Economic valuations cannot really measure intrinsic values. Economic theory generally assumes the constancy of environmental conditions (OU ch3 p94) but we are well aware this is not the case in reality. Economic values are required when a monetary issue is at stake, and then attributed to the issue. This sometimes takes the form of monetary compensation as in the Deepwater Horizon Oil spill. The public demanded recompense for, amongst other items, seafood industry loss of revenue, and damage to property. .
What is compared in the value is the private good against the public good. A private good is rival and excludable, that is to say, one person can 'exclude' or prevent another from using it. Rival is what remains for another. An example would be a private fishpond. The fish in the pond reduce when caught and eaten and the owner can 'exclude' others from using the pond. A public good is non-rival and non-excludable. Using it does not reduce consumption and no one is prevented from using it. Fresh air, or the atmosphere, is considered a public good as no one is prevented from breathing it. Also called a Global Common or a shared resource. Both Hardin and Pigou commented on the tragedy of the Global Commons.
Hardin recommended regulating rights to prevent overgrazing of land, but this is just as easily applied to the oceans, overfishing and depletion of stock. Pigou however, went further and advised penalizing those who created 'negative externalities' such as overfishing or pollution, and supporting or subsidising those who created positive externalities; those who clean up, or benefit the environment. Negative externalities are costs put onto another by one actor for which no compensation is paid (OU) as in the Deepwater Horizon Spill. Insufficient compensation was available for the public who demanded reparation for damages to businesses, property and the environment.
