Putting a price on nature

Water pollutionAugust 2010

A methodology for assessing the economic value of freshwater and marine environmental systems has led to a more cost-benefit based approach to implementation of the EU Water Framework Directive in the UK.

How much is a clean river worth? The idea of putting a price on nature is controversial, but economic arguments tend to carry more weight in policy-making decisions than the purely ethical and scientific arguments for conserving nature.

The monetary value of clean rivers has recently become particularly relevant for policymakers charged with implementing the European Union Water Framework Directive (WFD) which aims to improve the health of Europe's water environments.

Drawing on the combined expertise of natural and social scientists at the Centre for Social and Economic Research on the Global Environment (CSERGE), Professor Ian Bateman has developed an interdisciplinary tool for analysing the scientific and socioeconomic merits of various strategies to improve water quality. The researchers used these tools to assess the likely impact of a variety of WFD measures introduced by the UK Department for Environment, Food and Rural Affairs, both in terms of efficiency and cost to farmers.

One of the simplest approaches assesses how much people are willing to pay, in the form of higher annual water bills, for improvements in water quality. At the request of the EU, the researchers have now tested this approach in a number of other European countries, and it has been incorporated into EU guidelines.

Impact

  • Results from the research are now being applied by the Environment Agency to the marine environment and the management of catchments, as required by the EU Water Framework Directive.
  • CSERGE research has led to a more cost-benefit based approach to implementation of WFD in the UK, compared to most other EU countries.
  • CSERGE methodology for assessing people's willingness to pay for water improvements has been incorporated within EU guidelines for WFD implementation.

Further information