12Lecture - Lecture 12 Valuation of Environmental Benefits...

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Lecture 12 Valuation of Environmental Benefits 14:46 Outline Types of benefits Concepts in Benefits Measurements Uncertainty, Expected Benefits, and Risk Aversion Methodologies for Benefits Valuation Use Benefits Use benefits: refer to the utility arising from direct or indirect physical use of a resource  including commercial use, recreational use, and aesthetic use. There are two  subcategories of use benefits Consumptive Use Benefits: are private benefits that are derived from resources  consumption and contribute to resource depletion. Examples are farming, forestry,  fishing, grazing, hunting, mining Non-consumptive use benefits: are generally public good benefits that do not contribute  to resource depletion. Examples are swimming, boating, hiking, camping, viewing  wildlife. Nonuse Benefits Nonuse benefits: refer to utility that is derived from environmental resources without  physical interaction with the resource. There are several subcategories: Option Value Benefits: arise in situations where depleting a resource is an irreversible  action. For example when large areas of rainforest are slashed and burned,  unknown/undiscovered species of plants, insects, and animals may become extinct.  Some of these plants, for example, may hold important medicinal value that we will now  never know about. It is derived from maintaining the option to utulize future, unknown  benefits by avoiding or delaying irreversible actions. Vicarious Consumption Benefits: refers to utility derived from the consumption of  environmental resources by other individuals that is, you may derive utility when your  friends visit Manhattan from their enjoyment of Tuttle Creek Lake, since this makes you  feel like a good host.  Nonuse Benefits Cont.
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Stewardship benefits: are moral benefits that we derive from knowing that we are doing  out parts as stewards of the worlds resources. There are two types of Stewardship  Benefits: Bequest Benefits: refer to utility derived from passing an environmental resource on to  children and or future generations Existence Value, or Inherent Benefits refer to utility derived from the knowledge of the 
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