There’s a beautiful meadow up by Bend, Oregon, at the heart of the Glaze Meadow restoration project. The TENTHMIL team was up there with a film crew last year, and I was asked, “Looking out over this meadow, what would you say to the people back in the city?”
And I said, “It’s really sad that the only way this land would have any ‘value’ would be if we put a strip mall on it.”
Nature isn’t free, but a lot of people do business as if it is – and this has been going on for thousands of years. It’s called “The Tragedy of the Commons”, and it warps our economic decisions in all kinds of ways.
Economists are finally coming around to that point of view, as reported this month in The Economist.
A number of the thinkers who have made it a hot topic in the past decade gathered at a meeting on biodiversity and ecosystem services held by the Royal Society, in London, on January 13th and 14th. They looked at the progress and prospects of their attempts to argue for the preservation of nature by better capturing the value of the things – such as pollination, air quality and carbon storage – that it seemingly does for free.
They take a look at the example of a mangrove swamp. Worthless land, right? Nobody would want to own a mangrove swamp. Recently, governments in southeast Asia have been subsidizing shrimp farming, in order to take advantage of that useless, wasted land.
Oops.
In 2007 an economic study of such shrimp farms in Thailand showed that the commercial profits per hectare were $9,632. If that were the only factor, conversion would seem an excellent idea.
However, proper accounting shows that for each hectare government subsidies formed $8,412 of this figure and there were costs, too: $1,000 for pollution and $12,392 for losses to ecosystem services. These comprised damage to the supply of foods and medicines that people had taken from the forest, the loss of habitats for fish, and less buffering against storms. And because a given shrimp farm only stays productive for three or four years, there was the additional cost of restoring them afterwards: if you do so with mangroves themselves, add another $9,318 per hectare. The overall lesson is that what looks beneficial only does so because the profits are retained by the private sector, while the problems are spread out across society at large, appearing on no specific balance sheet.
Swamps aren’t the only places this is starting to get noticed. From forests that don’t look like they provide services until they’re cut down and water quality goes to hell downstream, to swamps that prevent expensive flooding when storms hit, there’s a new school of economics that evaluates the true costs of environmental problems and helps governments make more rational, cost-effective decisions.
One such group is the Natural Capital Project, based at California’s Stanford University, whose InVEST computer program is helping governments in Tanzania and Columbia analyze real costs.
The Economist notes that not everyone agrees with this newfound crossing of balance sheets with bio-inventories.
Some think the notion is an affront to those who place cultural, spiritual or aesthetic value on biodiversity for its own sake. It would be a mistake to look at things this way. In valuing a particular service – such as the cost of erosion to Greek hillsides – which can be quantified with a reasonable degree of certainty, you do not exhaust the reasons for preserving the groves where the dryads play.
“...We can never do nothing. That which we have done for thousands of years is also action. It also produces evils.”
- Garrett Hardin, “The Tragedy of the Commons”
(Originally appeared at TenthMil.com)
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