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# New Formulas For Valuing "Environmental Resources" Derived.

Thought it seems to have been in the works for a bit per se, there seems to be a new formula or series of formulas for deriving the value of environmental goods like fish stocks for example.

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A "rundown" of this can be found at the following link;

www.sciencedaily.com/releases/2014/06/14...

(author's of said research papers are; Eli Fenichel and Joshua Abbott)

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For a more complete perspective one can find lots of the papers that led up to the final conclusions per se online by searching for; "Natural Capital; from metaphor to measurement" on Google for example.

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For the equation its self if one clicks the first link that comes up on Google search per se; for me this was the ncsu.edu link; one can find sort of the meat and potatoes per se of the calculations beginning at the bottom of page 5 or 6 onwards if one want to skip ahead, where one can see the rationale behind the sort of variables used and the interactions amongst them that are similarly presumed/assumed.

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As a brief recap the equation seems to take into account the following;

-natural growth rates of the resource--might think of it as (g)

-the way that human behavior degrades or enhances said resource over time--might think of it as a sort of potentially invertible(according to normal variable associated logic (r))

-als interestingly enough the "social capital" attached to the resource

-and like most equations for finance per se, some relation between the above and a period of time(at times in an NPV like "lump sum" format.

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In addition to this the equation is pretty cool and seems to draw on some often seen financial variables or modifiers per se, namely the "e to the -t" which one sees in option pricing etc. Also the t its self is sort of modified, so that perhaps is also similar to some financial equation elements one may come across in the valuing of future prices/values based on volatility over time per se, here that volatility being represented by perhaps growth vs. human impact roughly speaking.

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Either way its kind of a cool paper, and personally I think its really great that the researchers in question did this, because now perhaps we can have more realistic approaches to environmental resource management per se, perhaps both via regulation and via the courts per se.

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This may perhaps be as good for governments and investors, as it is for investment companies, for presumably now lawsuits against them wouldn't just be a sort of very rough if not sort of romantic figure per se, which seems to be the current logic. For example the BP oil spill being catastrophic and still affecting the gulf-coast, seemed to command a price tag of 10 billion USD plus, what was that based on? Well presumably sentimental responses to outrage and the stories of oil covered pelicans etc., which though tragic of course, are perhaps not a good representation of a somewhat-precise valuation metric per se.(admittedly also probably took into account salaries of displaced fishermen, historic cost per square mile for cleanup etc. but presumably the sort of rough representation of the temporary human response to the tragedy was a fundamental sort of constant or under-girding of said equation as-well)

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Either way, perhaps it'll be really cool when someone puts together some massive spreadsheet or series of spreadsheets or programs to sort of deduce the currency denominated value of the world's natural resources; perhaps we will be surprised by the value around that societies have at various times sort of taken for granted per se. Perhaps it will also be easier to convince third world countries to improve hospitality/conservation efforts when they have a sort of somewhat hard-figure in front of them, which is what is often presented in the case of natural resource extraction etc. Perhaps this will also make it easier to find compromises, where one can find sort of ideal opportunity costs etc, so that resource extraction and nature conservation can work together better per se.

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Either way surely a bunch of fish, gorillas, and natural resource investors out there somewhere have a reason to smile today, and hopefully everyone's investments are producing similar responses per se. Thank again for reading, happy weekend per se.

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-as a side note I would link the paper directly but the text of the paper requests that one contact the authors before doing so, so I don't know how long that would take so, the search suggested above should yield similar results per se :) .

(click to enlarge)Click to enlarge

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