Putting a Pricetag on Nature
It's difficult to take the long view when what's happening right now is so dire, but yesterday I ran across an article the title of which gave me pause: "Nature Loss Dwarfs Bank Crisis." (And lest you think this comes from some alarming leftie blog, it was the BBC.) Over the past year or so, I've been seeing more and more of these stories: people trying to hang a pricetag -- generally, a shocking one -- on the natural resources we're losing every year. For instance, the cost of bio-engineering all that man-made carbon out of our atmosphere would be, by most estimates, astronomical. But the study in question looked at a different crisis: it monetized the disappearance of the world's forests.
Can you monetize such a thing? Apparently so: Deutsche Bank economist Pavan Sukhdev puts the cost at somewhere between $2 trillion and $5 trillion -- annually -- whereas to date, the current financial crisis has cost the world's banks something less than $1.5 trillion. It's just a different kind of capital that's being lost. To put it another way: that's about 7% of the world's gross domestic product.
So how'd they come up with this insane figure? According to the BBC, the key to understanding the cost of forest loss "is that as forests decline, nature stops providing services which it used to provide essentially for free. So the human economy either has to provide them instead, perhaps through building reservoirs, building facilities to sequester carbon dioxide, or farming foods that were once naturally available -- or we have to do without them; either way, there is a financial cost."
Naturalists would argue, of course, that nature provides many benefits that could never be monetized, and that such calculations are a coarse way to understand the world. But the study's leaders point out that such arguments have done little to combat biodiversity decline and propel governments to take action -- so they figured they'd speak to them in a language they respond to more readily -- that of the pocketbook.