Can you put a Price on Nature?

I recently listened to a podcast that posed a very interesting concept – something I’ve never considered but listening to the logic behind it gave me pause for thought. The concept is this – if we are to save nature we must, as a society, put a price on it.

My first reaction to this was outrage – how dare economists suggest that you must put a price on nature, is nothing sacred? Many environmentalists feel this way and there is a compelling argument for appreciating and protecting nature for nature’s sake not for selfish economic gains.

However, as we know, money is a compelling force for everyone from the farmer trying to eke out a living and keep his family alive by rearing cattle on tracts of the Amazon rainforest cleared for agriculture right up to multinational multimillion dollar corporations who are chasing more profit whatever the moral cost. How do you convince a society with such a short term view, whether they are Individuals focused on making enough money to put dinner on the table for their family or companies showing how profits have increased in order to satisfy shareholders.

‘Rarely will the money to be made by protecting nature match the money to be made by destroying it. Nature offers low rates of return by comparison to other investment’ (1)

The quote above outlines the thinking of most; quick money is not to be made by protecting nature. This is a fact, however there is a train of thought that is coming to the fore that demands due consideration. This is ‘without nature the economy is nothing’ (2) and this is the concept that may prevail in the constant struggle to stop things such as deforestation in the name of agriculture and pollution through large scale industry.

Economists have been working on attaching a monetary value to nature since the 1960s (3) and in 1997, a team of scientists calculated a dollar value of every ecosystem on the planet and at that time it amounted to 142.7 trillion dollars (4); that’s a hard sum to ignore. Without going into the intricate details of how these figures are calculated (I’m no economist!) I’ll outline an example of what these calculations can be distilled down to; let’s take the example of bees. The majority of our horticultural crops require pollination by bees (and other insects) to be successful. In short without the help of bees, we would not be able to feed humans. So what does this mean in terms of the food grown, harvested and the profit made by farmers and corporations? In direct financial terms: the first attempt at a global value for insect pollination, nearly 20 years ago, came up with a figure of $116bn (£76bn) annually. Surely if there is a monetary value attached to what nature provides us, and such a large one at that, protecting it cannot be ignored.

So how would this work in real terms? You can assign a value to these things but – the farmer still needs to be paid, the corporations still want to show their shareholders profits. How do we turn the monetary value assigned in theory to something that will assist with nature conservation?

One proposal put forward is the concept of ECO-currency (6) which would, in theory, bridge the gap between economics and the environment. An article written by Next Nature Network in 2010 illustrated the idea with the real-life example of Alberto, a Brazilian farmer. Alberto cuts trees in the rainforest, sells the wood and transforms the soil into agricultural farm land. By doing this he makes money to buy food and goods for his family. Obviously, the huge downside of doing this is further destruction of the Brazilian rainforest. Some may say that it’s this farmer’s moral obligation not to destroy the environment. However, particularly for people from industrialized developed countries, it’s hypocritical to expect this farmer to put his livelihood and chance of survival on the line, when the industrial revolution did exactly the same thing to our natural environment at the turn of the century. Searching for ways to economically compensate the farmer to leave the rain forest untouched would be a more helpful and understanding way to tackle this issue.

The ECO Currency project explores the idea of introducing a separate currency for environmental value. For the case of Alberto, this would mean his piece of uncut rainforest would have a certain value in ECOs, and rather than cutting down the trees and to earn money, he could decide to actively steward his piece of rainforest, protect the trees and earn ECOs. The ECOs could be traded for real money, goods and economical benefit for his family. It is proposed that the funding could come from a tiny tax on the financial system, or banks. A tax as low as 0.005 per cent when levied on the funds flowing round the global finance system every day has the power to raise hundreds of billions every year (6).

In answer to the question, can we put a price on nature, I think it’s clear – yes we can. Should we put a price on nature? This is hotly debated and it’s a debate worth having; exhausting all possibilities in the name of trying to work out the best way of protecting our environment is of utmost importance. This may be the idea that’s worth considering.

Kate Goodall

When it comes to trying to put a price on nature, there is one main element that seems problematic to me. It seems, to me, to be the equivalent of attempting to put a price on the existence of value. While environment, as a word, is used for many meanings it essentially describes the context of something. Our environment is the context in which we live and get to have the concept of an economy in the first place. As soon put an economic value on the air we breathe or the sun. There’s no point. Every material item in our economy is in some way directly derived from or obtained using the sun. Fossil fuels hold energy that was obtained from the sun, crops grow from its light, not to mention that the earth would not even have formed without it, much less be warm enough to inhabit. So we don’t try to put a monetary value on it because it would be a pointless exercise. It would remain ubiquitous and people would continue to take it for granted. After all, you can’t remain in a state of awe all of the time.

So why is it okay to try to do this with the planet that we live on? It is obvious that it is impossible to avoid doing so to some extent. When trying to decide where we can build houses, choosing whether or not to extract resources and use them to improve living standards or similar, we have to strike a balance in order to avoid being paralysed by indecision. However, the idea that this ecosystem or that ecosystem is worth £X per year is insufficient. Trying to isolate elements of nature and then pricing them in a sort of bizarre taxonomy neglects the complexity of the planet’s biogeochemistry and how it is inextricably a part of everything that we do.

Joshua Keys

References

The Guardian (2012) Putting a price on the rivers and rain diminishes us all. http://www.theguardian.com/commentisfree/2012/aug/06/price-rivers-rain-greatest-privatisation
The Guardian (2012) We must put a price on nature if we are going to save it. http://www.theguardian.com/environment/2012/aug/10/nature-economic-value-campaign
Nature (International Weekly Journal of Science) 2009 Biodiversity: Putting a price on nature. http://www.nature.com/news/2009/091118/full/462270a.html
Radiolab, Season 13, Episode 3. (2015) Worth. http://www.radiolab.org/story/worth/
The Independent (2015) Nature Studies: Is it possible to put a price on nature? And if we can, should we? http://www.independent.co.uk/voices/is-it-possible-to-put-a-price-on-nature-and-if-we-can-should-we-a6736821.html
Next Nature Network (2010) ECO Currency – A Proposal to Balance Economical and Environmental Value https://www.nextnature.net/2010/05/eco-currency-%E2%80%93-a-proposal-to-balance-economical-and-environmental-value/