Nature: give it a right or put a price on it?

14 June 2011 by

A recent guest post from Begonia Filgueira celebrated the move by the Bolivian Parliament to accord rights in law to Nature. It rightly commanded considerable attention but not all readers were ecstatic. So when last week DEFRA came out with a rather different approach to valuing nature in its Natural Environment White Paper – the first in 20 years – it was interesting to see the way that the Environment Department thought things should be done.

Not the Bolivian route, unsurprisingly, but the White Paper raises an entirely different way of valuing nature which we should compare with the idea of granting rights.

The White Paper made the perfectly sensible point that policy-making in the past has not properly reflected the effects of development on the environment – “externalities” in economic jargon.

Society has traditionally placed a much higher economic value upon commodities such as food, fuel or minerals than on other services that are equally essential for economic stability and human well-being, such as climate regulation, flood control, water purification and space for relaxation and recreation. para.1.19

 So we need to cost losses caused by impacts on the latter rather than just fixating on the benefits of the former. And if this sounds completely anthropocentric, try this slightly more nuanced passage immediately following:

The degradation of our natural systems entails not only the loss of precious habitats, wildlife, fish populations, landscapes, clean air and water but also the loss of economic value that we could have gained from more sustainable use of the natural environment.

 What does DEFRA suggest? Well, amongst other things, listing “natural capital”, i.e. the stock of physical natural assets which provide flows of services that benefit people “such as pollinating crops, natural hazard protection, climate regulation or the mental health benefits of a walk in the park” – and putting that natural capital “at the heart of government accounting“, whatever that phrase means. Quite what use Osborne and the Treasury will make of these expanded accounts, one wonders. But it is I suppose a bit better than ignoring nature completely.

TEEB: doing the maths

DEFRA’s White Paper does not put much flesh on the bones of this environmental accounting but it does refer to some work done by a group called TEEB (The Economics of Ecosystems and Biodiversity) – financed by the UN Environmental Programme and various governments, including, happily, our own. This is rather more impressive work than the, frankly, somewhat fluffy White Paper. There is a TEEB summary report which draws on some very substantial work aimed at different readerships, and which is a good place to start.

The overall objective of TEEB is to try and cost impacts on biodiversity into decisions made about it. Some of the statistics it calls up are striking indeed.

(1) Halving deforestation rates by 2030 would reduce global greenhouse gas emissions by 1.5 to 2.7 gigatonnes of CO2 thus avoiding losses from climate estimated at a Net Present Value of more than US$ 3.7 trillion (no, that is not a typo – human-induced deforestation accounts for about 12% of global greenhouse gas emissions). And not chopping down trees is one of the cheapest ways of reducing emissions.

(2) The effect of competition between highly subsidised industrial fishing fleets coupled with poor regulation and weak enforcement (TEEB’s words) has led to over-exploitation and a consequent reduction of US$50 billion in the income from global marine fisheries annually.  

(3) Finally, take bees – a single bee colony might only produce US$215 p.a. in direct products but it causes benefits via pollination of fruits and berries worth US$1050 p.a.; Swiss bees are thought to provide pollination worth US$213 million p.a.

The yuck factor

Now, there is an obvious, instinctive and strong response to all this money talk, well summarised in Green Party MP Caroline Lucas’s Guardian post of yesterday:  

Equally, while the economic evaluation of the natural world may be a well-intentioned effort to convince economists and the business community of its importance, putting a price on the environment risks simply commodifying it. Valuing and measuring natural capital in this way, and “developing new markets for ecosystem services” perpetuates the idea that natural resources are simply there to be exploited.

 A response closer to the Bolivian embrace of Mother Nature, but none the worse for that. It identifies a serious problem we have in valuing something many of us think is beyond value.

The White Paper points fleetingly at the non-economic aspects of protecting nature: see para. 1.1. But the TEEB reports grapple with this whole dilemma. If you value something like nature in money terms, do you devalue it? Or do you express it in the only terms which, alas, most of the world’s movers and shakers understand – cash – and, if in the expression, you devalue it somewhat, is it at least better than not valuing it at all?

TEEB acknowledge that it may be unecessary, if not counterproductive, to value things like national parks, because there is enough of a sense of collective heritage about them for this not to be required; but there are many instances where such a valuation exercise is the best way of bringing the wider consequences home to those otherwise blinded by conventional profits and losses.

More questions for our readers to ponder.

A story from Kakadu

Finally, those who have been thinking about ecocide over the last fortnight (here, and here) may be interested in the problems of valuation which arise in the mining and quarrying sectors (p.21 of the summary report) as per the tar sands debate. And the numbers do not always favour the developer. TEEB cite the decision-making process in Australia in the early 1990s, when the choice arose as to whether to mine the Kakadu Conservation Zone or to add it to the adjoining Kakadu National Park in the Northern Territory. A valuation concluded that the Net Present Value of the proposed mine was AUS$ 102 million – lots of money. But another study, based on the figure which people were willing to pay to avoid the damage caused by mining, arrived at the far larger AUS$ 435 million. The mining project did not proceed – though the latter study did not ostensibly form part of the conclsuion.

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1 comment;

  1. John Joliffe says:

    No doubt Caroline Lucas would not sully herself with base lucre. But attributing to nature at least some value (and according to TEEB, considerable value) is almost certainly better than none. It will also draw attention to natural processes like pollination which many people did not know much about.

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