The Dutch Ministry of Economic Affairs commissioned Arcadis and CE Delft to develop guidance for valuing and monetizing natural capital as part of a social cost benefit analysis (SCBA).
The developed guidance offers a framework for valuing and monetizing changes in nature by means of ecosystem services. This guidance is meant as an annex to the exiting official SCBA framework In the Netherlands, to be used by all government funded SCBA.
Currently, such annexes are being developed for specific subjects (capita selecta) in SCBA: social, environmental and natural capital issues. SCBA is a tool that is used to inform decision-makers on the direct and indirect welfare effects of projects and policies.
The guidance helps conduct social cost benefit analyses and incorporates impacts on natural capital as a result of projects and policies implemented in the Netherlands.
In the guidance, a stepwise approach has been followed: 1) determining relevant physical impacts, 2) establishing changes in connected ecosystem services (intermediate and end services and 3) valuation of the changes of ecosystem end services by means of different monetizing techniques.
The guidance gives specific attention to dealing with biodiversity. Biodiversity can partly be incorporated via ecosystem services, but changes in the natural capital stock of biodiversity should be present in the analysis to fully inform decision-making. For this purpose, in the guidance the methodology of so called “nature points” is recommended to use.
In all sections, examples are provided of historic, real SCBA cases in which natural capital has been assessed, commenting on the methodology applied in those cases to illustrate the recommended approach in the guidance.