Using an adapted HEP to assess environmental cost

The situation regarding the loss of biodiversity and ecosystem services is now critical. Consequently, environmental targets have been determined and environmental legislations at every level tend to be more demanding. The result at local scale is that land planners have to take more rigorous account of the environmental damage stemming from their infrastructure development plans. Several economic valuation methods can be used to perform a monetary valuation of losses of natural areas. However, existing valuation methods have reached their limits when dealing with land planning in complex natural areas (i.e. unfamiliar goods). We propose to use a method based on the American Habitat Evaluation Procedure (HEP) to assess the environmental cost of infrastructure development plans. The “adapted” HEP is an equivalence-based valuation method that bases the valuation of environmental cost on the environmental damage itself rather than willingness to pay. We find that compared to more conventional methods, the “adapted” HEP gives a higher value to lost environmental assets, which is rather promising.

► Natural areas are highly unfamiliar goods. ► These goods tend to reveal the limitations of conventional methods. ► We use the “adapted” HEP to assess environmental cost. ► It bases the valuation on ecological data rather than willingness to pay.