Are We One Step Closer to Pricing Nature?

Photo credit: via Flickr/CC BY

One of the most perverse tenets of the economic model that most of the globe adheres to is that extracting natural resources or doing damage to ecosystems is "free". Bottled water companies don't pay for the water they extract, lumber outfits don't pay for the trees they chop down, automakers don't pay for the air pollution they generate, Big Oil doesn't pay for the oil it extracts, and so on and so forth. This problem, known as the tragedy of the commons, is one that's been an ugly thorn in capitalism's side from the get-go. For the most part, we deal with it by imposing restrictions on how much companies can pollute, creating environmental protection agencies to enforce such restrictions, and by designating nature preserves to shield nature from corporate claws. But it's not working.

Deforestation continues to destroy vast sanctuaries of biodiversity around the world, human greenhouse gas emissions are concentrating in the atmosphere and speeding climate change, and fish and coral reefs are disappearing at alarming rates. No, in order to make serious progress in thwarting these ills, one ambitious banker argues, we need to start putting a price on nature. After all, nature is most certainly not free -- not only in the more profound sense that living creatures have a right to exist, but simply in the sense that the elimination of this stuff poses definite costs on society.

This isn't a new concept, and we've written about TEEB (The Economics of Ecosystems and Biodiversity) before. But the concept remains an intriguing one, and its architect, Pavan Sukhdev, continues to push the idea -- and some multinational companies are starting to take note. The Guardian reports:

Teeb, developed under the auspices of the United Nations environment programme, was designed to highlight the growing costs of biodiversity loss and ecosystem degradation, and to draw together expertise from the fields of science, economics and policy to enable practical actions moving forward ... While it was published only last summer, Sukhdev says it is already starting to gain traction. He welcomes Puma's announcement this week of the creation of an environmental profit and loss account, the first corporate to do so.

The environmentally concerned have long sought to impose a value on the so-called negative externalities of corporations' ecologically destructive behavior, and this would do precisely that: "An example Sukhdev gives to illustrate the value of our ecosystem is the coral reefs. Not only do they provide an income for local fishermen, but communities benefit from tourism and the shoreline gets wave surge protection. On top of that cures for cancer and Alzheimer's are being researched from species relying on the corral reefs. All that would be lost if they die."

TEEB helps to designate the true cost of these reefs' decline, and hypothetically, enables governments to attribute each corporations' contribution to the destruction of coral reefs from carbon emissions or otherwise. Considering that it would span not just coral reefs but every other declining ecosystem out there, TEEB's database would be huge, unwieldy, cumbersome, prone to loopholes and book-cooking, and would be resisted by the vast majority of corporations. But given the dominance of neoliberal politics and economics around the world, it might just be one of the most viable ways to prevent ecological collapse.

More on Pricing Nature
Further Proof: Preserving Biodiversity is Profitable Business
Study Shows Investing in Nature More Valuable than Gold (Literally)

Tags: Animals | Global Climate Change


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