Can we calculate the value of nature like we value economic output? Do you think this approach will help protect the world’s natural resources, for example by altering attitudes to sustainable development?
Your questions and comments formed an important part of the debate at the Natural History Museum held on 25 January 2012, where a panel of experts discussed the issues. You can watch a video of the debate recorded on the night.
It sounds like it's possible, at least for certain services. But how widely the approach can be applied is a different issue.
I'd be interested to know how the TEEB project came up with the figure of '153 billion Euros per year' for the cost of crop pollination by bees and other insects.
One of the approaches to ecosystem services evauluation its to say how much would it cost if these services were not there and people had to do it instead? In some parts of China because of insecticide regeims this is actually happening - cherry trees being hand-pollinated to ensure fruiting - huge costs in manual labour which are quite unfeasible in western terms.
Similary maintaining a clean water supply to New York was looked at by asking the cost of the cleaning plant to purify the water mechanically. They found it would have cost more than 10x the cost of keeping the watershed of the Catskill Mountains in good shape and letting nature - the tree cover - do the job. New York put its investment in keeping the environment in good order - it made sound economic sence. The same applies for bee pollination estimates, when you look at the area of croplands which insects polinate, take a baseline cost on what you would have to pay for this to pollinate by another means, or look at the losses that would ensue if these natural bee pollination services were not avaialbe and crops failed as a result.
Jonny, I think I was of the same view - very sceptical. However I realised when no value was applied nature was abused. Take rainforest, if its only percieved value is as cut timber or cleared land for agriculture then is has no chance against market forces which favour the latter. However if there is a valuation on the forest's ability to feed, fuel, provision, shelter and medicate local communities; to provide clean air and water; to be part of the production of nutrients for soil fertility; and especially to sequester carbon and help mitigate carbon emissions - then the perspective changes. Actually when you add up these tangible benfits they exceed the profit of the alternative use options - and governments in particular begin to understand the value of the asset that is being lost. Then there are the tourism benfits of keeping forests as special places for people to go to - in many countries this is a major part of their foreign exchange earnings.
Non of this takes away from the fact that the forest has intangble benfits, they are beautiful, they are places where other species have their lives, they are places with a spiritual responance for the cultures of indigenous people etc. So these are value-added in this context. Interestingly there is also increasing evidence of how green places also directly improve people's wellbeing, emotionally and psychologically - relieving stress and helping people's health. This too is being looked at in terms of how this impacts on and offsets the costs of national health bills etc.
The key issue for me is that in our very imperfact world the big decisions are made by financiers and by politicians, making money and responding to human needs are the main drivers and 'nature' is way back in third place. What is happening with the ecoystem service accounting approach is that it is moving the spotlight. At an international level for example there is the realisation that all the aspirations for climate managment or for green and equitable sustainable develoment will come to nothing unless the underpinning natural ecostem services are restored, maintained and enhanced. Its not an either or situation, if we dont take care of nature it wont take care of us - and humans will fare very badly as a result. What we need increasingly is economic and political strategies which recognise this and respond to it for the sake of people and the planet.
Using ecosystem services as the justification for protecting the natural world is, as other commentators have said, an effective short term tool to get politicians and decision makers on board. However I believe that it's ultimately short-sighted, and reinforces the consumer culture that has got us in this mess in the first place.
If we view nature as a commodity it's value can not only go up, but down, just as every other commodity does. However unlike other commodities if the price crashes and we lose some of our assets - habitats and species - we won't be able to get them back any time soon.
What is a green economy?
I've heard the term 'green economy' bandied around a lot lately. I'm sure if you speak to different people it will mean different things. For instance, if you ask an economist they might look at the number of people employed in green jobs in the environment sector. This is not straight forward as this sector includes industries that ultimately take from nature, like some energy companies. A green economy has to benefit nature also. Is there definition out there that we should all be working towards?
The definition of the green economy is still emerging - and we hope by exploring this issue extensively in the Earth Debates we will help this move forward and increase awareness and understanding.
Most simply, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive. Currently, the United Nations Environment Programme (UNEP) defines a green economy as one that ‘results in the improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities’. Growth in income and employment needs to be driven by investments that protect and restore our ecosystems so that their services remain intact for people today and for future generations.
One person's spiritually meaningful may not be so for the next - so arguments on these grounds can be difficult. This doesn't deny there importance and attempts to measure the value of nature do achknowledge these as important considerations without trying to quantify what is very subjective. What we should remember is that more economic value mechanisms are in addition to these other values which are to do with what people hold dear and how we should feel ethically as stewards of the natural world. So efforts to identify economic value need not be at odds with less tangible ways of valuing. How a culture regards a sacred landscape is in addition to the other values which are perhaps more accessible to measuring.
Your other point on pharmacutical benefits is hugely important - our planet's rich biodiversity at a genetic level has huge potential for novel uses for people. This is not just in medicine but is a huge number of other areas too, so as we loose species we loose this potential and this is too our detriment. There are international efforts which try to recognise this - such as focusing conservation efforts in areas of high species diversity. This issue is of huge political interest too - if these genetic resources can be preserved then who benefits - the native people's who have used them traditionally? The developing countries which are being asked by the developed west to protect their forests? The developed world companies that want to exploit these resources in products on the market? This thorny area is known as the Access (to biological/genetic resources) and (who) Benefit Sharing (ABS) issue and is key to sustainable development issues as it is both about protecting natural resources and, where they are exploited, how equitable this is done.
Some really intereting points coming up - I hope these emerge in the debate discussion. Of course we would say that nature is beyond value, but unfortunately that is often not enough to protect it in the real world as it is generally true to say that what we dont value we don't look after.
We can certainly see the spritual and heath value of nature as intrinsic, important and very difficulat to price (economists have tried to price the health value by looking for example at how people enjoy green spaces and how this improves mental wellbeing and cuts down on state medical costs). We can begin to measure the wider value by looking at its many natural services too - for example a forest provides oxygen, filters dirt particles from the air and captures the greenhouse gas carbon dioxide; the forest is a source of food and medicines, timber, fuel and fibre for local communities; the forest cover storeswater and mitigates risks of flood or drought. So when we look at the forest like this we soon see its standing value is greater than its value as cut timber.
So do set some land aside as places of natural beaty or as nature reserves because of its intrinsic value - but that is a relatively small part of nature. If we realise nature does so much more towards our economic wellbeing we will be increasingly prepared to do more to ensure its protection. For example insurance companies are getting more interested because of the costs of increased flood damage where the natural cover has been lost.
An important issue is to descrimintate between the meaning of value and price. Pricing mechanisims could mean that those who exploit nature most have to contribute more to its managment and restoration. This way for example water utility companies (who own much of our uplands) have a vested interest in protecting peat bogs and heather - as these ecosystems store and clean water which goes into reservoirs; this keeps the company's water treatment costs down, and this land management cost become incorporated in water pricing to consumers. Another big example is in carbon markets - where users of fossil fuels pay a price - a carbon tax - to restore and replace forests - which then capture carbon (as well as provide widerl natural service benefits).
Non of this is perfect, but in almost every case studied the value of natural resources, when considered in this way, significantly exceeds them being replaces by single human alternatve use of the land; forests provide more value than oil palm, mangroves provide more value than shrimp farms; forests more value than cattle grazing etc. So valuing and in some cases pricing give decision makers who care for environment a strong line of evidence, and tools to so compel politicians and finaciers to consider looking after our natural resources - nature.
An interesting topic. I gave a talk on this theme at TEDx Yerevan titled, "Redefining Our Economic Systems: Could a Forest Be Worth More Than a Gold Mine?" Here is the TEDx video which I hope will contribute something to this very timely conversation: http://youtu.be/ehpa1BTULVE
Valuation of resources is a useful decision making tool but it is specific to given situations. For a fully-rounded view of the sustainability of an eco-system, lifestyle etc. you also need to consider ecological limits.
I tend to think of limits in terms of budgets - an ecosystem has a "budget" that determines how much disruption it can absorb before falling apart. For example, a rain forest has a specific regeneration rate and it would be best for the logging rate not to exceed this level.
In practice, the budget may be absorbed by a number of developments, each of which were decided upon via a specific price or value judgement. However, each should be made with a view to their contribution to use of the budget.
From a different perspective, you can give yourself a carbon or financial budget and use it to ensure that the various price or value judgements you make don't together exceed the replacement rate of your budget (e.g. monthly wage). If you spent all your annual income in January, you'll be broke the rest of the year or in serious debt very quickly!
Can we "put a price" on family values ? On motherhood ? On community spirit ? On patriotism ? I think not... these are "human institutions", their benefits are often "public goods", they are all VALUED very highly by society, but they have no PRICE because they don't trade in markets, and indeed cannot because their values are either communal or public goods. VALUATION is a human institution too, and it is practised both with AND without using economics. Was economics involved in declaring national parks in UK and the USA over a century ago? No ! Is economics involved when a community in India believes in a "sacred grove" nearby and will give life to defend it ? No! But economics IS the currency of policy today, so estimating the ECONOMIC value of many such 'natural' public goods and services DOES help our politicians make the right choices to defend them.
This debate's title (âCan we put a price on natureâ) unfortunately conjures up a neo-classical, narrow, reductionist view of nature that the several hundred co-authors of TEEB (including myself) are opposed to. TEEB is about bringing the VALUE of ecosystem services into public policy, into local administration, into business strategy, into consumer behaviour. We can do so by always recognizing, sometimes demonstrating, and sometimes (more rarely) capturing the value of nature in the form of payments. Our website www.teebweb.org has links to over a hundred examples. (Or if you're short of time, just spend 14 minutes on my TED talk http://www.ted.com/talks/pavan_sukhdev_what_s_the_price_of_nature.html )
This debate is clearly not about "demeaning" or "commoditizing" nature. So if possible, how about a revised Debate title such as "Valuing Nature" or "Natural Capital : from Theory to Reality"? I know that our popular media & less educated journalists just LOVE the testy mercantilist twang of the phrase âputting a price on natureâ, and they have used it dozens of times since TEEB began. But surely, "NaturePlus" is not just any media ? It is special, it is Natural History Museum, itâs a place where my daughters (and millions of others every year) learnt and still learn about nature. So please can you be different ?
Anyhow, enjoy the debate, warm regards, Pavan Sukhdev (Study Leader, TEEB)
It is great to have this contribution from you Pavan – the Museum very much supports the efforts of TEEB which have made a huge contribution to bringing this thinking into the fore. In fact, we chose the title intending to tease out the very issues you highlight. We hope the debate will encourage exploration of how we can better see the benefits that we receive from nature's services. How do we measure their significance? And how do we better take account of them in the decisions made at all levels in society. And crucially how does this fit into wider aspirations for a greener and more equitable economy?
Nature and all its natural resources are "Priceless", something money cannot buy. The non-renewable resources, if once exhausted cannout be found and brought back even if the entire world economy stood up and pooled in together. So what is really needed to "Pool-In", all the possible efforts to save Nature and Protect its' natural resources from exhausting. We need to formulate our knowledge into wisdom and we need to act now.
This Generation has to make the sensible choice to preserve this priceless treasure for the future generations...rather feel sorry about the situation we are already in...
Earth Charter International Youth Group Country Activator- UAE
Ambassador Cosmo Foundation- India
Student Member Emirates Environmental Group Dubai
Student The Millennium School Dubai UAE
The question should be: can we put a value on nature? This would guide us to discuss the differences between price and value. If it is taken for granted that value means price, the discussion is by default in the spider's web of 'market valuation'. A very different perspective comes up if look first at the nature of value. The basic question turns to: is every value a monetary value? Please, mind the gap.
An interesting debate, perhaps the most important question being the last one put by a member of the audience, concerning the acceptance of there being environmental limits to our use of resources.
In simple terms, I take this to mean that all of us in the industrialised world need to reduce consumption. And we all know that there is a great deal of 'fat' to be trimmed from our current lifestyles. But this is going to be the hardest 'sell' to the policy makers of Governments and corporations, our current economies being entirely based on consumerism.
I have some optimism that it can more easily be sold to the consumer - a positive case can indeed be made for quality of life over consumption. So this might be an area where we work for change despite the policy makers and their short-term search for the environmentally impossible - 'sustainable economic growth' for parts of the world that are already way beyond their (and other's) environmental limits.
While accepting that 'business-as-usual' is no longer an option, I did think the panel seemed uncomfortable at addressing this central issue. We can design all sorts of strategies for managing resources, while alleviating inequalities and protecting the environment, many of which I would accept as being tactically necessary. But we must not forget the issue closest to home - WE NEED TO USE LESS STUFF.
There are estimates that 1/3 of all food produced for people on this planet is wasted post-harvest. Similar issus apply to other products - such as water - are equally poorly managed. So a significant part of being beyond our planetary boundaries is simply because we are so inefficient and wasteful - this has been allowed in the past - but now as we value these resources and see the consequences of being profligate we will have to change (and business are perhaps seeig that by beng ore efficient they wil have an edge). It has been suggested that all the world's poor could be lifted out of undernourishment if just 25% of this wastage was actually recovered.
So in this respect the developed world could be making dramatic leaps forward by being more efficient and cutting down on waste. In the developing nations technology transfer countries could make a dramatic impact on peoples wellbeing and at the same time they may joise avoid some of our worst mistakes. In this respect we would be making dramatic steps to wards living within our planary boundaries - without it necessarily meaning a hugh change of quality of life, Quite the contrary it could dramatically imporve our wellbeing - but we do have to work hard for this vision to be better understood.
The distinction (I think!) between thinking in terms of value compared to limits and resource use is fundamental. A resource may be "the Brazilian rainforest" or "fresh water" or "rare earths", which can either be valued or assessed in terms of limits and sustainable usage (budgets).
As I mention in my post above, I think they are different ways of tackling the problem. You need different information in each case and the meaning for the person/organisation making decisions is quite different.
A great, short talk on the topic that's well worth a watch: "The Economy, It's Nature's Business" by Eva Zabey, WBCSD, is online here: http://www.youtube.com/watch?v=OwQOej5_Euo. Eva argues that we should use the economyï»¿ to guard the environment as part of the way we work it. She talks about how the services provided by natural ecosystems are not accounted for in today’s economy because they’re not appropriately valued and yet we all depend on them. And she urges that it's time to get better doing the maths necessary to value ecosystem services and make informed decisions, concluding "Environment versus the economy is so passé. It’s environment in the economy!"