Methods of Valuation of Ecosystem Assets and their Assimilation Services

Abstract

An urgent problem of the modern world is the degradation of ecosystems, which requires a radically new approach to assessing and ensuring further, cost-effective use of their potential. However, the value assessment of ecosystem assets (capital) that provide assimilation and other, in particular, oxygen-producing, services to territorial communities has not yet been conducted. It is proved that if ecosystem assets are recognised as the property of territorial communities and the latter are granted the right to dispose of their property (ecosystem assets), the problem of valuation of such assets becomes a priority task. The purpose of the study is to compare scientific approaches to the valuation of ecosystem assets and develop a method for evaluating them, considering the ecosystem services that they provide to territorial communities during their life cycle. The study involves general scientific methods of economic studies and specific ones. The essential features of methods for evaluating a natural resource object are determined, which are the assessment methodology and financial and economic tools used for its practical implementation. Based on this, the analysis is conducted and the substantive features of the method of discounting cash flows (rent valuation method), cost, market prices, hedonistic pricing (price advantages), transport costs, conditional survey method, etc. are established. It is proved that these methods do not meet the requirements of value-market assessment and do not allow for an adequate assessment of the assimilation potential of ecosystems. An ecosystem asset should be considered from the standpoint of environmental safety, so the assessment methods should be different. In view of the above, the most optimal method is proposed: the value of ecosystem assets is determined by the value of the entire complex of assimilation and oxygen-producing services provided by them for their entire life cycle. The author’s method was tested on the example of poplar alley, which is part of Taras Shevchenko Boulevard, located in Kyiv