What the Earth Is Worth

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The accounting experts have crunched the numbers, and the results are in: We are undervaluing the earth. A new United Nations report says nations had better start incorporating nature’s value into their balance sheets, in both the assets and losses columns, if they’re to reflect what’s really happening in our warming world. Writes Reuters:

Damage to natural capital including forests, wetlands and grasslands is valued at $2-4.5 trillion annually, the United Nations estimates, but the figure is not included in economic data such as GDP, nor in corporate accounts.

The report, “Mainstreaming the Economics of Nature” (pdf), released by the U.N. Environmental Program (UNEP), details in cold, hard numbers exactly how much ecosystems such as tropical forests and coral reefs contribute to countries’ bottom lines–and how much those nations stand to lose should these ecosystems falter or collapse.

I’ve often had conflicting reactions to this increasingly common practice of applying accounting principles to natural systems, or “ecosytem services” as they’re sometimes called (an approach Utne Reader covered in the article “Hiring Mother Earth to Do Her Thing“). On the one hand, putting a value on nature will indeed lead to better measurements of true prosperity than pure GDP, with its blindness to these “externalities,” and speaking in dollars is often the only way to “sell” environmental protection in a capitalist-driven world. But isn’t trying to put a number on the worth of creation a somewhat futile and hubristic exercise? Perhaps the earth is priceless.

Fortunately, the man who’s the driving force behind the UNEP report, German banker Pavan Sukhdev, is making no claims to hanging a price tag on the planet. The Environment News Service reports:

Sukhdev emphasized that the TEEB [The Economics of Ecosystems and Biodiversity] study, which has involved hundreds of experts from around the world, is not a cost-benefit analysis of the Earth.

TEEB recognizes that biodiversity has many different types of values, not all of which can be given a price tag, he said, adding that market solutions represent but a small fraction of the economic solutions available to value biodiversity.

Both India and Brazil have said they’ll use the findings as a guide in forming policy. And the United States? As is usual in environmental matters these days, they’re not exactly leading the way. As the Washington Postreports:

The idea of incorporating ecosystem benefits into policymaking has yet to gain the same level of traction in the United States, where a proposal to cap greenhouse gas emissions collapsed this year after critics said it would damage the nation’s economy.

“I’m not seeing, as of yet, anything firm coming from the North American continent, but I’m hoping it’s a matter of time,” Sukhdev said.

Sources: Reuters, The Economics of Ecosystems and Biodiversity, Environment News Service, Washington Post

Image by caseyyee, licensed under Creative Commons.

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