One of the reasons that sustainability measures can be so easily sidelined in our efforts of prioritization is that value of the contributions of natural systems or the liabilities of their predicted absence never factor into the bottom lines of our society. In a culture of buying and selling products, natural capital rarely makes it to the balance sheet. The proposal of trying to effectively “price” the natural world offers an interesting solution to our unfettered assault on environmental assets, but even if it were ever enacted it is unlikely to have significant long term affects on how we live. Trying to commoditize the natural environment only tries to describe it within the confines of a limited language. The fact is that the natural environment has no finite value, but instead is uncompromisingly essential.
I was pointed in the direction of an interesting article in the Boston Globe, written by Rebecca Tuhus-Dubrow, that comments on new efforts to represent natural, environmental systems in monetary terms. The theory is that “hard numbers will resonate more than odes to Mother Earth—that dollar figures will allow people to better understand their own reliance on natural goods and services.” The result would be natural assets known as Ecosystem Services. One cited example was tagging the Hawaiian coral reefs at $360 million of economic value to the surrounding communities. On the surface the practice has some merit.
Baked into these figures is not only the monetary benefits of things like tourism spending and land values, but also the “ecological services” that different ecosystems provide. Things like clean air and clean water are things that have translations into consumer market value so water purification could be part of the assets that are tallied on the balance sheet of a natural wetlands. Without a doubt, most of the environmental remediation and filtration done on the planet is conducted not by human-driven, industrial processes, but by nature itself.
Similar to the cap-and-trade mentality of affixing a price to carbon, giving dollar amounts to our lakes, forests and mountains could help quantify the value that is being sacrificed when these features are degraded or compromised. I often argue that the only reason coal power is perceived as inexpensive is due to the fact that the secondary effects of making coal power possible are never factored into its per kilowatt-hour price. When the natural costs of its extraction and transport are combined with those of health care, acid rain, water pollution and environmental clean-up (all of which we ultimately pay for) the real price of coal power could be much less attractive. These price tags could help bolster the methods of conservation employed by environmentalists that have failed to gain traction. The article notes one quote by biology professor Gretchen Daily of the Natural Capital Project saying, “Conservation, using traditional approaches, is utterly doomed to fail.”
Pricing that Which is Not For Sale
Despite the alluring qualities of the idea, it was not long before I found an unsettling feeling and came to two quick problems with this direction. I was pleased to see that the article came to the same result, or at least touched on them as daunting challenges.
The first is that the entire mentality reeks of the misdirected ethos that we are slowly “mastering” nature, as if we have even begun to understand the complexities of natural ecosystems enough to catalog their parts and rate their worth relative to how many Big Macs they could buy. One quote in the article all but jumped off the page at me:
“We benefit from nature not by preserving it, but by ‘improving’ it—for example, by plowing a field, building a road, constructing a home, drilling a well, damming a river, farming a salmon or oyster, or altering a genome.”
– Mark Sagoff, Director of Public Policy, George Mason University
This has to be one of the craziest things I have heard in a while. I think Mr. Sagoff is very clear on how we benefit from harvesting nature’s resources, but has no way to explain how we are “improving” nature as a result. Natural systems do not function better as a result of any of those actions–on the contrary, most result in the opposite. This is the same realm of thinking that leads to visions of Geoengineering and stepping behind the wheel of nature in order to drive it in a more positive direction. Given how many mysteries there still are in just functioning of our own bodies, I find it astounding that anyone can think that we have conquered the puzzles of nature’s workings. If we still have so much to learn about the natural world, how suited are we to try to put price points on its components?
My second problem is that affixing a price, however high, to a natural resource is creating a point where it would be theoretically valuable to cash in and sell it off for a greater opportunity. Clearly places like Dubai (the nemesis of sustainability) provide case and point for this brand of capitalist thinking. If a giant floating casino complex could be created off the coast of Hawaii to bring in $450 million a year would that be worth decimating their coral reefs valued at a paltry $360 million/year? Good business sense would say so, but common sense would point in the opposite direction.
As far as I am concerned, trying to weigh the natural environment in dollars and cents is like trying to ascribe a price to democracy. I imagine some dedicated souls could try and postulate the American premium of being a democracy instead of a dictatorship, but whatever number they come up with would be irrelevant because democracy is not for sale at any price. Similarly, clean drinking water has a market value and we could tabulate it’s cost at all parts of the globe and multiple it by its natural quantity, but the fact remains that there is no price that would make the depletion of the earth’s drinking water an acceptable “transaction” for our race.
The same goes for the rest of the natural world. The dollar value has relatively little meaning given that its very existence is trying to represent something unquantifiable. What is the difference between saying that the annual value of all the natural capital in the world is $33 trillion vs. $35 trillion? Both try to convey that environmental systems are really, really valuable, but both are wrong. Nature isn’t valuable, it’s invaluable.
I am willing to entertain these tactics as a temporary stopgap for the time being if they help to convey the degree of value that natural systems hold to a wider population, but ultimately I still think they fall short of a real answer. The message to more people should be how these systems are inherently interconnected to us and essential to how we live; non-negotiable in a way that no currency can adequately represent.
April 12, 2011 at 12:34 pm
I think you are right that the trend of quantifying “ecosystem services” etc is interesting but probably not that influential when it comes to non-monetized outcomes. When you look at the major historical advances in conservation (National Park Systems, Wilderness Area designations…) it was done without a monetary valuation. Economics as a driver of conservation is currently most effective in the sense that many businesses have discovered that systematically describing and optimizing something like their carbon footprint can also improve their bottom line (e.g. BASF’s Eco-Efficiency Analysis, or Wal-Mart’s various efficiency efforts…).
April 12, 2011 at 4:27 pm
Definitely, Steve. I actually think those kind of operations-based efficiency measures that bring monetary savings are also a temporary phenomenon. As standards and codes become more stringent (in some cases for the first time in decades) we are going to continually close the gap of opportunity costs for upgrading to a more efficient model.
Part of me feels like even the term “conservation” is misleading in how these natural systems need to be viewed, at least in our current cultural connotations. I think environmental conservation is often seen as setting something aside, denying it from “development”, in an effort to save it for the sake of enjoyment or appreciation. In reality, it is more like maintenance or upkeep that avoids decreasing the size and efficiency of these ecosystems to the point that they can no longer function.