The Valuation of Environmental Assets

Chapter 6 examines the value of environmental assets, which lies in the discounted stream of services they offer. Their conservation depends on the expected rate of change in their value, if conserved, relative to the rate of return on alternative assets. This chapter considers how the portfolio of environmental assets—natural capital—has been valued at the national scale. The two main approaches adopted are the United Nations’ System of Environmental-Economic Accounts (SEEA), and the World Bank’s (Inclusive) Wealth Accounts. The authors consider both approaches, and what they mean for the sustainability and the efficiency of natural resource use. Particular attention is paid to the residual left over after taking account of all marketed inputs in production: total factor productivity.