When one thinks of putting a value on something, you might often put it terms of monetary price. But the concept of putting a monetary value on environmental goods like lakes, wildlife, and fresh air would seem foreign to most. Part of the reason this sounds strange is that most of these environmental goods are public goods. In addition, many people have an philosophical or ethical aversion to assigning market value to nature. Yet in order to deal with environmental issues like water pollution in today's capitalistic world, if a monetary value isn't attached to something it often falls by the wayside. So in order to address these environmental concerns, environmental costs and benefits need to be put into economic terms that can be represented in a market so they can be balanced out with private market benefits and costs. To accomplish this a survey of what benefits the global environment bears should be done, along with a determination of how the environment should be valued. It is critical to identify reliable technical instruments to measure these benefits. Any problems confronting these evaluations should be noted. Finally, possible policy and other applications of valuation should be investigated.
This comprises the base of environmental valuation, which is elaborated upon here:
All material in this Valuation section came from the following source: Hanley, Nick, Jason F. Shogren & Ben White. Introduction to Environmental Economics. Chapter 3. Oxford University Press, NY.