Natural capital is the term used to describe the earth’s stocks of natural assets, such as air, water, soil etc. These assets provide us with the services that are called ‘ecosystem services’, and are the very things that make life possible (for all animals, human and non-human). The issue, however, is whether we should be applying an economic value to nature in the first place.
There are countless discussions and debates weighing up the pros and cons of applying economic value to natural services and goods. These debates have been sparked by concerns over the attitudes towards nature that this approach involves, many saying that it detracts from the intrinsic value of nature being nature, whilst others argue that it is the best approach in the battle to provide an environmentally and economically sustainable future.
This is an important issue because the earth’s current natural processes and services are being over exploited to support unsustainable economic growth that is driven by global markets, but generates a fragile wealth only in favour of a relative minority in terms of world population.
As such it is our responsibility to ensure the survival of the environment, and it is our responsibility to decide the best possible strategy for delivering sustainability. But before we start forming opinions (I’m still finding it difficult to pick a side to support 100%), let’s take a look at the pros and cons of each side:
Natural Capital: Adding Economic Value to Nature – The Pros
Tony Juniper, a journalist for the Guardian, brought forward the argument that although we should appreciate the ‘intrinsic values’ of nature for its own sake, that approach will not be enough to change the ways of people who value money more than the environment that essentially ‘gets in the way’ (2012).
This is supported by Paul Hawken (pp.3-4), who argues that valuing nature recognises the important interdependency between the use and production of human-made capital and the maintenance and supply of natural capital. Dong et al. (2014, p.768) also argue that a proper evaluation of natural capital and ecosystem services, such as grasslands, may help to promote new environmental protection policies.
In other words, by adding a price tag to nature we can encourage people, businesses and governments to be much more careful about the way we use it.
Natural Capital: Adding Economic Value to Nature – The Cons
Although this seems to make financial sense, we cannot deny the fact that ‘adding a price tag’ to nature is a huge ethical concern. The very idea that the rivers, mountains, fields and wildlife should be assigned a specific value based on their place in an ecosystem service is questionable.
The biggest problem with this though is how an agreeable value would be established for certain aspects of natural capital; a value that can be used as a basis of a ‘policy for the Commons’ (Ulgiati et al.2011, p.778). How can a group of people decide the importance of certain ecological processes in relation to others?
The British government paid researchers to produce a total annual price for England’s ecosystems and received a response that stated the project was ‘theoretically challenging to complete’ with some researchers even stating that the idea wasn’t sound.
Natural Capital: Valuing Nature for Itself – The Pros
George Monbiot, also a Guardian journalist, puts forward the idea that nature should be valued for what it is rather than the ‘services’ it can provide to humans. By continuing to emphasize the fact that humans do not own the earth, we can advance to an age of sustainability where we recognise our place as part of the natural world, not as its handlers.
He argues (2012) that no matter how many regulations are put in place to stop exploitation, the money to be made by protecting natural capital will rarely match the money to be made by destroying it. He makes the point that the importance of nature will diminish, and uses the example that if it is in the best interest of a quarry company to destroy a meadow, it can “buy absolution by paying someone to create another somewhere else”.
So in essence, avoiding the valuation of natural capital would prevent us from losing sight of the actual object of our protection: the environment, not the money it could make.
Natural Capital: Valuing Nature for Itself – The Cons
When it comes to making changes, it is an unfortunate fact that most people are quite reluctant to comply. This becomes apparent when we consider the fact that environmental movements have been highlighting world issues for decades, but even though there has been progress, it is by no means astounding.
There is also a distinct possibility that by opposing the attachment of economic value to natural capital, environmentalists could inadvertently be supporting those who believe that nature has little or no economic or moral value. Without a world market to apply regulations and agreements on value, some resources may continue to be over exploited.
Making a Decision
As you can see there are valid arguments from both sides, making this an extremely tricky issue to navigate. The pressure applied by the declining condition of today’s environment does nothing to aid the situation either, and with every passing day we take to decide our course of action more forests are torn down, seas polluted and resources taken for granted.
Some argue that the economic valuation of nature is a necessary evil that must be recognised in order to take swift action on environmental issues. By supporting the valuation of natural capital we can ensure a sustainable future, and it is once we reach that goal that we can once again value nature for being nature itself.
I hope that by reading this article you now have a clearer understanding of the dilemma, and have the information you need to make your decision. Will you support the economic valuation of nature, or should we keep fighting and avoid the price tags? I would love to hear your ideas, so please leave a comment and let me know where you stand.
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