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The Economic Value of Biodiversity

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  • Nick Hanley
  • Charles Perrings

Abstract

Biodiversity is declining worldwide, and the costs of biodiversity losses are increasingly being recognized by economists. In this article, we first review the multiple meanings of biodiversity, moving from species richness and simple abundance-weighted species counts to more complex measures that take account of taxonomic distance and functionality. We then explain the ways in which protecting biodiversity generates economic benefits in terms of direct and indirect values. Empirical approaches to estimating direct and indirect values are presented, along with a selection of recent evidence on how substantial these values are. The use of asset accounting approaches to track biodiversity values over time is discussed, in the context of sustainable development paths. Finally, we review some important challenges in valuing biodiversity that remain to be solved.

Suggested Citation

  • Nick Hanley & Charles Perrings, 2019. "The Economic Value of Biodiversity," Annual Review of Resource Economics, Annual Reviews, vol. 11(1), pages 355-375, October.
    • Handle: RePEc:anr:reseco:v:11:y:2019:p:355-375
    DOI: 10.1146/annurev-resource-100518-093946
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    Citations

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    Cited by:

    1. Elia Moretti & Michael Benzaquen, 2024. "Mitigating Farmland Biodiversity Loss: A Bio-Economic Model of Land Consolidation and Pesticide Use," Papers 2407.19749, arXiv.org, revised Oct 2024.
    2. Christoph Schulze & Katarzyna Zagórska & Kati Häfner & Olimpia Markiewicz & Mikołaj Czajkowski & Bettina Matzdorf, 2024. "Using farmers' ex ante preferences to design agri‐environmental contracts: A systematic review," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 44-83, February.
    3. Hametner, Markus, 2022. "Economics without ecology: How the SDGs fail to align socioeconomic development with environmental sustainability," Ecological Economics, Elsevier, vol. 199(C).
    4. Grover, Isobella & O'Reilly-Wapstra, Julianne & Suitor, Shaun & Hatton MacDonald, Darla, 2023. "Not seeing the accounts for the forest: A systematic literature review of ecosystem accounting for forest resource management purposes," Ecological Economics, Elsevier, vol. 212(C).
    5. Amy W. Ando, 2022. "Equity and Cost-Effectiveness in Valuation and Action Planning to Preserve Biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(4), pages 999-1015, December.
    6. Lewis, David J. & Kling, David M. & Dundas, Steven J. & Lew, Daniel K., 2022. "Estimating the value of threatened species abundance dynamics," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).

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