Putting a price on biodiversity

Despite the fact that we are in the midst of a global ecological crisis, conservation efforts around the world continue to face an uphill battle. A recent article in Nature suggests that if our current critically endangered species go extinct, we will have achieved an extinction event of a magnitude comparable to that of the dinosaurs, thus marking the sixth mass extinction in the history of the planet.

The latest report from the Convention on Biological Diversity gives insight to the current state of biodiversity by estimating that, between 1970 and 2006, populations of vertebrate species have declined by 31 per cent. Additionally, of the 47,677 species assessed by International Union for Conservation of Nature (IUCN), 36 per cent are threatened with extinction, and two per cent (875 species) have already gone extinct. The future prospects for our planet are summed up: “Continuing species extinctions far above the historic rate [ . . . ] are projected throughout this century. [ . . . ] The loss of such [ecosystem] services is likely to impact the poor first and mostseverely, as they tend to be the most dependent on their immediate environments.”

The numbers speak for themselves — so why don’t we care? The answer is simple enough: economics. To be more specific, the lack of market prices for ecosystem services and biodiversity. This is a long understood shortcoming of current microeconomics — it causes ecosystem services to be undervalued by policy makers and the general public alike. After all, how can one expect to put a dollar value to a hectare of boreal forest or the diversity of species within it?
In the struggle to reform current policymaking practices around the globe, The Economics and Ecosystems of Biodiversity (TEEB) is pushing to do just that — price tag our ecosystems. TEEB is an ongoing study hosted by the United Nations Environment Programme and receives financial support from the European Commission. TEEB advocates for identifying the economic potential (as opposed to cost) of ecosystem conservation. More than just an ideal, TEEB reports identify numerous examples around the globe that highlight the benefits to this approach.
In one such example, New York City, facing the construction of a US$6-8 billion water filtration plant to keep its water supply within federal regulations, instead opted to pay US$1.5 billion to land owners in the Catskill Mountains to improve farm management techniques and reduce damaging run-off. This resulted in conserving the ecological integrity and natural water purification capabilities of the Catskills watershed and saving taxpayers the US$300-500-million-a-year cost of maintaining a water filtration plant.

In another example, marine protected areas (MPA), while causing short-term costs in loss of fishing grounds, have been demonstrated to have an overwhelmingly positive long-term economic and ecological effect. Providing refuge for fish stocks to regenerate causes higher catch rates in the long run. Seventy three per cent of the U.S. haddock catch is taken from within five kilometres of an MPA off the New England coast.

As a final example, one report highlights a study in which protected areas of the Brazilian Amazon were discovered to contribute three times more money into the economy than cattle ranching would (which is the likely alternative land use for the protected area).

As TEEB illustrates, it is clear that the quest of conservation biology is changing from one of ethics to economics.

Ecosystem functions provide a wide range of life support systems, including waste assimilation, flood control, soil and wind erosion prevention, and water quality maintenance. Ecosystem functions are often cheaper and more efficient than man-made alternatives. If we want to postpone the next mass extinction and provide a sustainable resource base for our growing population, we need to realize that the practices of conservation biology and sustainable economics are one and the same.

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