One of the big questions environmentalists struggle with is whether there should be a price on nature. For some things, like the cost savings that are realized through cleaner air or water, there is a rote calculation that can be done to price out environmental and health benefits. But, if you think of nature as an independent entity having a worth beyond what it can provide to humans, how do you put a price on it? How much is the Amazon River or the Himalayan mountain range worth?
This philosophical question comes face to face with the very real truth that in our current market economy, the value of nature is not being reflected. Even worse, the cost of unsustainable use is not being incorporated into balance sheets and consequently, there is no market incentive to ratchet back the use of natural resources. A core element of Dēmos' Beyond GDP work focuses on what metrics should be incorporated into our economic accounting that would begin to reflect both the benefit of natural resources and the cost of unsustainable use.
As part of their Genuine Progress Indicator calculation, Maryland uses natural resource valuation to highlight the economic benefit of natural resources and the costs that incur when they are used in an unsustainable manner. As part of the valuation, the location of the natural resources is taken into consideration because location and proximity to other resources has an impact on the valuation.
For instance, when forests are near floodplains, they protect communities and property from flooding and are the most effective way to keep stream, river, and bay waters clean. In this case, forests have more value than just the wood they provide. Maryland's GreenPrint program takes this kind of information into account and helps the state prioritize where conservation funding should go so that the most ecologically valuable areas are identified and conserved. The GreenPrint program is a necessary start to incorporating the economic value of not just natural resource use, but also of natural resource preservation.
The larger question of how to value nature beyond its utilitarian uses remains. Beyond the difficulty of monetizing nature, how do you monetize things like cultural and spiritual resources that have an unquantifiable value? And, if they aren't monetized, how is their value incorporated into a market based system so that their preservation is seen as a value and their destruction is seen as a cost? Answering these questions will require a societal restructuring of the idea of "value" that moves away from a market-based valuation system -- not exactly something that seems achievable in the near future. In the meantime, we can work within our market system to ensure that natural resources are recognized, at the very least, for their economic value and worth.
A version of this post is cross-posted at Policyshop.net