1.3 Best practice methodologies 1.3

1.3 Best practice methodologies
1.3.1 Valuation approaches Individual preferences are the most important indicator to value costs imposed on society (externalities). The preferred solution is to estimate damage costs. For some externalities, like long term risks, collective preferences also have to be considered. In order to value individual preferences, the following approaches are relevant:
 The willingness to pay (WTP) for an improvement.
 The willingness to accept (WTA) a compensation for non-improvement.
Several methods can be used to approximate resource costs directly. They can be measured by the market price of a certain effect (losses, compensation). In order to get the real costs, taxes and subsidies have to be extracted using factor costs. If resource costs are not available, hypothetical market situations have to be constructed. Several methods can be used; all of them have strengths and weaknesses: The stated preference (SP) method using a contingent valuation approach directly measures the WTP, but depends very much on the survey design and the level of information, and suffers from the fact that it involves hypothetical expenditures only. Also indirect methods like revealed preferences (RP; e.g. hedonic pricing where house price differentials can be used to estimate costs of noise) are therefore viable. For several environmental costs (e.g. relevant for long term risks and habitat losses), more differentiated approaches are necessary, since the stated preference approach is only useful for the valuation of individual key values such as the value of a human life.
A major recommended approach for evaluating environmental impacts is the impact pathway approach (such as used by the ExternE method specifically developed for air pollution). This approach follows the dose-response function considering several impact patterns on human health and nature. Sometimes the lack of certain information (or high uncertainty) on the dose-response function renders it necessary to combine this approach with a standard price approach, as an alternative for the model estimation of the damage level. In this case, as a second best approach, the avoidance cost approach (cost to avoid a certain level of pollution) can be used.
Table 2 summarises the best practice approaches for different cost categories pointing out the sensitive issues.

1.3 Best practice methodologies 
1.3.1 Valuation approaches Individual preferences are the most important indicator to value costs imposed on society (externalities). The preferred solution is to estimate damage costs. For some externalities, like long term risks, collective preferences also have to be considered. In order to value individual preferences, the following approaches are relevant: 
 The willingness to pay (WTP) for an improvement. 
 The willingness to accept (WTA) a compensation for non-improvement. 
Several methods can be used to approximate resource costs directly. They can be measured by the market price of a certain effect (losses, compensation). In order to get the real costs, taxes and subsidies have to be extracted using factor costs. If resource costs are not available, hypothetical market situations have to be constructed. Several methods can be used; all of them have strengths and weaknesses: The stated preference (SP) method using a contingent valuation approach directly measures the WTP, but depends very much on the survey design and the level of information, and suffers from the fact that it involves hypothetical expenditures only. Also indirect methods like revealed preferences (RP; e.g. hedonic pricing where house price differentials can be used to estimate costs of noise) are therefore viable. For several environmental costs (e.g. relevant for long term risks and habitat losses), more differentiated approaches are necessary, since the stated preference approach is only useful for the valuation of individual key values such as the value of a human life. 
A major recommended approach for evaluating environmental impacts is the impact pathway approach (such as used by the ExternE method specifically developed for air pollution). This approach follows the dose-response function considering several impact patterns on human health and nature. Sometimes the lack of certain information (or high uncertainty) on the dose-response function renders it necessary to combine this approach with a standard price approach, as an alternative for the model estimation of the damage level. In this case, as a second best approach, the avoidance cost approach (cost to avoid a certain level of pollution) can be used. 
 Table 2 summarises the best practice approaches for different cost categories pointing out the sensitive issues.

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1.3 Best practice methodologies 1.3.1 Valuation approaches Individual preferences are the most important indicator to value costs imposed on society (externalities). The preferred solution is to estimate damage costs. For some externalities, like long term risks, collective preferences also have to be considered. In order to value individual preferences, the following approaches are relevant:  The willingness to pay (WTP) for an improvement.  The willingness to accept (WTA) a compensation for non-improvement. Several methods can be used to approximate resource costs directly. They can be measured by the market price of a certain effect (losses, compensation). In order to get the real costs, taxes and subsidies have to be extracted using factor costs. If resource costs are not available, hypothetical market situations have to be constructed. Several methods can be used; all of them have strengths and weaknesses: The stated preference (SP) method using a contingent valuation approach directly measures the WTP, but depends very much on the survey design and the level of information, and suffers from the fact that it involves hypothetical expenditures only. Also indirect methods like revealed preferences (RP; e.g. hedonic pricing where house price differentials can be used to estimate costs of noise) are therefore viable. For several environmental costs (e.g. relevant for long term risks and habitat losses), more differentiated approaches are necessary, since the stated preference approach is only useful for the valuation of individual key values such as the value of a human life. A major recommended approach for evaluating environmental impacts is the impact pathway approach (such as used by the ExternE method specifically developed for air pollution). This approach follows the dose-response function considering several impact patterns on human health and nature. Sometimes the lack of certain information (or high uncertainty) on the dose-response function renders it necessary to combine this approach with a standard price approach, as an alternative for the model estimation of the damage level. In this case, as a second best approach, the avoidance cost approach (cost to avoid a certain level of pollution) can be used. Table 2 summarises the best practice approaches for different cost categories pointing out the sensitive issues.

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1.3 Praktik terbaik metodologi
1.3.1 Penilaian pendekatan preferensi individu adalah indikator yang paling penting untuk biaya nilai yang dikenakan pada masyarakat (eksternalitas). Solusinya disukai adalah untuk memperkirakan biaya kerusakan. Untuk beberapa eksternalitas, seperti risiko jangka panjang, preferensi kolektif juga harus dipertimbangkan. Dalam rangka untuk menghargai preferensi individu, pendekatan berikut relevan:
.  Kemauan membayar (WTP) untuk perbaikan
.  Kemauan untuk menerima (WTA) kompensasi untuk non-perbaikan
Beberapa metode yang dapat digunakan untuk perkiraan biaya sumber daya secara langsung . Mereka dapat diukur dengan harga pasar efek tertentu (kerugian, kompensasi). Dalam rangka untuk mendapatkan biaya riil, pajak dan subsidi harus diekstrak menggunakan biaya faktor. Jika biaya sumber daya tidak tersedia, situasi pasar hipotetis harus dibangun. Beberapa metode dapat digunakan; mereka semua memiliki kekuatan dan kelemahan: Metode dinyatakan preferensi (SP) menggunakan pendekatan valuasi kontingen langsung mengukur WTP, namun sangat tergantung pada desain survei dan tingkat informasi, dan menderita dari fakta bahwa itu melibatkan pengeluaran hipotetis hanya . Metode juga tidak langsung seperti preferensi mengungkapkan (RP; misalnya harga hedonis mana perbedaan harga rumah dapat digunakan untuk memperkirakan biaya kebisingan) karena itu layak. Selama beberapa biaya lingkungan (misalnya yang relevan untuk panjang risiko jangka dan kerugian habitat), pendekatan yang lebih dibedakan diperlukan, karena pendekatan preferensi menyatakan hanya berguna untuk valuasi nilai kunci individu seperti nilai kehidupan manusia.
Pendekatan yang direkomendasikan utama untuk mengevaluasi dampak lingkungan adalah pendekatan dampak jalur (seperti yang digunakan oleh metode ExternE khusus dikembangkan untuk polusi udara). Pendekatan ini mengikuti fungsi dosis-respons mempertimbangkan beberapa pola berdampak pada kesehatan manusia dan alam. Kadang-kadang kurangnya informasi tertentu (atau ketidakpastian yang tinggi) pada fungsi dosis-respons menjadikan itu diperlukan untuk menggabungkan pendekatan ini dengan pendekatan harga standar, sebagai alternatif untuk model estimasi tingkat kerusakan. Dalam hal ini, sebagai pendekatan terbaik kedua, pendekatan biaya penghindaran (biaya untuk menghindari tingkat tertentu polusi) dapat digunakan.
Tabel 2 merangkum praktek terbaik pendekatan untuk kategori biaya yang berbeda menunjukkan isu-isu sensitif.

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