Ecological Economics: Valuing Ecosystem Services

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"The Other Road to Serfdom and the Path to Sustainable Democracy" offers a coherent vision, a progressive and hopeful alternative to neoconservative economic and political theory—a foundation for an economy that meets the needs of the 99% and just might help save civilization from ecological and political collapse.

Our planet is finite. Our political and economic
systems were designed for an infinite planet. These difficult truths anchor the
perceptive analysis offered in
The Other Road to Serfdom and the Path to Sustainable Democracy (University Press of New England,
2012). With wit, energy, and a lucid prose style, Eric Zencey identifies the
key elements of “infinite planet” thinking that underlie our
economics and our politics–and shows how they must change. In the following
excerpt from chapter 6, “Getting Over GDP,” learn why society must begin
valuing ecosystem services in order to measure the true impact of economic

As currently organized, our
economy creates wealth by drawing down natural and social capital, a process
that can’t go on forever. One positive result of an economic slowdown is that
it slows this rate of ecological and social degradation, giving our system a
little more time and breathing room to make the transition we need to make from
our infinite-planet ways.

And, lest you think that in
pointing this out progressives and environmentalists are uniquely indifferent
to the human sorrows and difficulties wrought by recession, keep in mind that
infinite-planet economists have long found a considerable amount of silver
lining in the dark clouds of economic woe. High unemployment reduces “upward pressure”
on wages and constrains the nonwage claims of labor, like the desire for safer
working conditions; both are taken to be positive developments by corporations
and those identified with them, including conservatives who have taken to heart
the slogan once offered by a president of GM, “What’s good for General Motors
is good for the country.” To some of these infinite-planet thinkers, recession
is also an opportunity to release the economy from unwanted environmental
regulation. Thus the remarkable avowal by Ryanair chief executive Michael O’Leary:
“We would welcome a good, bloody, deep recession for 12 to18 months. . . . [It
would bring a halt to the] environmental bullshit . . . that has allowed [Prime
Minister] Gordon Brown to double air passenger duty. We need a recession if we
are going to see off some of this environmental nonsense.”

With less particularly
partisan sympathies, mainstream economists acknowledge that with recession
comes what Joseph Schumpeter called “creative destruction,” the failure of
outmoded economic structures and their replacement by new, more suitable
structures. Downturns have often given a last, fatality-inducing nudge to dying
industries and technologies. (Very few buggy manufacturers made it through the
Great Depression.) With a good portion of 2009’s deficit-financed stimulus money
being directed toward building renewable energy infrastructure, recovery from
the worldwide Great Recession–the downturn that started with the collapse of
the subprime lending market in the United States in 2008–may leave us with an
economy several steps closer to being sustainable, an economy better prepared
to deal with the waning of the petroleum era.

Gross Domestic Product: A
Poor Measure of Economic Health

Creative destruction can
apply to concepts as well. The current downturn offers an excellent opportunity
to get rid of one economic concept that has long outlived its usefulness: gross
domestic product, or GDP. It’s one measure of national income, of how much
wealth Americans make, and it’s a deeply foolish indicator of how the economy
is doing.

Every mainstream economics
textbook that covers GDP in any depth at all offers cautions about using it as
a measure of economic well-being–and then most of those books go on to offer
reams of analysis and theory that take GDP to be a measure of economic
well-being. None of them take good account of the fact that human well-being
is, in total, much broader than material well-being and that GDP is a deeply flawed
measure even of that. In its very structure GDP lies to us, telling us that
infinite expansion of the economy’s ecological footprint is possible. It’s an
infinite planet statistic, unsuited for our economic life on Factory Planet. It
ought to join buggy whips and cassette recorders on the dustheap of history.

The first official attempt
to determine our national income was made in 1934, while the country was in the
Great Depression. How bad was the economic pain? No one knew, because there
were no national data. “We had no comprehensive measures,” says economist
William Nordhaus, speaking in the first-person plural on behalf of economists
back then, “so we looked at things like boxcar loadings.” The goal of GNP was to
measure, by dollar value, all economic production involving Americans whether
they were at home or abroad. In 1991, the US Bureau of Economic Analysis
switched from gross national product to gross domestic product to reflect a
changed economic reality–as trade increased, and as foreign companies built
factories in the United States, it became apparent that the United States ought
to measure what gets made incountry, no matter who makes it or where it goes
after it’s made.

Economic Well-Being vs. Human

Since then GDP has become
our most commonly cited economic indicator, the basic number that we take as a
measure of how well we’re doing economically from year to year and quarter to
quarter. It’s written into thousands of laws and contracts and is the defining
element in the widely accepted, if unofficial, definition of a recession: GDP
decline for two successive quarters. But it’s the product of a time when the sheer
amount of economic activity could be mistaken for a good indicator of our level
of economic well-being, and it ignores important contributors to human
well-being that aren’t bought and sold in markets: the satisfactions and
contributions of volunteer work, nonremunerated domestic production, strong
social and family relations, and the ready availability of natural capital
services like clean air and water. From the vantage point of the Great
Depression, “having more stuff”–and getting people back to work–looked to be
the end-all of economic and social progress, and GDP seemed to be a good
measure of that.

It isn’t. Not only does GDP
not include unpriced goods like volunteer work, housework, child rearing, and
do-it-yourself home improvement; it also completely ignores the huge economic
benefit that we get directly, outside any market, from nature. A mundane
example: If you let the sun dry your clothes, that natural capital service is
free and doesn’t show up in our domestic product; if you throw your laundry in the
dryer, you burn fossil fuel, increase your carbon footprint, make the economy
more unsustainable–and give GDP a bit of a bump.

Very often, the replacement
of natural-capital services (like sun-drying clothes, or the propagation of
fish, or flood control and water purification) with built-capital services
(like those from a clothes dryer, or an industrial fish farm, or from levees,
dams, and treatment plants) is a bad trade–the capital we build for ourselves
is costly, doesn’t maintain itself, and in many cases provides an inferior,
less-certain service. But in gross domestic product, every instance of
replacement of a natural-capital service with a built-capital service shows up
as a good thing, an increase in national economic activity. One result of GDP’s
use as our basic indicator of economic well-being is the current global crisis
in natural capital services, as their civilization-sustaining flow has been dramatically
diminished. It’s no accident that we haven’t held on to a source of well-being
that our basic economic indicator fails to value.

This points to the larger,
deeper flaw in using a measurement of national income as an indicator of
economic well-being. In summing all economic activity in the economy, gross
domestic product makes no distinction between items that are costs and items
that are benefits. If you lose your access to free clean water, as some
communities have as a result of fracking and mountaintop-removal coal mining,
that doesn’t show up in GDP as a cost; but the bottled water you now have to
buy is included and shows up as increased economic activity, a supposed
benefit. GDP is thus literally perverse: if you get into a fender-bender and have
your car fixed, GDP goes up.

A similarly counterintuitive
result comes from other kinds of defensive and remedial spending. Health care,
pollution abatement, flood control, and costs associated with population growth
and increasing urbanization–crime prevention, water treatment, school
expansion, wider roads to handle increased traffic–all increase GDP when we buy
them, even though what we mostly aim to buy isn’t an improved standard of
living but the restoration or protection of the quality of life we already had.

The GDP and Katrina

The amounts involved are not
nickel-and-dime stuff. Hurricane Katrina produced something like $82 billion in
damages in New Orleans,
and as the destruction there is remedied, GDP goes up. One economist to whom I
spoke pooh-poohed this flaw in GDP by pointing out that some of this remedial
spending on the Gulf
Coast represents a
positive change to economic well-being: old appliances and carpets and cars and
housing are being replaced by new and presumably improved versions; flood
victims who rebuild are getting new stuff. But that is, frankly, a foolish
observation. The vast majority of the expense of recovering from the flood
leaves the community no better off–indeed, leaves it mostly worse off–than
before. The failure of economists to call for subtracting such remedial
expenditures from GDP is, at bottom, a disciplinary stamp of approval to a host
of stupid, obviously uneconomic exchanges: no sane person would pay the full
cost of demolishing a perfectly useful house and rebuilding it in order to get
new carpet and a new refrigerator.

The damage done by Katrina
to the Gulf
illustrates one kind of natural capital service in particular, and the
consequences of failing to value it. Between New Orleans
and the Gulf
there once lay a band of wetlands fifty miles wide. A marsh is a sponge; a
strip of it a mile wide can absorb four inches of storm surge. When the bayous
south of New Orleans were lost to development–sliced to death by channels to
move oil rigs, mostly–gross domestic product went up, even as these
“improvements” destroyed the city’s natural defenses and wiped out crucial spawning
ground for the Gulf Coast shrimp fishery. The bayous were a form of natural
capital, and their loss was a cost that never entered into any account–not GDP
or anything else. Had those bayous been in place, they would have absorbed
seventeen feet of Katrina’s twenty-two foot surge. In all likelihood the city’s
built-capital defenses would have held against a storm surge diminished by
bayou absorption.

Gross Domestic Transactions

Wise decisions depend on
accurate assessments of the costs and benefits of different courses of action.
If we don’t count ecosystem services as a benefit in our basic measure of
well-being, their loss can’t be counted as a cost–and then economic decision
making can’t help but lead us to undesirable and perversely uneconomic

The basic problem is that
gross domestic product measures economic activity, not benefit, and it doesn’t
distinguish remedial and preventive activity from the beneficial kind. If you
kept your checkbook the way GDP measures the national accounts, you’d record
all the money deposited into your account and make entries for every check you
write–and then add all the numbers together. The resulting bottom line might
tell you something useful about the total cash flow of your household, but it’s
not going to tell you whether you’re better off this month than last or,
indeed, whether you’re solvent or going broke. That’s GDP: it measures the
commotion of money in the economy, not the physical production that may (or may
not) improve our general standard of living. We ought to rename it “gross
domestic transactions”–a statistic that fewer of us would mistake for a measure
of well-being.

Because GDP is such a flawed
measure of economic well-being, it’s foolish to pursue policies whose primary
purpose is to raise it. Doing so is an instance of the fallacy of misplaced
concreteness–mistaking a map for the terrain, mistaking an instrument reading
for the reality it represents. When you’re feeling a little chilly in your
living room, you don’t hold a match to a thermometer and then think, “Problem
solved.”  But that’s what we do when we
seek to improve economic well-being by prodding GDP.

Cantril Self-Anchoring
Striving Scale

This is readily illustrated
by the events in Egypt and Tunisia
during the Arab Spring of 2011. The regime changes there were widely hailed as victories
for democracy, as proof of the liberalizing power of social networking media,
as testimony to the power of nonviolent political action. All of that they may
indeed have been, but they were also something else: a cautionary lesson in
mistaking GDP for a measure of economic well-being. Despite significant gains
in per capita GDP in both Egypt
and Tunisia
in the past decade, the level of well-being of their citizens had been falling,
and that decline played a very large role in putting people into the streets in

The details: in Egypt, per
capita annual GDP rose from $4,762 to $6,367 between 2005 and 2010. In Tunisia it rose
from $7,182 to $9,489. But both countries saw a significant decline in the
percentage of the population that is classified as thriving according to a
standard, well established measure.

That measure is the Cantril
Self-Anchoring Striving Scale, developed by a researcher named Hadley Cantril.
It’s a survey research tool and asks respondents to answer a few simple

Please imagine a ladder with
steps numbered from zero at the bottom to ten at the top. The top of the ladder
represents the best possible life for you and the bottom represents the worst
possible life for you. On which step of the ladder would you say you personally
feel you are standing at the present time? On which step of the ladder do you
think you will stand about five years from now?

To rank as “thriving,”
respondents have to have positive views of their current place on the ladder
(seven or higher) and positive expectations about the future (eight or higher).
Below that, respondents are ranked as “struggling”–their “ladder-future”
expectation is lower than the present, or both values fall below the thriving
range. Below struggling is “suffering,” people who report their place on the
ladder at four or below.

The Cantril Scale correlates
with objective and subjective markers of well-being. Thrivers have fewer health
problems and fewer sick days, while reporting less worry, stress, and anxiety
and more enjoyment, happiness, and respect. Those in the struggling category
report more daily stress and worry about money than the “thriving” respondents
and take more than double the amount of sick days. Those in the “suffering”
category are more likely to report that they lack basics like food and shelter,
more likely to report physical pain, and more likely to experience higher levels
of stress, worry, sadness, and anger. They have more than double the rate of
diseases compared to “thriving” respondents.

In both countries, as GDP
rose steadily, the number of citizens categorized as “thriving” fell. In Egypt
in 2005, 29 percent of people reported themselves as thriving, but that number
fell to just 11 percent five years later. In Tunisia, Cantril Scale data are
unavailable prior to 2008, when 24 percent of the population could be
classified as thriving; that number fell to 14 percent–a 40 percent decline–in
just two years.

Declining Standard of
Living, Rising GDP

The nonviolent revolutions
in both countries may have been motivated less by abstract commitment to
democratic freedom than by widespread experience of a declining standard of
living and increased economic insecurity, even in the face of rising GDP. As
Hayek had warned half a century ago, “The one thing modern democracy will not bear
without cracking is the necessity of a substantial lowering of the standards of
living in peacetime.” In the modern world–and perhaps because of new media,
which make it much harder for totalitarian states to control public and civic
discourse–the warning needs to be made more general: not just democracies but
even repressive regimes don’t fare well when there’s a substantial lowering of
standards of living in peacetime. Within the standard model, a rising GDP and a
declining standard of living amount to a paradoxical result. Two factors
contributed to this paradox: increasing inequality in income and increasing food

Thanks in part to the
Soviet-built Aswan Dam, which interrupted the regular cycle by which Nile delta
farmlands were renourished by annual flooding, Egypt has in past decades been the
world’s single largest importer of Russian grain. When Russia announced an embargo on grain exports
(the result of unprecedented, climate-change-driven weather that scorched into
ruin a quarter of Russia’s
usual annual harvest), the price of food shot up. Before the embargo, the
average Egyptian family spent 38 percent of its income on food (for comparison:
that figure is 7 percent in the United
States). Most simply couldn’t afford the
post-embargo higher prices, and hunger and food insecurity spread through the
middle class. Perversely, GDP counted higher food prices as a positive contribution
to well-being.

Because of that basic flaw,
a rising GDP, even a rising per capita GDP, did not mean a rising standard of
living. And even if GDP were a more accurate measure of material well-being, it
would still be mathematically possible for a very large number of people to
become worse off economically as per capita GDP rises. This can occur when
there is growing income inequality (i.e., the benefits of increasing GDP aren’t
widely shared).

In Egypt and Tunisia, one or both of these
factors shaped history.

Rising per capita GDP and
falling well-being became an economic fact–and a politically charged social
condition. Declining standards of wellbeing are politically destabilizing and
can lead, expectably enough, to widespread support for sweeping change.

In Egypt and Tunisia the regimes happened to be
repressive, and the call for change came as a commitment to democracy, an end
to corruption, and demands for civil liberties. But within democracies,
declining standards of living can have the opposite effect. Open and
institutionalized systems of regime change–voting–will absorb the discontent
for a time, but if the decline lasts too long, and if it can’t be blamed
(successfully) on a particular party in power, pressure grows for stepping outside
established parties and systems for new, radical, revolutionary approaches.
Democratic forms are no certain proof against a slide into repressive forms. No
system of government–despotic or democratic–fares well when the majority of its
citizens experiences a declining standard of living.

Thus the changes wrought by
the Arab Spring are not only worth celebrating, but also offer us a cautionary
lesson. Sustained or rising wellbeing is what is economically and politically
desirable, and we should measure it directly, instead of counting on GDP to do
the job. And because well-being includes non-economic factors (like enjoyment
of a healthy environment, enjoyment of rich and rewarding leisure time, enjoyment
of family and social relations), it is possible to have a rising standard of
well-being while per capita GDP remains constant or even decreases.

What’s the Solution?

A host of alternatives to
gross domestic product have been proposed, and most of them tackle the
difficult problem of placing a value on goods and services, and of assessing
aspects of human well-being, that never had a dollar price. The alternatives
are controversial, because that kind of valuation creates room for
subjectivity–for the expression of values that are not as cut-and-dried as
market price.

How, after all, do we judge
the exact value of the services provided by those bayous in Louisiana? Was it $82 billion? But what
about the value of the shrimp fishery that was already lost before the
hurricane? Or the insurance value of the protection the bayous would be
offering against another $82 billion loss? And, at a broader and even more
difficult level: what about the security and sense of continuity of life
enjoyed by the thousands of people who lived and made their livelihoods in
relation to those bayous before they disappeared? It’s admittedly difficult to
set a dollar price on such things–but this is no reason to set their value at zero,
as gross domestic product currently does.

Robert Zoellick, president
of the World Bank, is a recent convert to this line of thinking. He’s not
exactly a poster child for progressive causes–nominated to the bank by Bush
Junior, he was Bush Senior’s deputy secretary of state and signed the infamous
letter from the Project for a New American Century calling on Bush Junior to
invade Iraq
and oust Saddam Hussein. He’s got some credentials as a practicing conservative.
But he’s also on the board of the World Wildlife Federation; he seems to have a
particular interest in the plight of panda bears. And perhaps for him, as for
many others, a totemic attachment to one symbolic species unfolded into a
larger sense of care and concern for the web of life within which that species,
and every other, finds a home. In October 2010 Zoellick spoke to a conference
convened in Japan
to find ways to halt the destruction of ecosystem diversity, saying, “We need
to assist . . . economic agencies to measure ‘natural wealth.’ . . . The value of
services we derive from ecosystems shouldn’t be assumed to be zero.” As he
explained: “In clearing mangroves for shrimp farming, the calculation will no
longer simply be the revenue from profit on shrimp farming minus the farming
cost. It would now deduct the loss of coastal protection from cyclones, and the
loss of fish and other products provided by the mangroves.”

Zoellick’s call to measure
natural wealth is an admission that our economic accounting systems don’t
capture all costs and benefits–and that the standard, market-based model that
led us to rely on GDP as an indicator of well-being is fundamentally flawed. To
state the problem in the most abstract, most theoretical terms: if everything
that contributes to human well-being had to be bought through a market, and if
everything bought in markets was a positive contribution to well-being (instead
of being a defensive or remedial expenditure), and if the price of everything
accurately reflected all the costs involved in its production (including
ecosystem losses and social costs imposed on individuals and communities by
production), then and only then would GDP begin to be an accurate indicator of
our level of well-being. Under those completely unrealistic conditions, the
cost-benefit calculations that Zoellick wants to modify would not need to be

The problem with GDP isn’t
just our use of it; the problem with our use of it signals a deeper problem
whose roots lie in the nature of market activity itself. Left to themselves,
markets can’t produce socially optimal amounts of some goods–pure public goods,
goods whose benefits are neither completely rival nor completely excludable. In
general, markets can’t produce socially optimal amounts of anything, not unless
prices tell the truth–and for a long time our prices have been lying to us
about the economy’s root in nature. Changing that is no minor tinker but a
wholesale transformation of standard economic theory.

As noted earlier, before we
can count decline of ecosystem services as a loss in our accounting system, we
have to know their value. Ecological economists have been working to define
those values for decades. Some ecosystem services seem to have a clear market
value, as when beekeepers are paid to place their hives in orchards needing
pollination services. A clear dollar price is attached to the provision of the
service. But it’s the bees that actually do the work, and they aren’t paid. No
bees, no crop; by that measure, the value of bee labor is the value of the
total harvest.

That’s just one possible
method of inferring a value for ecosystem services. Others have names like
“avoided cost,” “replacement cost,” “factor-income,” “travel cost,” and
“hedonic” pricing. Avoided cost gives a solid number for the value to New
Yorkers of the water purification services of their watershed. New
York City has been buying and preserving land that drains into the Hudson and Delaware
Rivers, looking to save the
$6 billion that a water filtration plant would cost the city; that can be taken
as the value, to New Yorkers, of the water purification services of the
watersheds that supply the city. And the value of the storm protection services
of Louisiana
bayou is, in retrospect, fairly easy to calculate. (So is the value of that
service into the future: until climate change started depriving insurance
companies of the usefulness of historical weather data, they were expert at
this sort of risk-to-benefit calculation, because their profit margins depend
on them.) Replacement cost is similar to avoided cost and can be similarly
clear. Pollination services can be valued at what it would take to do the job
by (human) hand: $6 billion to replace US honeybee pollination alone,
according to one study.

The factor income approach
tries to quantify something else–the increase in human incomes that comes from
ecosystem services. When cleaner water boosts marine life, the quantity of fish
that can be sustainably harvested increases, which increases the income of

Travel cost and hedonic
pricing are familiar to mainstream economists, who have long been using them to
estimate some aspects of consumer benefit. If people will pay money to travel
to a national park, or pay extra for a house on the beach, then parkland and
oceanfront property must provide services with a measurable dollar value.

Problems with Subjective

None of these methods is
completely satisfactory for all services, and some services have no clearly
appropriate method. Different methods give different results.

Beyond these problems lie
others. The attempt to parse the value of individual ecosystem services to
particular recipients doesn’t fully capture the complex interactions of
ecosystems and the fact that they exist on the planet as wholes, not as bundles
of discrete multitasking service providers. The ocean that provides a beautiful
view is also home to fish, host to 70 percent of planetary photosynthesis, and
a major element in the planet’s climate control. Upland forest that purifies New York’s water also
moderates flooding, yields forest products, holds recreational and aesthetic
opportunities, and provides refuge to species that perform other services, like
population control of prey and pest species, and so on. Interactions and synergies–the
ones we know about–have to be mapped, to avoid undervaluing or double counting.
And some ecosystem services have no replacements: the ozone layer that protects
us, and all life, from radiation damage is crucial to the existence of life on
the planet, and no human engineering could ever work as fully or as well.

That suggests that the value
of the ozone layer is the value of a habitable planet–which many of us would
say is infinite. There’s no conceptually elegant way to put a dollar price on
incremental damage to something infinitely valuable.

And there are deeper,
philosophical issues. The selection of the valuation method is in part the
selection of the result. Within the results of any one valuation method, the
results that are obtained can be internally consistent–they can have
reasonable, rational relationships that can serve as the foundation of
economically rational decision making. If, for instance, all other variables
are equal, then we can logically assume that a certain amount of forest here
would provide the same amount of ecosystem services as the same amount of
an identical forest there. And we can identify formulas and algorithms
that tell us at what rate the quantity of those services change as the forest
area is increased or decreased (because of synergies between the elements of
ecosystems, the relationship isn’t linear–when you halve the size of a forest
sometimes you reduce ecosystem services by more than half). But the choice between
methods can seem arbitrary, hence subjective. Rational choice theory doesn’t
take kindly to arbitrary decision making rooted in subjectivity–not unless the
subjectivity is consumer choice that’s been laundered first by being cumulated
across an impersonal market; which is to say, economics has never been totally
free of subjective valuation.

Another problem: what is the
present value of a cost, or the risk of a cost, that is avoided in the future?
What might future generations pay us today, if they could, to stop the
destruction of ecosystems whose services they’ll want in the future? The only
correct answer is “We can’t know.” We need some kind of answer if we’re to be
economically rational about valuing ecosystem services; but any useful answer
is as philosophical as it is technical.

Ultimately, putting a cash
value on ecosystem services is like putting a cash value on a human life.
Romantics protest that both efforts are impossible, morally suspect, and pretty
certain to be wrong. All of these are reasonable objections. But we place a
monetary value on human life, implicitly, all the time. Is it worth putting
airbags in cars to save 2,788 lives a year? Collectively we’ve said yes, and a
bit of information on cost and a little arithmetic will tell you the implied
value of a human life. Would an additional MRI machine in a city hospital be a
wise investment? If we’re going to make a rational decision, we have to
equalize lives-saved-per-dollar-spent among competing choices and decide how
much to spend. 

Unless we’re willing to
spend, literally, an infinite amount on health care technology, the amount we
spend implicitly sets a value on individual human life. Such economic
cost-benefit analysis aside, justice (and tort law) sometimes demand that we
make an explicit calculation of the value of a human life, as when compensation
is awarded to family survivors of a wrongful death. Valuing ecosystem services
is just as difficult, and just as necessary. The default is to continue
to value them at nothing, and even the World Bank sees that that’s wrong.

If in politics “Follow the
money” is apt advice, in economics and ecology “Follow the energy” proves
equally useful. An economy subsists on intake of matter and energy. With enough
energy, all the matter that moves in the economy could be recycled. Energy is
ultimately what’s scarce, and its flow defines the relations within ecosystems
and economies. One of the most promising approaches to valuing ecosystem
services looks to the energy embodied in ecosystems and their products. As
developed by ecological economist Robert Costanza and others, this energy
approach to the problem may yet produce a nonsubjective, nonanthropocentric, intergenerational
system of valuation–one that can encompass ecosystem services.

Given all the problems, the
task of putting a monetary value on ecosystem services begins to look like
rocket science. Would that it were that easy. With rocket science, at least you
get a ready indicator of success: the rocket either does or doesn’t do what you
intend. With valuing ecosystem services there’s no experimental feedback, no
chance to return to the drawing board. Generations to come will be the ones who
know whether we got the numbers right. It’s a daunting, difficult task, filled
with potential for contentious disagreement, and the result will have to be implemented
within political systems that are vulnerable to influence by entrenched

Still, it’s better than the
alternative, which is to leave these critical services unpriced and watch them
disappear. That’s not just economically irrational, it’s collective suicide.

This excerpt has been reprinted with permission from The Other Road to Serfdom and the Path to Sustainable Democracy, published by University Press of New England, 2012.

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