Question

Question 1:

What are the major characteristics of natural resources that lead to the valuation of natural resources being different from that of other goods (e.g., financial assets, personal goods, etc.)? Consequently, which valuation model(s) are most suitable to valuate natural resources? Use example(s) if necessary.

(Note: it is not sufficient to just say ‘(in) direct’. Your answer needs to be more specific than that.)

Answer 1

Natural resources are valued in monetory terms, like any other goods. Natural resources are considered to be assets, while aspects like pollution come under liabilities.
Valuation includes calculating the marginal changes in the value of natural resources, mainly due to human actions or some policies, rather that trying to assess the total value of the resources.
In simpler terms, stock is never calculated, but the change in stock is observed.
According to me, DELPHI METHOD is one of the best valuations method. Under this experts are interviewed using survey based techniques. Expert having knowledge in the field can assess better as it's not easy to give monetory value to environmental goods/services. They have proper understanding and thus, can do it well.