A2.27 Biodiversity can be thought of as a core component of natural capital that supports the provision of environmental goods and services to people. It is defined by the Convention on Biological Diversity as 'the variability among living organisms from all sources including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and ecosystems'.
A2.28 Valuation is typically estimated per hectare or per household, using stated preference methods. Biodiversity may be reflected by, or associated with other benefits e.g. recreation, pollination, water quality and amenity. To avoid double counting, biodiversity should only be valued where it directly impacts human wellbeing and where it is additional to other benefits. For example, non-use value for biodiversity represents a legitimate additional category of value that can be added to direct and indirect use values for final goods and services.
A2.29 Defra have published a discussion paper which presents a broad discussion on valuing diversity in the appraisal context and specific guidance on biodiversity values. In cases where available stated preference estimates of biodiversity value are insufficiently robust for use, an alternative is to use quantitative metrics of biodiversity change as objectives and calculate the costs of delivering those objectives.31
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31 For an example see Bateman et al (2013) "Bringing ecosystem services into economic decision making: Land use in the UK" Science, Vol 341, No. 6141: 45-50, 5th July 2013. DOI: 10.1126/science.1234379.