Contingency Valuation

This week's assignment posed the following two questions:

Describe 2-3 environmental problems that you think might be conductive to using contingency valuation. Briefly describe why CV would be appropriate in this case.

Contingency valuation is a method of assessing value by surveying people what they are willing to spend on a given thing such as an object, a project, or program. The contingency valuation method has been a matter of debate for its of assessing environmental projects, programs, and events. One area I do think should be conductive to contingency valuation is the amount of land we are willing to allocate to county, state, and national parks. The public should come up with the value they are willing to spend to have these resources in the country. Like you can see with my assessment of endangered species protection below, I am also hesitant to subject the protection of national parks to contingency valuation because I do not think the general public values nature as much as it will in the future when we see more of the effects of environmental neglect, but I am more abliged to put park protection under the valuation of contingency valuation because I believe that the public will project more accurate numbers due to the tangibility of parks and the ability for us to refoster park environments if natural areas start to disappear. We are not able to rehabilitate an extinct species. I think that the public not only values the use of the parks but I also think they attribute an existence value to these areas and I think these numbers should be used in calculating the contingency value of parks. An existence value is a value the public puts on a good for it just existing. For instance a person may never see Niagra Falls, but that does not mean that person does not gain value from the knowledge of its existence.

Another area that I think can successfully be assessed with contingency valuation is the area of clean air and clean water. Although I do not think a certain level of cleanliness should be calculated this way, because I don’t think you can put a price on our ability to breath and sustain ourselves with water. I think asking the public what price they would put on increasing the cleanliness of air and water “one more increment”, with the term increment indicating a generic amount used just to illustrate this case, could be calculated with contingency valuation. This is because the levels already provided allow them to live a normal life, but the study would leave it up to the public to determine their value of more purer resources of air and water over other commodities.

As a note, I am unsure of my idea of contingency valuation altogether. I have doubts about the general public’s value of nature and I think a great many people at this point would “free ride” from those that really care about the environment. It also would be nice if we could just say that a clean environment is priceless, but practicality and the concepts of economics and scarcity force us to put values on things that we’d like to call priceless.

Describe 2-3 environmental problems that you think would definitely not be conductive to using contingency valuation. Briefly describe why CV would not be appropriate in this case.

Areas that I do not think it is appropriate to use for is the protection of threatened and endangered species as well as the prevention and cleanup of oil spills. The reason I think that it should not be used for threatened and endangered species protection is because one cannot put a value on the disappearance of a species. One could argue that that is the case with clean air and clean water but I think these areas are more appropriate to subject to contingency valuation because we can assume a certain level of toxins in the environment and take on a risk for small levels without disrupting our lives at all. On the other hand, scientists can predict with some level of certainty if a species can survive or not without adequate amounts of their habitat or how long a few animals left can survive without human intervention. With the knowledge that certain species will become completely extinct, it is essential that we allocate a level of funds to the cause regardless of what the public is willing to pay because once a species is gone it is gone. I am also hesitant to subject endangered species protection to contingency valuation because I do not think the general public values nature as much as it will in the future when we see more of the effects of environmental neglect and when it is too late to bring a species back from extinction. I think we should allow the Department of the Interior, the Fish and Wildlife Department, and other environmental agencies make judgements for what value is needed to protect species. It seems like the government has agreed with my judgment since a look at the Endangered Species Act of 1973 allocated an infinite amount of funds to the protection of threatened and endangered species.

The other arena that I do not think should be assessed with contingency valuation is the clean up and prevention of toxic spills including oil spills. The reason behind this is because on don’t think one can practically put a value on an accident of this level. For instance, consider the Chernobyl disaster. How can one value the loss of life and the disabilities that people have suffered as a result of the disaster.? The United States tried to value the 1986 Exxon oil spill in Alaska this way and although the payment was over one billion, experts have calculated the costs to be more along the lines of 3 billion. Overall, I think these situations are far too complex to attribute them to contingency valuation. Perhaps some of the estimates can be completed with contingency valuation such as the destruction of concrete property, but I do not think the more intangible costs such as loss of life, disability, and even loss of animal life associated with disasters can be calculated in this manner.