It’s been a big week in the battle to put a price tag on nature. The Dasgupta Review, commissioned by the British Government to assess the economics of biodiversity worldwide, came out to mixed reviews on Monday.
Some saw it as a welcome push in the effort to include the importance of biodiversity into our current economic systems. Others saw it as a fundamentally dangerous exercise in the commodification of nature.
Whether valuing biodiversity in monetary terms and giving a dollar amount to the benefits that we get from healthy, biodiverse ecosystems is a good idea, or not, is a complex and polarising issue. But whenever an issue is complex and polarising, it’s important to look at the perspectives of both sides of the argument.
Here is a concise, bullet-pointed list of some of the key arguments commonly used for and against putting a price-tag on nature–something often referred to as the “natural capital” approach.
Pros
- Pointing out the economic value of nature’s benefits helps remind people what we stand to lose when we ravage ecosystems— “ecosystem services” like flood control, water filtration, carbon sequestration, and species habitat.
- By appreciating that nature has tangible financial values, it is possible to get the attention of people who usually only regard nature as a supplier of resources, or worse, a barrier to economic growth.
- Showing that our economies are bounded in nature and connected to the health of the biosphere can help begin a fundamental rewiring of how capital is invested, how institutions are governed, and what people consume.
- Biodiversity and many intact ecosystems overwhelmingly happen in poorer areas, where it is often people who end up paying the price of conservation. Valuing the benefits coming from nature could help see a new transfer of money towards places and people who are asked to enact environmental policies on their land.
- Properly valuing the benefits of nature can help build arguments for investing in so-called “nature-based solutions.” For instance, in the Colombian Andes, scientists have shown that it’s 16x cheaper to invest in restoring native forests as a means of preventing landslide than it is to pay for repairing damaged infrastructure. Valuing nature’s benefits can mean it “makes financial sense” to save and recover wild areas.
Anti
- It’s impossible to value all of the benefits provided by nature. Many of these benefits are not simple to quantify, or go only to certain actors and not others.
- Giving a market value to nature’s benefits could “crowd out” motivations for defending nature because of its intrinsic worth.
- The natural capital approach is tinkering with the current economic system by attempting to ascribe capital values to environmental services. But what’s really needed is a larger overhaul of the current system.
- A failure to appreciate the diversity of benefits provided by different ecosystems could see policies that promote only a hollow fascimile of nature. For instance, if we think of forests mainly as carbon banks, why not simply invest in planting lots of fast-growing monoculture timber plantations, instead of recovering a native ecosystem?
- Knowing the market value of something, such as the coastal protection provided by mangroves, isn’t neccarily an impetus to protect mangroves from destruction–so long as somebody is still benefitting from that destruction.
An orchid thought experiment
Of course, what matters at the end of the day are not arguments but evidence. Whether incorporating the economic value of biodiversity into our systems helps or hinders conservation efforts is a fundamentally empirical question, open to the bulwark of scientific scrutiny.
Understanding opposing viewpoints is an excellent starting point, but what counts when all is said and done is not so much what people think, but what actually happens out in the real world. What are the measurable consequences of the so-called “natural capital” approach, where does it work, how well, for whom, and compared to which alternative?
For what it’s worth, my two pennies fall more on the side that valuing nature in monetary terms is, for now, a good idea. Most people, particularly those who tend to find themselves in charge, have no idea of the intrinsic value of walking through a rainforest, or diving on a coral reef. But everybody–and particularly those who tend to find themselves in charge–have some inkling of the value of money.
With our systems currently so blind to the true costs of degrading nature, I think that any attempt to tip that balance back in favour of nature is probably a good idea–and that giving economic value to nature’s benefits could be one way of achieving that.
But of course there are dangers to valuing nature only insofar as it proves useful to humans.
Novotny and Molem recently framed these dangers particularly well in a thought experiment they formulated following the recent discovery that New Guinea has the richest island flora of anywhere on Earth. Commenting on a recently compiled list of 13,634 scientifically described plant species
of the island’s flora (of which 68% are known to occur only on New Guinea!) they say:
One in five plant species on the list is an orchid, and, with 2,856 species, the Orchidaceae family is more diverse than the next seven-largest plant families combined…If, in a thought experiment, we imagine that all the orchids in New Guinea, with their low biomass, low number of associated herbivores, and specialized pollinators, were suddenly to disappear, the effect on most ecosystem functions would probably be rather limited, despite the loss of 21% of the island’s floral diversity. This is a cautionary tale against justifying biodiversity conservation in utilitarian terms, by ecosystem services, including carbon capture.
ADD ON: This recent summary of the Dasgupta review is well worth a read:
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