Can we put a price on nature, asks Dax Lovegrove

Sensemaking / Can we put a price on nature, asks Dax Lovegrove

08 Jan 2011

WWF engages both economic and emotive thinking to protect the natural world

Can Pavan Sukhdev do for biodiversity what Nicholas Stern did for climate change? The Deutsche Bank economist is leading a UN-backed study on 'The Economics of Ecosystems and Biodiversity' – TEEB for short. And its first report has already sent ripples through both the policy and business worlds.

Simply put, TEEB warns that we are failing to factor in the value of vital services – from flood protection to crop fertility – which are currently provided free by nature. That failure could prove extremely costly. Speaking at the Global Business of Biodiversity symposium, Pavan gave a couple of chilling examples.

In Honduras, it had seemed good business sense to convert 'unproductive' mangroves to shrimp farms, so creating jobs and boosting the local economy. But that ignored the essential role mangroves play in preventing floods and saline intrusion, and feeding nutrients into food chains. Far from being unproductive, these and other vital services are provided free by the mangrove belt – and so their overall value to the local economy is far greater than the transient profits from shrimp farms.

Insect pollination is another vital service. We take it for granted, Pavan warned, until we discover it's no longer there. This happened in the Chinese province of Sichuan, where excessive applications of pesticides have wiped out pollinating insects. As a result, food crops have to be pollinated manually – a hugely costly and cumbersome operation.

Such examples impressed the audience at the symposium, which included a number of CEOs and government ministers, among them the UK Environment Secretary, Caroline Spelman.

The challenge is to tip this kind of thinking into the mainstream. It's something in which WWF is very much involved, not least through its One Planet Economy work, which emphasises the economic and financial case for acting on biodiversity loss and climate change.

Efforts to tackle biodiversity loss have one clear advantage over climate negotiations: the local benefits of doing so – as in Honduras and Sichuan – are often very clear. Now that the economic costs of inaction have been so starkly demonstrated by the TEEB study, positive action to protect natural services might happen faster, and go further, than that around climate change.

Of course, it's not a question of "either/or". Take forest destruction. When you burn a rainforest, you not only lose its vital role in sustaining the water cycle and preventing soil erosion. You also release a huge amount of carbon – deforestation is responsible for more than 20% of CO2 emissions. And climate change in turn increases the likelihood and severity of forest fires. So action on biodiversity and climate change have to go hand in hand.

They also have to happen at both local and international levels. The production and consumption of goods in different countries depends on a complex web of natural resource use and ecosystem services which stretches across the globe. All of which makes for complex discussions when deciding who benefits most from such services – and so who should pay for them. They include everything from local pollination by insects, to regional water purification by wetlands, to global carbon sequestration by rainforests.

The wider question of how exactly we value nature also came up at the symposium. An economic framework is clearly essential for business leaders and policymakers, helping them 'future-proof' current decisions. But as one speaker commented, it was hard to put an economic value on the way in which his holidays were vastly enhanced by nature's beauty. Many of us inspired by natural wonders, whether in distant landscapes or our own gardens, would share this essentially emotional, even spiritual, motivation for action. Others reject a utilitarian approach completely, arguing that safeguarding nature is paramount regardless of whether there is an economic or emotional benefit for humans.

This is the juggling act environmental advocates face. At WWF, we make use of all the available drivers in our search for a One Planet Future, where nature is protected while society flourishes. These include economic thinking, local and global political instruments, green game-changing business innovations (see– and the inspiring, emotive stories we can bring from the field.

One thing is certain. Whether nature is cost-effective or priceless, we need it more than it needs us.

Dax Lovegrove is Head of Business and Industry Relations at WWF-UK.

WWF-UK is a Forum for the Future partner.

Image credits: sara winter / istock

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