Putting a Price on Nature’s Beauty

In a recent Guardian piece George Monbiot was quite hard on my profession–or rather, on the issue of how politicians use the ideas behind the concept of economic valuation of ecosystems:

As Ronald Reagan remarked, when contemplating the destruction of California’s giant redwoods, “a tree is a tree”. Who, for that matter, would care if the old masters in the National Gallery were replaced by the prints being sold in its shop? In swapping our ancient places for generic clusters of chainstores and generic lines of saplings, the offsetters would also destroy our stories.

While I do not think that economic valuation is useless, an important question implicitly posed by Monbiot is: even if economists know what they’re doing and where the limits of their work are, is it justified to expect that politicians do? To price or not to price: That is the question…

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How and Why: Economic Valuation of Nature

Since I started working on my PhD thesis, I have been asked many times what it is about. I must admit that it is hard for me to explain. First, because attaching price tags to forests or wetlands is not quite something that people expect to be done by scientists. It is strange. Second, because most people do not like the idea. Even if they are not aware of this term, what they fear is going by the name of “commodification” and is a highly controversial topic in scientific literature, including a famous commentary in the prestigious journal Nature by Douglas McCauley, aptly titled Selling Out on Nature. While I do have some answers to the questions and doubts of my friends and relatives, they are too complicated and comprehensive for a casual conversation at the coffee table. Therefore, I decided to write a blog piece about this, at least for those of my friends and relatives who understand English. Continue reading

Getting Prices Right vs. Getting Morals Right

One major justification of my work on the economic valuation of ecosystems is that we need to “get the prices right”. Economists think that factoring the value of ecosystem services into the prices of goods and services traded in markets is one important way of creating incentives to use these ecosystems sustainably. Opponents of the economic approach, however, fear the resulting “commodification of Nature”. Instead, the Douglas McCauleys and Mark Sagoffs of this world suggest that, instead of getting the prices right, we should attempt at getting morals right. In their view, this is the right approach to end the ongoing destruction of Nature, rather than the harmful valuation exercises conducted by economists. Continue reading

Mark Sagoff’s Schizophrenia

I am currently reading The Economy of the Earth by the US-American philosopher Mark Sagoff, one of the more influential critiques of the economic approach to preservation of nature based on its valuation. There is a lot of things in Sagoff’s book I don’t agree with, including a few false analogies, sadly common feature in the economic valuation debate. What has stricken me the most, however, is how Sagoff supports the frequent criticism that economic valuation of environmental public goods conflates the consumer and the citizen – he does it by invoking schizophrenia. Continue reading

Is Some Number Assigned to Nature Better Than No Number?

Imagine the following situation: a 6-year old approaches you holding in his hands a picture – he drew a dolphin. Then you see a number above the dolphin, with an €-sign at its end, and the child tells you that the dolphin costs this amount of money. When you ask him, however: Where does the number come from? Who is to pay this to whom? And what is the expected result of the transaction?, he knows no answer.  This situation is not so much dissimilar from what sometimes happens when economists attempt to assign a value to ecosystems. Continue reading

Nature’s Disservices

There is much talk in ecological and environmental economics about ecosystem services – all the things Nature contributes to human well-being, such as pollination, climate regulation, aesthetic values or food. Indeed, my own master’s thesis dealt with the ecosystem services approach to valuation of Nature. Even though I wrote about the problems generated by this approach (and there are many), I still am rather a proponent of it. Recently, however, I realized that there exists an important flaw in the way ecosystem services are valued. I owe this insight partly to Bjørn Lomborg and Douglas McCauley. Particularly the latter mentions explicitly the fact that not all Nature “does” is good for human beings. Indeed, along with ecosystem services, Nature provides us with many disservices, too. Continue reading

Yasuní in Master’s Thesis

I already once mentioned that I was going to write a master’s thesis about economic valuation of ecosystems and the Yasuní rainforest of Ecuador. I submitted the thesis some months ago and wanted to make it available to anyone interested in the subject. It can be downloaded here: http://ubuntuone.com/6lkeCkyV4R9LLW9wx8VQLZ I make it available under under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License, so you are free to use it with the restriction of no changes and no commercial use.

[UPDATE: As UbuntuOne, where I had uploaded my thesis, has gone offline, the thesis is no longer available. In case you are interested in getting it, write a comment.]

[UPDATE2: The thesis can be downloaded from ResearchGate here.]