Multi-Criteria Decision Analysis and Cost-Benefit Analysis: Comparing alternative frameworks for integrated valuation of ecosystem services

Abstract

Multi-Criteria Decision Analysis (MCDA) methods has been promoted as an alternative approach to monetary economic valuation of ecosystem services in Cost-Benefit Analysis framework (CBA). We discuss the potential of MCDA in providing a framework for integrated valuation of ecosystem services.We conclude that MCDA does in general perform better than CBA and associated monetary valuation techniques in several aspects that are essential in ecosystem service valuation. These include the ability of a valuation method to account for multiple dimensions of well-being, including ecological and economic as well as cultural and moral aspects of a policy or management problem and to facilitate open and transparent public debate on the pros and cons of alternative courses of action, including the distribution of gains and losses across beneficiaries of ecosystem services. The capacity of MCDA to articulate values related to ecosystem services depends on individual methods used in the MCDA process. More importantly, it depends of the ways in which the process is organized and facilitated. However, MCDA cannot provide representative information of the values of wider population. Further empirical and theoretical research is needed on the potential of hybrid methodologies to combine monetary valuation and MCDA in fruitful ways.

Planning for Ecosystem Services in Cities

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“…To foster forest transition, we must understand the interconnections between forest changes, the ecosystem services produced by them along the process, and the social perceptions, rules and norms (values) that decision-makers at different scales hold over them and how this then affects decision-making. [59][60][61] The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) has stressed the importance of inclusive valuation. 62 Its recently approved regional assessments highlight how diverse values and value systems shape interactions between people and nature including the use, management and conservation of nature's contributions to people.…”

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