Assigning a precise economic value to a non-market ecosystem service or environmental externality that damages an ecosystem or human health and welfare is challenging. However, if we tie fairness and equity to getting the “prices” exactly right, the best will become the enemy of the good and we will sacrifice ecosystem services on the alter of excessive exactness. In terms of equity and ecosystem services, the precision of any particular monetized value is less important than that there be a value, and that the value is incorporated into legal and policy decisions. Existing legal models and institutional frameworks were not designed to incorporate ecosystem or environmental externality values into legal decision-making, other than by using the implicit (and wrong) presumption that the value of ecosystems or environmental externalities is exactly $0.00. We must rethink our legal paradigms so that environmental valuation is integrated into routine decision-making.

Environmental equity requires careful consideration of who bears the risk of uncertainty. One possible approach is to link ecosystem valuation to risk and uncertainty by imposing financial consequences on projects proportionate to the ecosystem values at stake. To do so, we can adapt risk allocation instruments and approaches routinely used in commercial and financial transactions, such as surety bonds and secured assets, to protect the value of ecosystems and reduce harm from environmental externalities. This paper will examine ecosystem value-based risk shifting in two case studies: ecosystem valuation in environmental impact assessments, and least-cost energy decision-making.