown that the two measurements generate significantly different pictures of regional income and growth; regions that are traditionally considered as relatively less growth promoting are shown to hold important sources of wealth from natural capital, while counties that are rich in conventional accounts fall behind when adjusting for values of changes in natural capital.

Place, publisher, year, edition, pages
Elsevier, 2009
Keywords
Environmental economics, Miljöekonomi
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:kth:diva-185188 (URN)10.1016/j.ecolecon.2009.03.023 (DOI)000268382400009 ()2-s2.0-67649085913 (Scopus ID)
Note

QC 20160421

Available from: 2016-04-12 Created: 2016-04-12 Last updated: 2022-06-23Bibliographically approved
2. Costs of alien invasive species in Sweden
Open this publication in new window or tab >>Costs of alien invasive species in Sweden
2009 (English)In: Ambio, ISSN 0044-7447, E-ISSN 1654-7209, Vol. 38, no 3Article in journal, Editorial material (Refereed) Published
Abstract [en]

The purpose of this paper is to present calculations of total costs of 13 alien invasive species (AIS) in Sweden. All species are subject to control by Swedish public authorities, and estimates for most AIS include either damage cost or actual control cost. The results indicate a total annual cost between approximately 1620 and 5080 million SEK, which correspond to SEK 175 and SEK 565 per capita in Sweden. The estimates are well within the range of similar calculations for other countries, but differ with respect to the composition of costs of different AIS. Whereas costs for the agricultural and forestry sectors dominate in most other studies, the costs of AIS in Sweden are more equally divided among different categories. The results also indicate that the highest costs are attributable to unintentionally introduced AIS and that the most reliable cost estimates are related to human and animal health.

Place, publisher, year, edition, pages
Springer Netherlands, 2009
Keywords
miljöekonomi, främmande arter, kostnad
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:kth:diva-178165 (URN)10.1579/0044-7447-38.3.135 (DOI)000266276300003 ()19580030 (PubMedID)2-s2.0-67649662058 (Scopus ID)
Note

QC 20151214

Available from: 2015-12-07 Created: 2015-12-07 Last updated: 2022-06-23Bibliographically approved
3. Choosing a monetary value of greenhouse gases in assessment tools
Open this publication in new window or tab >>Choosing a monetary value of greenhouse gases in assessment tools
Show others...
2016 (English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786Article in journal (Refereed) Published
Abstract [en]

There is a societal need for using monetary estimates of social impacts of CO2 and other greenhouse gases in different assessment tools, such as cost-benefit analysis and life-cycle assessment. A number of estimates are available in the literature. Since these differ by several orders of magnitude, there is ambiguity and confusion about which to use. This review aims to give some guidance on this issue. The variation in carbon value estimates depends on several uncertain aspects – which will remain uncertain – including climate sensitivity, assumptions about future emissions, and decision makers' ethical standpoints. Hence, there is no single correct monetary value for CO2: it will depend on the ethical standpoint of the user. Due to this, estimates of social costs of CO2 emissions cannot be used for calculating an optimal emission level, although they can inform such assessments. It is suggested that marginal abatement cost values are used for emissions capped by binding targets in short-term assessments, and that social cost of carbon values should be used for all other emissions. Benchmark principles for choosing a monetary carbon value are suggested along with associated estimates. Depending on the choices made with regard to ethical standpoints and assumptions about future emissions and climate sensitivity, estimates can be significantly higher than the ones typically used in assessment tools today. The estimates need continuous updating, and there is need for better understanding and communication around the limitations and uncertainties involved.

Place, publisher, year, edition, pages
Elsevier, 2016
Keywords
climate change, impact assessment, social cost of carbon, abatement costs, life cycle assessment, economics
National Category
Social Sciences Interdisciplinary
Research subject
Economics
Identifiers
urn:nbn:se:kth:diva-185190 (URN)10.1016/j.jclepro.2016.03.163 (DOI)000377311200003 ()2-s2.0-84981763400 (Scopus ID)
Funder
Swedish Energy Agency
Note

QC 20160422

Available from: 2016-04-12 Created: 2016-04-12 Last updated: 2024-03-15Bibliographically approved
4. "I didn’t count WTP as part of the value": Respondents’ perspective on willingness to pay – an inductive approach
Open this publication in new window or tab >>"I didn’t count WTP as part of the value": Respondents’ perspective on willingness to pay – an inductive approach
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper sheds new light on the willingness to pay-concept (WTP) by taking the perspective of respondents as the departure point and exploring WTP’s accuracy with respect to the framework of “the total economic value” (TEV), upon which much of stated preference studies’ (SP) unique role in welfare analysis depends. Based on follow-up interviews with respondents to an SP survey, we use an inductive, interpretive approach and empirically show that WTP is not a suitable measure of the total value of an environmental change to society. Two findings support this claim. Firstly, to the interviewees it seemed hard to even imagine that we would equate the value of the environmental improvement with their WTP. Secondly, once they understood how their WTP could come to be used in cost-benefit analysis, they did not accept it. Our results suggest that it is more credible to refer to WTP as a measure of a subset of the value of an environmental change, rather than a “total” value. If it is used, we advocate that it is complemented with other value indicators, and that the typical reference to aggregate WTP as a measure of social welfare is avoided.

Keywords
CBA, non-use values, contingent valuation, stated preference, total economic value, TEV, willingness to pay, WTP, inductive research, interviews, CBA, icke-användarvärden, värderingsstudier, preferenser, betalningsviljestudier, betalningsviljan, induktiv forksning, intervjuer
National Category
Economics
Research subject
Economics; Planning and Decision Analysis, Environmental Strategic Analysis; Planning and Decision Analysis, Strategies for sustainable development
Identifiers
urn:nbn:se:kth:diva-300757 (URN)
Funder
Swedish Research Council Formas
Note

QC 20210929

Available from: 2021-09-02 Created: 2021-09-02 Last updated: 2022-06-25Bibliographically approved
5. What does value pluralism mean in practice? An empirical demonstration from a deliberative valuation
Open this publication in new window or tab >>What does value pluralism mean in practice? An empirical demonstration from a deliberative valuation
(English)Manuscript (preprint) (Other academic)
Abstract [en]

The increasing calls for value pluralism within research on valuation in environmental decision-making responds to an increasing recognition that conventional approaches to environmental valuation based in neoclassical economics do not account for important aspects of human-nature relations. Few studies have however explored how value plurality actually plays out in practice. In this paper, we draw on Alan Holland’s (2002) essay “Are choices trade-offs?”, which goes to the heart of issues behind valuation and illuminates differences in conceptions of value and rationality between neoclassical and ecological economists. In a quasi-experimental study on values related to marine management in a coastal community in Sweden with local citizens and politicians, we empirically investigate how participants in a deliberative valuation handle different values in their reasoning and choicemaking. The results demonstrate the relevance of value pluralism for policy by showing the prevalence of preference uncertainty, value incommensurability and both inter- and intrapersonal value conflicts. Value conflicts played out as the inability to achieve multiple transcendental values that were aspired to, including conflicts between social and environmental goals. Rather than attempting to commensurate, participants sought to avoid moral conflicts, and showed emotional anguish where these conflicts came to the fore. This evidence thus suggests that choices are not, fundamentally, trade-offs. Incommensurability appeared as felt experience and deliberate positions rather than expressions of irrationality. Legitimately resolving value conflicts thus demands reason-sensitive means for deciding upon which sacrifices are made and for how to represent public opinion in environmental decision-making in a way that reveals the actual moral considerations of people.

Keywords
Value pluralism, value plurality, deliberative valuation, deliberative democracy, trade-offs, incommensurability, value conflicts, ecological economics, neoclassical environmental economics, abductive interpretive research, Värdepluralism, värdepluralitet, deliberativ värdering, deliberativ demokrati, trade-offs, inkommensurabilitet, värdekonflikter, ekologisk ekonomi, neoklassisk ekonomi, miljöekonomi, abduktion
National Category
Economics
Research subject
Planning and Decision Analysis, Environmental Strategic Analysis; Planning and Decision Analysis, Strategies for sustainable development; Architecture, Critical Studies; Philosophy
Identifiers
urn:nbn:se:kth:diva-300758 (URN)
Funder
Swedish Research Council FormasJohan och Jakob Söderbergs stiftelse
Note

This paper is submitted to People and Nature and in review. QC 20210929

Available from: 2021-09-02 Created: 2021-09-02 Last updated: 2022-06-25Bibliographically approved

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