Factsheet: Mitigation Cost-based Valuation

Mitigation cost-based valuation methods are a group of ’exchange-based’ techniques that use the cost of actual measures to maintain ecosystem service provision as a proxy for the value of avoiding, mitigating or restoring the loss of services ecosystems provide. As costs are estimated based on observable market-prices it is a group of methods that is also accepted in guidelines on experimental ecosystem accounting (EEA) within the system for economic and environmental accounting (SEEA)(UN 2014). Cost-based methods give a conservative estimate of the value of ecosystem services provided that the most cost-effective actions for avoiding, mitigating, restoring, compensating and offsetting environmental damages have been undertaken. Actions may be specifically designed to address a particular ecosystem service, but costs are often representative of bundles of ecosystem services. Mitigation cost-based valuation methods are associated with steps of the ”mitigation hierarchy”