Putting a price tag on nature

Written by adam


The L.A. Times published an interesting if somewhat odd piece in last week’s magazine about efforts to coax the business community into loving the environment by assigning a dollar value to our natural resources, or “ecosystem services.”

So, for example, we learn that dung beetles provide $380 million of waste management services to the U.S. cattle industry. One mile of coastal wetland provides $2.4 million of storm protection. A nice fern is worth $4, or you can get 3 for $9.99.

I made up the last one.

The odd part of the article is that it wraps together these efforts to place a concrete value on natural resources with a very different phenomenon: the use of pollution markets to curtail environmentally damaging activities.

Superficially, the two concepts seem similar. They both involve pricing, profit motives, and payments as a means to promote conservation. Less superficially, though, they are mirror opposites.

The “ecosystems services” approach represents an attempt to uncover the intrinsic worth of a particular corner of nature. This stretch of wetland is valuable because without it we’d have to pay however much in storm damages. That population of bees is valuable because without it farmers would have to find alternative ways to pollinate their crops. In theory, quantifying this intrinsic value is a pathway to convincing interested parties that ecology is worth paying for.

Pollution markets — whether for carbon or sulfur dioxide or whatever — are quite a bit different. A pollution market is an attempt to assign a cost, rather than a value, to a particular activity we don’t like. These markets are just an exotic form of taxation, and there’s nothing intrinsic about the dollar values. Politicians set it at whatever level is deemed necessary to discourage the activity in question.

The L.A. Times piece spends a lot of time hand wringing over what this mercantile approach to conservation means for the soul of the environmental movement, but the basic confusion between ecosystem services and pollution markets muddies the questions the author is trying to pose. Assigning a dollar value to wetlands may raise thorny philosophical questions about our relation to nature. Taxing polluters does not.

And even though I have my doubts about the general applicability of the ecosystems services approach to conservation, I admit I don’t find the proposed alternative — an appeal to our innate sense of ethical obligation toward nature — hugely compelling either:

The essence of the conventional and by-now-familiar ethic goes something like this: Because nature is of inherent and infinite value, humans have a moral obligation not to trash it. In the abstract, this resonates with most reasonable people; tree-huggers or not, we generally agree that littering is uncool, and a sense of right and wrong does influence many people’s relationship to the natural world.

This would be nice if it were true, but my experience is that in most parts of the world, littering is in no way seen as “uncool,” and even in America the change in attitude is recent and far from complete. The ethic is certainly a worthy ideal, but by itself it isn’t going to carry the day. As always, environmental preservation will require a canny blend of appeals to both our moral sense and our sense of self interest. And, of course, a healthy dose of coercion in the form of taxation and regulation.

This article is cross-posted from Grist. I know there’s overlap in our readership, but I suspect that enough people only read one blog or the other that it’s worthwhile to post in both places. Let me know in comments if you feel otherwise.

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