Quantitative Valuation in Environmental Law

Quantitative valuations of environmental impacts affect and sometimes determine the substance and stringency of many environmental laws. At the same time, a constellation of psychological factors makes environmental impacts unusually difficult for individuals to see, understand, and care about. As a result, the environmental valuations that inform environmental law are particularly vulnerable to contextual cues, small shifts in framing, and methodological choice, and can lead to sincere but wildly varying valuations of the same underlying environmental impacts. These distortions become increasingly apparent when valuations are quantified, and in fact can be used predictably to push quantified valuations “up” and “down” using a toolkit of identifiable contextual and methodological levers. From a practice perspective, it can be helpful for attorneys to be able to recognize and use levers to drive quantitative valuations of environmental impacts up or down, and for judges to understand the mechanisms that will have predictable impacts on quantified valuations of environmental impacts. From a public policy perspective, while it is helpful to recognize that environmental valuations may be particularly sensitive to methodological and contextual choice, it is also important to understand that different uses of quantitative valuations within environmental law are differently sensitive to these kinds of shifts in valuation. Because quantitative environmental valuations will rise and fall based upon engagement with context and valuation methodology, refusal to engage with quantified valuation of environmental impacts—historically engaged in by many with progressive and pro-environmental perspectives, but which has also grown more common in recent years amongst conservative and pro-industry perspectives—is likely to have an outsized impact on the quantified value of environmental impacts, and thus on the substance and stringency of environmental regulation.