By Donella Meadows
November 21, 1991
One of the main problems of the market system, every economist knows, is that it doesn’t put a price on nature.
Brazilian cattle barons who burn down tropical forest for temporary pasture never compare the value of beef exports to the full value of the standing forest. U.S. developers can pick up a swamp for a song; they count the cost of fill, but not the worth of the wetland for moderating floods, breeding fish, or feeding ducks. Japanese fishing boats can sell a single bluefin tuna to Tokyo sushi makers for $20,000 and pocket all the profit without paying rent to the ocean.
Therefore rainforest turns to pasture, wetlands become shopping malls, and the Atlantic bluefin tuna population is 95 percent gone and still going down.
Most people who don’t directly profit from these transactions feel instinctively that there is something wrong with them. Something of great, enduring, communal value is being lost for a small and transitory gain realized by a very few. But the gain is measured in dollars and the loss is in value of a different, less quantifiable kind. In a culture that takes dollars more seriously than anything else, it’s hard to argue against environmental depradation, except in strictly economic terms.
So some ecologists engage in the exercise of putting price tags on nature. Surprisingly, that’s not hard to do. Perhaps not so surprisingly, even conservative assessments of the value of undisturbed ecosystems show that failing to consider their value can lead to stupid economic decisions.
For example, Eugene Odum and J. Gosselik of the University of Florida once calculated the value of a tidal marsh. They included its services in removing water pollutants (marshes are superb sewage treatment systems) and in acting as a nursery for game and food fish. They didn’t try to include inestimable scientific or esthetic values, such as providing a free home for endangered species. Even with an incomplete analysis, they concluded that the marsh left undisturbed was worth at least $82,940 per acre — about 100 times its going market price.
Alwyn Gentry of the Missouri Botanical Garden did a similar estimate for a hectare (2.4 acres) of tropical forest in Peru. The hectare he surveyed had 842 trees of 275 different species on it. (For purposes of comparison, the 15-hectare forest on my New Hampshire farm has 20 tree species.) Of those many kinds of trees, 72 yielded products with current value in the nearby market — including rubber, medicines, and many kinds of fruits and nuts. There were also bushes and vines that could be harvested sustainably for baskets, roofing, and other purposes.
Gentry found that the hectare of forest could yield a perpetual harvest worth (subtracting transportation and labor costs) $422 a year. That return gives each hectare a net present value (discounted at 5 percent) of $6820. In comparison, the net present value of a fully stocked cattle pasture was $2960, not counting the costs of weeding, fencing, and animal care, and assuming that the pasture would not erode into worthlessness. The net present value of wood from a one-hectare managed plantation of a single kind of fast-growing commercial tree was $3,184, again assuming a dubious sustainability. The value of the forest clearcut and delivered to a lumber mill was $1000 — once.
It’s instructive to play this nature-valuing game, and it’s necessary when talking to people whose sense of value is limited to dollar signs. But again an instinctive feeling comes up that there’s something wrong about it. Treating nature as a commodity is dangerous and demeaning.
It’s dangerous because it implies complete knowledge, when in fact our understanding of what natural products and services could be useful is very incomplete. It’s dangerous because economic calculations ignore social concerns about who benefits and who loses. Most of all it’s dangerous because dollars are slippery. Using them as a measure is like using a ruler with inch marks that stretch or contract with inflation, interest rates, and momentary imbalances of supply and demand. You wouldn’t want to measure anything important that way.
And nature is so important that measuring it at all is in fact a sacrilege. It’s like evaluating the Pyramids for building material or putting the Washington Monument up for bid for a theme park. It’s worse than that, because those examples are works of man, and nature is a work of God. Measuring it in money terms reduces the eternal, mystical, and unreproducible to the short-term, expedient, and commercial. It is an act of ignorance and arrogance.
And, given the world we live in, it’s necessary. We who try to defend nature against relentless commercial pressure have to argue in economic terms. We can win by doing so, because nature’s gifts, even when only partially estimated, are much greater than the value added by human productivity.
Economic terms are the only ones taken seriously in the present public discourse. Therefore we should work to change that discourse. Every time we pretend to put an economic value on nature or descend to engage in marketplace discussions about it, we should apologize. We should never let the discussion end without pointing out how cheap and trivial it has been.
Copyright Sustainability Institute 1991
