In an article by the Dutch CPB (bureau for economic policy analysis) the application of the contingent value method is critically assessed for cost benefit analysis. They question whether nature and landscape values can be expressed in Euros. Although the method is widely used in assessing e.g. infrastructure projects, many critics remain.
The method is used to determine the economic value of non-market resources. This could be biodiversity, but also education. It is important to note that both opposers and advocates of this technique include respected, nobel prize winning economists. It is therefore unrealistic to label this method wrong or right, but for the sake of the eco currency project it is relevant to look at some of its implications.
Inherently, uniqueness of products is never fully valued when they are expressed in money, whether they are produced goods(e.g. coffee machines or cars) or natural(e.g. plants or animal species). However, replaceable, often fabricated goods are more likely to be abstracted in such way (full awareness of ecologic interconnectedness and therefore value is impossible since we can’t grasp its complete complexity yet). This technique will therefore always be dubious.
When used to determine the cost-benefits of lets say, a new tunnel, the contingent value method is generally expensive and complex. Now imagine a worldwide valuation of ‘nature’ as a whole, and it is clear that this is not a realistic technique for our use.
Instead, ecological consequences should be mapped parallel to economic ones, possibly in a separate currency. The difficulty shifts towards determining the exchange rate between the two but at least that can be variable.