Global environmental challenges
What’s nature worth? Financial crunch may bring rethink
Maybe not — but more and more environmental economists are arguing that you should.
And they say that the worst financial crisis in 80 years could be a good opportunity to overhaul the world’s economic system and put a price tag on what are often viewed as “free” services from nature, ranging from coral reefs’ role as nurseries for fish, to wetlands’ ability to purify water. See the story here.
Markets failed to regulate banks in the current crunch and they are doing even less to slow global warming that the U.N. Climate Panel projects will bring far bigger economic problems — more droughts, floods, heatwaves that disrupt food and water supplies and rising seas that could swamp low-lying coasts from Bangladesh to Florida.
In a 2006 report into the costs of global warming, former World Bank chief economist Nicholas Stern said: “Climate change is the greatest market failure the world has ever seen.”
Of course it’s hard to place a fair value on the natural world. What’s the value of the mid-Atlantic Ocean? What would you pay to try to stop the accelerating melt of Arctic sea ice in summer? What’s the price of the Amazon rainforest’s ability to soak up greenhouse gases?
Governments have often given up such debates in despair and concluded that nature’s services as either free or infinitely valuable: without nature, after all, none of us would be here. But more and more experts say a wider system of price tags on nature are a first step to slow damage.
One U.N.-backed study, for instance, estimated that a hectare of mangrove in Thailand, properly managed, was worth a minimum $1,000 a year as a renewable source of food, fish or wood and could have other benefits as a barrier against coastal erosion. If you converted the area to a shrimp farm, it would be worth just $200 per hectare per year. (…in the picture at the top left, people are planting mangrove trees in Aceh province, Indonesia: the 2004 tsunami showed they limited damage to coastlines).
What do you reckon? Is the financial crisis a good time to revalue nature? And is it possible to work out a fair price?