Vesiarvo

Vesiarvo, or the value of water, is a concept used in environmental economics and water resource management to describe the value attached to freshwater resources in a particular context. It encompasses direct-use values (such as drinking water, industrial use, irrigation), indirect-use values (ecological functioning, habitat provision, flood regulation, water quality), and non-use values (existence, bequest, and option values). The aim of estimating vesiarvo is to inform decisions about water-related investments, tariffs, and policy in a way that reflects both economic costs and ecological and social benefits.

Valuation is typically performed with non-market valuation methods, such as contingent valuation or choice experiments, complemented by market-based price signals and ecosystem service assessments. The resulting estimates can feed into cost-benefit analyses, budgeting for water infrastructure, and prioritization of river basin or regional planning. Applications include municipal water supply pricing, wastewater treatment investments, hydropower planning, agricultural water management, and recreational planning.

In policy contexts, vesiarvo is linked to broader environmental and water policy objectives, including the European Union's Water Framework Directive, which emphasizes sustainable use and the maintenance of ecological status. Methodological challenges include capturing non-market and cultural values, data scarcity, transferability across regions, and uncertainties in discounting and aggregation. Despite these challenges, vesiarvo serves as a useful concept for integrating economic, ecological, and social considerations in water resource decision-making. The term is used in Finnish-language research and policy discussions and is increasingly employed in multidisciplinary analyses of water resources.