Environmental Management: Principles and practice

Evaluating the environment and natural resources
Ever since Ciracy-Wantrup (1952), resource inputs have been divided by assessors
into: renewable (regardless of management, also called ‘stock resources’); potentially
renewable (dependent on management); and non-renewable (Figure 5.2). Some
renewable resources can be converted to non-renewable through poor management
or natural disaster. Certain resources cannot be remade if damaged or exhausted
FIGURE 5.2 A classification of environmental resources
Source: Perman 
et al. (1996:4, Fig. 1.1)

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(e.g. biodiversity). The absorptive capacity of the environment (its ability to absorb
and neutralize damaging compounds or activities) is a resource which should be
assessed by economists. There may be opportunities to substitute for a given resource,
using labour, capital or alternative materials.
Cost—benefit analysis
Cost-benefit analysis (CBA) seeks to identify the impact of development on each
person affected at various points in time, and so estimate the aggregate value which
each person gains or loses. There is a huge literature on CBA, its shortcomings,
modifications and alternatives (Brent, 1997). Widespread dissatisfaction with CBA’s
effectiveness in valuing environmental issues has led to many suggested improvements
or alternatives, some favouring quantitative approaches, and others qualitative (Munda
et al., 1994). One focus has been to try to improve its consideration of environmental
issues, but this is still far from adequately solved (Hanley and Spash, 1994). A
development since the early 1990s is the concept of best available techniques not
involving excessive economic costs (BATNEEC). This places the onus on developers
to adopt the best techniques available, with only ‘excessive cost’ as a viable excuse
for not doing so (Pearce and Brisson, 1993).