Valuing Nature

This piece was prompted by a short course that I have just completed[i]. I have included some material from the course in this piece.

I have always valued nature. I have loved and appreciated the natural world from my earliest days but there are academics, policy makers and economists who take a rather more objective view. There is even a branch of study called environmental economics – more of that in a moment.

What do we mean by nature? It is the physical world collectively, including plants, animals, the landscape, and other features and products of the earth, as opposed to humans or human creations. Arguably humans are part of nature too. It depends whether you believe that we are ‘in’ nature or somehow ‘above it’. I’ll leave that argument for now.

Nature does all sorts of things for us. Valuing Nature in the academic sense is about the equivalent money value of the things provided by nature. Collectively these are referred to as ecosystem services. Academics reckon these services are of four kinds.

Regulating Services

Ecosystems regulate essential processes, and we derive benefits from those processes. For example, woodland and forest ecosystems naturally sequester large amounts of carbon dioxide from the atmosphere and help clean the air around us. Given air pollution is the world’s largest environmental health risk, being able to reduce this will contribute to saving millions of lives around the world. Farmers may seek to incorporate natural parts of ecosystems to help improve their yields. For example, providing a habitat for bird species can reduce the number of insect pest species that can kill the crop. Hedgerows between fields act to improve biodiversity.

Supporting Services

These are the services that prop up the rest of an ecosystem and allow ecosystems to provide flood defences, water purification and the like. Supporting services include photosynthesis (primary production), nutrient recycling and the creation of nutrient-rich soils.

In the oceans, phytoplankton (the tiny ‘plants’ of the sea) take up carbon, nitrogen and phosphorus from surface waters, which then get incorporated into the marine food web. Eventually, as organisms die, the carbon and nutrients sink to the depths of the ocean. But ocean currents upwelling along the west coast of many continents bring the nutrients back to the surface again where they can fuel the ecosystem.

Provisioning Services

These include services where we get an end product for personal use – such as food, timber, water, medicines, energy, genetic resources and other raw materials. In the UK, plans to plant 15,000ha of new woodland to produce £65m of timber would have cost £79m to do – which already puts the project at a loss. However, when valuing the ecosystem services that the trees could provide in soil stabilization, wind deflection, air purification and flood prevention, the new analysis by EU Environment (2016) valued the benefits at £546m.

Cultural Services

These are the non-material benefits that people get from an ecosystem. They can have cultural significance, such as the Amazonian rainforest, to communities living there, and spiritual or historic importance too. This is unquantifiable ‘value’, in that we can’t put a price on how we feel about a place. But this doesn’t make it any less important. People rightly place a great emphasis on this social value.

Environmental Economists can quantify the economic benefits of recreational activities or educational opportunities that an ecosystem can provide – For example travel to a completely new part of the world for the specific intention of visiting an ecosystem? Coral reefs are the highest valued ecosystem for tourism and recreational activities, contributing approximately $9.6bn each year.

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My first experience of valuing ecosystem services was about five years ago when I attended a seminar on tree planting sponsored by a large local specialist tree nursery. One of the speakers was arguing for the value of trees in an urban environment. He argued for the benefits of trees in their role as air cleaners, noise reducers, cooling and homes and food sources for birds and invertebrates. He wanted the audience to recognise these arguments when dealing with local authority planners and developers. It made sense to me but putting a 'cash' value on urban trees seemed difficult and he resorted largely to statistics that supported the effect on house prices as a surrogate for ecosystem value. He had evidence that houses in leafy streets generally commanded higher prices than those in barren streets. I took his point but maybe there were other factors at play? Perhaps there were other desirable features affecting the house prices not taken into account in his argument. Never mind - even if there were other complicating factors, I do accept that the benefits he attributed to trees in urban environments continue to make sense to me and do have a value in emotional terms and in economic terms too.

Returning to the FutureLearn course, there were case studies for example The Great Barrier Reef. I now realise that attempts to put cash values on ecosystem services are more developed than I previously thought. I am fortunate enough to have visited The Great Barrier Reef as a tourist. So I do feel a connection with this case study. The worry is that climate change and the higher ocean temperatures are the cause of the coral bleaching. This effect is just one example of changes occurring in the natural world that should set alarm bells ringing for us. Just as an aside, I first came across a case study related to The Great Barrier Reef in 1971 when the concern at that time was damage caused by The Crown of Thorns Starfish (still an issue I believe) I only mention it to illustrate how difficult these problems can be and how long it may take to tackle them. The value put on the reef (and reefs around the world) relates to three factors: tourism value, coastal protection from storm surges and the ability to lock up carbon. My concern about the valuation process is its inability to value biodiversity. One might argue that biodiversity value is reflected in the attraction to tourists. But suppose there were very few tourists because travel and accommodation costs made it an unattractive destination, the biodiversity would have value simply because it supports and fits into a greater whole of nature. Where does that value figure in economic calculations?

[i] The course was a MOOC (Massive Open Online Course) available at FutureLearn. https://www.futurelearn.com

It was provided by Exeter University and titled Valuing Nature