What is the value of the Yasuní National Park?

M. Jimena González-Ramírez, Manhattan College, jimena.gonzalez@manhattan.edu
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Summary

This activity is meant for an introductory or advanced environmental economics course that covers valuation methods. Prior to class, students watch 4 short videos explaining valuation methods and listen to an NPR Planet Money podcast about the Yasuní National Forest. During class, students are asked to choose the best valuation method to estimate the benefits of this park.

Context for Use

This activity is meant for an introductory or advanced environmental economics course that covers valuation methods.

The students should be familiar with valuation methods (the videos summarize them well) as well as different types of values that people may put on environmental amenities.

Overview

Prior to class, students watch 4 short videos explaining environmental valuation and valuation methods. Moreover, students listen to an NPR Planet Money podcast about the Yasuní National Forest:
1) Valuation of Ecosystem Services: Classes of Values by The Conservation Strategy Fund: https://www.youtube.com/watch?v=q8AZHtF2f50 (7:04)
2) Valuation of Ecosystem Services: Travel Cost Method by The Conservation Strategy Fund: https://www.youtube.com/watch?v=AjcQpzIBu1I (3:54)
3) Valuation of Ecosystem Services: Hedonic Pricing Method by The Conservation Strategy Fund: https://www.youtube.com/watch?v=LkXVCQam5kw (2:54)
4) Valuation of Ecosystem Services: Contingent Valuation by The Conservation Strategy Fund: https://www.youtube.com/watch?v=__xzmIG4L8s(7:28)
5) NPR Planet Money Podcast: Episode 433 Holding a rain forest hostage- update (Aired on 8/30/2013; Length: 18:37)

During class, students are asked to choose the best way to estimate the value of this park. The choices include valuation methods taught in environmental economics courses, as well as the potential earning from drilling oil in the park. The latter was used by the Ecuadorian government in their request for funds to compensate Ecuador for not drilling oil.

Expected Student Learning Outcomes

  • Students will consider different values of an environmental amenity when assessing the benefits of it.
  • Students will be able to assess the advantages and disadvantages of different valuation methods used in environmental economics.

Information Given to Students

Prior to class:
Watch:

Listen to:


During class:

Ecuador's president wanted other countries to compensate Ecuador for not drilling oil underneath the Yasuni National Park (Recommended: look up images of the park). The proposal requested an amount equal to half of the potential earnings from drilling oil in the area.

Suppose that your team is a working group of the United Nations Environmental Program (UNEP) tasked with determining whether the benefits of paying Ecuador not to drill are worth the cost.

What is the best way to estimate the value of Yasuní National Park?

A. The value is best estimated by the potential earnings from drilling oil in the area
B. The value is best estimated by the travel cost method
C. The value is best estimated by a contingent valuation method
D. The value is best estimated by hedonic pricing method

Teaching Notes and Tips

Each team should simultaneously reveal its choice.
Discussion questions:
  • What was the most important reason for your choice?
  • Do the potential oil earnings capture the environmental value of the park? Why?
  • What are the advantages and disadvantages of each method?
  • If you were part of a team estimating the value of the Yasuní, how would you carry out each method? What are some of the challenges of implementing each method?

Assessment

The learning objectives can be assessed with multiple-choice questions about different environmental values and methods. A similar question can be given in an exam for another environmental amenity. A student would demonstrate the attainment of the second learning objective through the reasoning behind his/her choice.

References and Resources

Videos:

NPR Planet Money Podcast Episode: