Many people value certain environmental resources even if they have never actually visited or “used” those resources. For example, a person might assign what economists call “nonuse values” to the Grand Canyon, the Great Barrier Reef, or a particular endangered animal species even if she has never hiked the Canyon, gone scuba diving on the Reef, or personally encountered that endangered species. Some scholars have categorized nonuse values into three types: the “option value” is the value a person places on preserving an environmental resource so that she has the option of using it in the future; the “bequest value” is the value the person places on being able to preserve the resource for the enjoyment of future generations; and the “existence value” is the value the person places on the mere knowledge that the resource exists.
Consensus has proved elusive on whether and how nonuse values should be considered in cost-benefit analysis of new environmental projects or regulations. In economic terms, such valuation will have the positive effect of incentivizing people not to destroy the resource. But economists have struggled to assign actual dollar values suitable for use in such a calculus. One widely used but controversial method called “contingent valuation” involves the use of surveys to find out what individuals would pay to preserve environmental resources. Survey results are then averaged and generalized across entire populations. The design of the survey questions is controversial, and the results are often rigidly contested or even rejected out of hand. One famous CV study estimated the nonuse harm of the Exxon Valdez disaster at between two and eight billion dollars.
Quite apart from the raging debate over the validity of contingent valuation, other scholars are waging a separate struggle over whether it is harmful for society to “commodify” or “commoditize” certain things.
Some have argued that environmental resources should not be commoditized because they are nonfungible – or, to extend the argument a bit, that those who assign dollars to nonuse values are improperly comparing apples to oranges. They argue that the harm of commoditization is not easily quantifiable or verifiable; it is intrinsic, or even has a moral character.
Most environmentalists would probably argue that nonuse values should be considered in cost-benefit analyses, but they might also believe that commoditization is an intrinsic environmental harm. Thus, in my view, an unaddressed tension exists between appropriate consideration of environmental nonuse values, and unhealthy commoditization of those same features. This tension, I believe, cannot easily be resolved.