A Critical Appraisal of the Role of Benefit Transfer in Valuing Environmental Degradation Within the ISEW Framework

The Index of Sustainable Economic Welfare (ISEW) aims to provide a more accurate representation of societal well-being by adjusting traditional economic indicators to reflect environmental and social costs. A critical component of the ISEW is the valuation of environmental degradation, which is frequently conducted through benefit transfer (BT) methods due to constraints on data and resources. This paper examines the role of benefit transfer in estimating environmental costs within the ISEW framework, evaluating its strengths, limitations and methodological implications. While BT allows for broader application and comparability across regions, it often raises concerns about context sensitivity, accuracy and transfer errors. The paper reviews current practices, highlights case examples and proposes improvements through meta-analytic techniques and context-specific adjustments. Ultimately, it argues that while benefit transfer is a pragmatic tool, its application in ISEW requires rigorous methodological standards to ensure transparency, relevance and policy usefulness in measuring sustainable economic welfare.