Balancing environmental protection with economic benefits
THE case for finding out the value of "environmental outcomes" from major government decisions on policy and big developments should be assessed when the stakes are high.
A Productivity Commission paper has found that while most policy decisions in Canberra do not involve "non-market valuation" methods, they can help to make major decisions.
The method, the paper argues, helps to balance the potential benefits to the community of environmental protection, versus the economic benefits of major projects or policy changes.
The paper is timely as the state and federal governments continue to grapple with big decisions balancing the environment and economy, especially near the Great Barrier Reef, where major projects hang in the balance.
While the Commission does not advocate, the paper argued increasing such valuation methods could result in better decisions.
"Weighing up these trade-offs is challenging because the environment contributes to people's well-being in ways that do not involve markets," it reads.
"There are a range of non-market valuation methods that can be used to analyse these trade-offs, but they have not been widely used in Australia.
"Increasing their use has the potential to result in decisions that better reflect community preferences and achieve greater environmental benefit per dollar of cost."
The authors also found that while such methods could be "time-consuming and costly", the case for using them was "strongest where the financial or environmental stakes are high".