The new approach to wilderness preservation through benefit-cost analysis

Abstract

Over the last 15 years, economists of Resources for the Future led by John Krutilla have been developing a new approach to wilderness preservation. This paper offers a concise exposition of their approach and adds a few steps. The basic ingredient of the new approach is a perception of declining net benefits of wilderness development and rising net benefits of wilderness preservation over time. These alter the entire shape of the benefit-cost analysis of potential development. The new steps involve reversibility, postponability, and recognition of multiple interest rates.