It should be possible to design global economic systems that provide life’s necessities without wrecking the planet. Currently, economies ignore nature and the services it provides, so habitats are degraded, air and water poisoned, and the incredible diversity of animals and plants around the world is diminished on a daily basis. 2010 is the International Year of Biodiversity, yet the world’s economic powerhouses continue to roar onward even as enlightened governments admit failure in their goals for species’ conservation.
Could giving nature an actual economic value make a difference? A United Nations-backed team working on this issue since the 2007 G8 summit in Potsdam, Germany, believes that it could. According to Mainstreaming the Economics of Nature, the last of a series of reports from the TEEB (The Economics of Ecosystems and Biodiversity) initiative, a faulty economic compass has led to decisions that go against both our current well-being and that of future generations. The degradation of the planet is a result of our collective failure to incorporate the value of ecosystem services and biodiversity, or “natural capital”, into economic decision-making.
Since no concrete value is assigned to natural capital in the world market, it has been treated as worthless, with zero price. This leads to false trade-offs. For example, valuable wetlands that provide fresh water, fish and wildlife habitat, flood control, and so on, get filled in for housing and industrial developments which have a lower public benefit. Biodiversity is a critical factor in life on Earth, exemplified by the bees, butterflies, birds, and bats that pollinate our food crops and flowering plants. What would the world look like without them? As TEEB reports, “risk of extinctions are growing, natural habitats are being lost, degraded and fragmented, and drivers of biodiversity loss are constant or intensifying”. By putting specific values on every ecosystem, and factoring it into the cost of land and resources, a totally new economy would emerge.
This process has started and attempts are increasingly being made to quantify the value of natural capital at the local level. According to a new report from the Pacific Parklands Foundation and David Suzuki Foundation, a preliminary assessment of the Lower Mainland’s natural capital gives it an annual value of $5.4 billion, or nearly $3,900 per hectare. The study only assessed terrestrial environments and was not able to include the marine and intertidal environments that are so rich in biodiversity, nor the ecosystem service values of flood protection and carbon sequestration on farmland. Nonetheless, these numbers give a clue to the size of the overlooked natural economy.
It sounds convincing, but there is something rather scary about the concept. How can one put a value (and therefore a price) on the peace one experiences high on a mountain peak or the pleasure in watching an eagle soar? If nature has a price, can it be devalued or sold to the highest bidder? There are many values that nature holds for humans, encompassing our spiritual, emotional, cultural, and recreational needs, as well as values associated with physical and mental health and well-being. These values are impossible to pin down in financial terms. Numbers are always based on measurements and underlying assumptions that may have questionable validity. Having put a value on nature, will some unrecognized or unpopular ecological attributes be considered “not worth the price”?
Despite these reservations, it makes sense to incorporate the “externalities” of ecosystem services and biodiversity into economic calculations at a broad level. Such accounting already informs some jurisdictions in surprising ways. By protecting the Catskill Mountains watershed, New York City saved itself millions of dollars on a new water treatment plant. Natural capital accounting should become a standard part of business models, creating a structure for accountability and liability. The change of thinking will not be without upheaval and difficulties, but given that the annual global loss of habitat is equivalent to $250 billion a year, a natural capital deficit that must be addressed, it is the only viable way forward. The world’s ecosystem goods and services have been calculated to be anywhere from $18 trillion to $61 trillion, an amount comparable to the global economy. Putting nature at the heart of this economy encourages an appreciation of our planet’s limited resources and how they can be shared, enjoyed, and conserved in a mutually supportive manner.
Anne Murray is a naturalist and the author of two books on Lower Mainland nature and ecological history—Tracing Our Past: A Heritage Guide to Boundary Bay and A Nature Guide to Boundary Bay.