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Mitigation Cost-Based Evaluation

Aim of the resource

Cost-based methods give a conservative estimate of the value of ecosystem services provided that the most cost-effective actions for avoiding, mitigating, restoring, compensating and offsetting environmental damages have been undertaken. Actions may be specifically designed to address a particular ecosystem service, but costs are often representative of bundles of ecosystem services.

Using the resource
Requirements for using the resource:
<li>Based on observed market prices where based on actual or potentially feasible measures, therefore requires costs resulting from actions as part of environmental planning, impact assessment and management</li>
<li>Costs for 'avoidance', 'mitigation' or 'restoration' actions are required</li>
<li>Requires spreadsheet capability and expertise</li>
Potential benefits from using the resource
Easy and fast to use
Draws on existing data and covers a wide range of ecosystem services
Recognised and established accounting approach which is compatible with environmental regulations
Potential limitations from using the resource
Does not include welfare measures
Uncertain effectiveness of mitigation restoration and offsetting actions are not possible to quantify ex ante. The less effective a measure the more valuable the ecosystem services appear
When applied without basis in actual projects, ad hoc assumptions regarding environmental liability standards and potentially feasible actions are required (generating hypothetical costs).
When exploring cost-effectiveness of actions the method has commonalities with 'shadow pricing'
Scale of application:
Practical information
UN languages in which the resource is available:
Development stage:
Full, working product
Contact details
Dr David Barton
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Mitigation cost-based valuation methods are a group of ’exchange-based’ techniques that use the cost of actual measures to maintain ecosystem service provision as a proxy for the value of avoiding, mitigating or restoring the loss of services ecosystems provide. As costs are estimated based on observable marketprices it is a group of methods that is also accepted in guidelines on experimental ecosystem accounting (EEA) within the system for economic and environmental accounting (SEEA). Mitigation cost-based valuation methods are associated with steps of the mitigation hierarchy.


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