How relevant are non-use values and perceptions in economic valuations? The case of hydropower plants

Abstract

The construction of hydropower plants, particularly of large ones, is far from being a consensual decision: advocates defend their construction based on the unquestionable benefits hydropower provides, while critics argue that these facilities are far from harmless and cause adverse impacts on the environment, being not only against the construction but also demanding the destruction of existing ones. We review a selection of recent empirical studies concerning impacts of hydropower developments, to make a case for the consideration of non-use values in the economic valuation of the environmental and social impacts of hydropower plants, through the use of non-market valuation methodologies. Additionally, we present data from a case study of hydropower economic valuation, where different subgroups of the population with differing degrees of contact and familiarity with hydropower rate their perception of impacts. Respondents with more contact are less penalizing of hydropower than other respondents. We conclude that non-use values are non-negligible and can be valued through stated preference methods, but researchers should take into consideration perceptions and the role of users and non-users. Non-use values should thus not be neglected by policy makers and regulators at the planning and public consultation stages or as part of the decommissioning decision.