A valuation of Rutland Water using environmental economics

There is increasing pressure for the full environmental consequences of investment decisions to be included in project appraisal procedures. Environmental economic valuation techniques offer the potential for monetary values to be systematically estimated for such consequences and thus allow their inclusion in project analysis. A review of these techniques has been undertaken, and by way of testing their practical application a desk-top valuation of Rutland Water, UK, has been carried out. The results indicate that the total annual value of the reservoir is between £123 million and £215 million. However, of this total a minimum of 64% is attributable to functions additional to its primary purpose as a source of potable supply. The magnitude of these additional values indicates that confidence in them can only be achieved by further investigation into their theoretical and methodological basis.