Last week saw an unusual addition to some of the world’s top financial publications, as BBC Earth published its Earth Index in the Wall Street Journal, The Times, the Singapore Business Times, and the Economic Times of India.
Containing some familiar examples of the economic value of nature (according to the index, bees are worth A$222 billion a year to the global economy) and some not-so-familiar ones (beavers, evidently, make an annual contribution worth more than A$1 billion), it backs up the idea that nature is worth far more than the global market economy.
We hope this kind of publicity can help both politicians and the public make a rational, self-interested adjustment to their value system. If anything the numbers are an underestimate because nature is infinitely valuable. We would not have any economy at all if nature was not cycling nutrients, photosynthesising, and performing many other “ecosystem services” upon which all human activity depends.
However, we can also say that agriculture, culture, the built environment, water, and other major components of the real economy are also infinitely valuable, for many of the same reasons.
Of course, we don’t pay infinity dollars for water. In fact, many of us pay a lot less for water than we do for mobile phone service or pet food. We pay a finite quantity of money for our infinitely valuable water and other natural assets, whether they are traded in markets or not. And here is the crucial thing: the dominant political economy of our global society places a value on nature that is much closer to zero than it is to anything remotely the size of global economic product.
Sadly, the result is that we are failing miserably to behave sustainably. We are in the middle of the sixth mass extinction of species in the Earth’s lifetime, and this one is directly attributable to human activity. Meanwhile, the global human population is expected to grow past 9 billion despite the fact that almost a billion of us are currently malnourished.
At the same time, we are failing to take seriously the challenge of climate change. The sustainability science community is increasingly concerned about tipping points and planetary boundaries.
The idiot lights on our planet’s dashboard are flashing, yet the world moves forward with business as usual, with our priorities still driven by the neo-classical economic view of the world.
Nature is worth more than we think
Much of the difficulty lies in our individual and collective value systems, of which many of us are unconscious. Efforts to determine the economic value of ecosystem services are one way to try and show people the evidence for why our values have to change.
One study estimated the value of “storm protection” provided by coastal wetlands at US$23 billion per year in “avoided costs”. Yet our society seems to have difficulty with the idea that avoided costs are real benefits.
Our accounting system has a blind spot with respect to the value of nature. Here’s one example of our skewed priorities. Suppose you buy a cup of coffee. You probably receive a receipt, the transaction will be recorded on a computer and the details put into the banking system, and you might even be able to deduct the cost of this cup of coffee from your taxes for some reason. Our political economy values this $5 transaction enough to track it carefully.
Our political economy does not value biodiversity to this extent. It is estimated that every 20 minutes a species goes extinct that we probably have not valued enough to even name, let alone record its permanent disappearance from the planet.
Nature in the balance
What would our economy look like if nature was valued more? This is a wonderful question to ponder. Many jobs for those of us educated in STEM (Science, Technology, Engineering, and Mathematics) have historically been in industries such as defence and aerospace that serve the public good. Many of these jobs are disappearing, despite efforts to increase the number of STEM graduates in our universities.
Our civilisation could collectively choose to study, protect, and value nature, just as we chose to go to the moon and build aircraft carriers. This shift would involve jobs in alternative energy, sustainable agriculture, urban redesign, and numerous other fields. If we decide that it is in our collective best interest to protect and sustain the public goods that natural capital provides there are countless ways we can do it.
Getting nature in this balance is essential if we hope to create a sustainable and desirable future. To get this balance right we have to acknowledge the relative contributions of all of our assets, both marketed and non-marketed.