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How Do We Value Nature?

J. Mijin Cha

One of the big questions conservationist struggle with is whether or not we should put a price on nature. For some things, there is the more rote calculation on how many cost savings can be realized with cleaner air or water as an argument for stricter pollution control. But, if you think of nature as an independent entity, how do you put a price on it? How much is the Amazon River or the Himalayan mountain range worth?

This philosophical question comes face to face with the very real truth that in our current market economy, the value of nature is not reflected and by not being counted, there is no market incentive to incorporate the costs of unsustainable use. A core element of our Beyond GDP work looks at how to value the economic role that natural resources play and incorporate some of these external costs so that not only are we aware of the impacts, we can begin to start incorporate them into pricing. 

As part of their Genuine Progress Indicator calculation, Maryland uses natural resource valuation to highlight the economic benefit of natural resources and the costs that incur when they are used in an unsustainable manner. They also take into consideration where the natural resources are located because location and proximity to other resources has an impact on the valuation.

For instance, when forests are near floodplains, they protect communities and property from flooding and are the most effective way to keep stream, river, and bay waters clean. In this case, forests have more value than just the wood they provide. The GreenPrint program takes this kind of information into account and helps the state prioritize where conservation funding should go so that the most ecologically valuable areas are found and conserved. The different ways that forests can economically contribute are shown below. 

The larger question of how to value nature beyond its utilitarian uses remains. One of the boxes above discusses more qualitative impacts, like cultural and spiritual resources. But again, what is the appropriate price to put on things that can’t be quantified? It’s a question that I think is far from being answered. In the meantime, we can work within our market system to ensure that natural resources are recognized, at the very least, for their economic value and worth.