Andreas Späth

Putting a market value on nature

2014-07-08 07:42

Andreas Wilson-Späth

In 1997, a group of scientists published a paper in which they attempted to calculate the economic value of the entire biosphere and came up with the staggering sum of US$ 33 trillion per year (about US$48.7 trillion in today’s dollars), which, at the time, they predicted to be a gross underestimation of the real amount.

The same group recently revisited their computations using additional data and a better understanding of the systems involved, and they’ve conjured up a new estimate: US$142.7 trillion per year (in today’s dollars) – well over twice the total gross national product of all of the countries in the world added together.

To put this into a bit more context, if humans had to pay nature for the services it provides us with – services without which we would not be able to survive on this planet at all – we’d have to fork out US$142.7 trillion in hard cash every year.

In making their calculations, the researchers considered a range of ecosystem goods and services that directly or indirectly contribute to human wellbeing. Here are some examples:

- providing the raw materials and genetic resources, from lumber to medicinal plants, necessary to keep our industries going;

- regulating the CO2-O2 balance of the air we breathe;

- providing the water (from rivers, aquifers, watersheds, etc.) we need for consumption, agriculture, transportation, industry and so on;

- producing fertile soils;

- processing organic waste;

- sustaining a livable climate by maintaining a balance of atmospheric greenhouse gasses;

- producing food;

- providing cultural and recreational space; and

- pollinating flowering plants.

Explaining the rationale behind doing this work, the researchers assert that in providing us with raw materials and essential services, nature is an integral part of the human economy, but that it is very rarely considered as such in market transactions.

They believe that many government and corporate policy decisions that would otherwise be detrimental to the ecosphere could be changed for the better if an economic value was assigned to the affected natural resources.

A number of critics have questioned the approach as leading to a commodification of nature. They’ve described it as anthropocentric, questioned the methods it used and charged that it “promotes an exploitative human-nature relationship”.

They’ve also argued that the calculations ignore the fact that some ecosystem “services” are actually bad for humans – wild animals kill people, storms destroy property and wetlands harbor diseases, for instance.

The authors have defended their work saying that “expressing the value of ecosystem services in monetary units does not mean that they should be treated as private commodities that can be traded in private markets”. Instead, they believe it is a useful way of raising awareness and a way of communicating with a broad audience in terms that they understand and which will lead them to make better decisions.

Personally, while I agree that putting a dollar value on nature does covey in a very graphic way just how much we depend on it, I do have a lot of time for the perspective of Douglas McCauley, one of the main opponents of this market-oriented approach to conservation, who thinks that it’s “disingenuous and dangerous”.

He asserts that morality, ethics and aesthetics should be our primary motivations for conservation: that “nature has an intrinsic value that makes it priceless,” and that “this is reason enough to protect it”.

What do you think?

- Andreas is a freelance writer with a PhD in geochemistry. Follow him on Twitter: @Andreas_Spath
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