UN adopts way of putting a dollar amount on nature, but some question the idea.
Read the whole story
Read the whole story
“Natural capital” accounting method might give nature an economic voice
- Thread starter JournalBot
- Start date
I can see this being used as an excuse to exploit natural resources even more--management can put a concrete value on a forest or lake, compare it to the profits resulting from its destruction, and proceed if the latter exceeds the former while feeling entirely justified ("it's just good business!"). Or consider an official chafing at the idea of this accessible money source just lying around begging to be "spent"...
Upvote
42
(50
/
-8)
The idea of 'owning' the atmosphere dates back a few decades, these same ideas were trotted out in the late 1990s as well.
The problem is pretty obvious; if you want to put a price on the atmosphere someone has to be willing to pay it. Control of resources by capital is the basic model (as with oil, timber, ores, etc.).
So... let's strap a valve over the breathing tubes of every human on the planet, which allows said human to breathe air, as long as they have paid their monthly air bill... and if they don't pay, shut it off!
It's always been a rather ridiculous idea, the kind of thing a 'Nobel-Prize Winning Economist' would come up with.
The problem is pretty obvious; if you want to put a price on the atmosphere someone has to be willing to pay it. Control of resources by capital is the basic model (as with oil, timber, ores, etc.).
So... let's strap a valve over the breathing tubes of every human on the planet, which allows said human to breathe air, as long as they have paid their monthly air bill... and if they don't pay, shut it off!
It's always been a rather ridiculous idea, the kind of thing a 'Nobel-Prize Winning Economist' would come up with.
Upvote
18
(25
/
-7)
Jesus. I'm in Canada and my first thought was "Neat. This'll be interesting to see how much of a country is still in a natural state and where we rank on the world stage"....where are you that your thought process immediately goes to, "What's the potential for exploitation here?"
Upvote
19
(22
/
-3)
Flawless idea. If there’s one thing businesses are known for, it’s prioritizing long-term sustainability over short-term gains...
Upvote
30
(32
/
-2)
Agree with the other comments so far, capitulation to some idea of the inevitability of capitalism doesn’t seem to be the answer here, and as has been said would probably increase exploitation not decrease it.
Seeing everything in terms of dollars and cents is a big part of what GOT us here, so I doubt leaning into that harder is going to fix it.
Seeing everything in terms of dollars and cents is a big part of what GOT us here, so I doubt leaning into that harder is going to fix it.
Upvote
8
(14
/
-6)
Fancy Internet Person
Ars Praefectus
This sounds like it will open new frontiers in greenwashing and finally bring accounting fraud to prominence in environmental destruction as well.
Upvote
20
(22
/
-2)
Depends upon how it is executed.
I recall in the past reading articles about trying to convince African villagers not to kill the kill/hunt wildlife. When conservationists argued, "Do it for the environment. Do it for nature.", they were ignored.
When the conservationists could demonstrate that the locals would make more money on tourism than poaching, then real change happened.
Upvote
45
(46
/
-1)
I've always wanted to know how many acres of forest my life is worth.
Upvote
6
(6
/
0)
I am intimately familiar with the way national and international-scale businesses operate. I'm not looking for a way to exploit these rules but I can 100% guarantee that this is the first thing most (all?) businesses will do.
Upvote
17
(20
/
-3)
Difference in scale though. For example, local farmer is more likely to see that economic value in terms of sustainability. They can’t just up and move to a new field if they destroy it all after all.
Big corps don’t care because their shareholders demand profits, not sustainability... or at least sustainability takes a back seat when there is large money to be made in the short term.
**Edit** for context/background, I grew up working summers on a friends family owned ranch. Ranching is inherently bad for the environment, but once their ranch and a lot of their neighbors ranches were taken over by large corps (underhanded stuff: get cozy with the banks, get banks to squeeze ranchers on loans, then swoop in and buy low to get them out of the hole they’re in) the environment was markedly worse. While cows might be bad methane wise, they can be managed to prevent overgrazing and local environmental damage. The corps just basically ‘strip-grazed’ the land for a few years, then moved on selling the largely dead land for a pittance. It’ll be decades before it’s useable again.
Upvote
16
(17
/
-1)
But that is what we do on a day to day basis. You can't run a world without any air pollution. The question has always been the extent to which some pollution is permissible so that you can have transportation and local industry, but not so much that the expected cost to human lives is deemed unacceptable. You get this with coal, gas, and with how much radiation exposure nuclear workers are allowed, and the standards will vary for normal operations, for preserving vital equipment and for saving lives.
If you are going to do this calculus, you might as well try to put the best possible dollar number on it.
Upvote
22
(23
/
-1)
"Come roll in all the riches all around you
And for once,
never wonder what they're worth."
And for once,
never wonder what they're worth."
Upvote
4
(4
/
0)
Do they take into account the "in perpetuity" aspect of a natural place? If you strip mine a place you get the value of the rocks...just once. Once a pristine natural space is ruined it can never really be said to be a pristine natural space so it is also kind of ruined pretty close to "in perpetuity".
Upvote
17
(17
/
0)
I'm sure those economic indicators were factored heavily into Yukon's Faro mine catastrophe, and they were surely borne by the shareholders. Oops nope they went bankrupt and now we have a billion dollar environmental disaster on our hands.
See also Alberta's abandoned wells.
Upvote
15
(17
/
-2)
Businesses are profit seekers. There is nothing wrong with that. But you have two scenarios. Let's say a corporation wants to take over a plot to build a factory or a campus. There are regulatory guidelines for that, some of which concern environmental issues, some of which will involve the amount of economic activity generated by the business.
You could go through this process with an explicit value for the natural amenities of said plot. You co go through this process without one. In which world do you think that regulators will have more bite during the process? In which world do you think that it's more likely that the firm will be required to develop in a way that is, all else being equal, better for the environment?
Because people like nature, but people also like to have jobs and investments coming into their part of the country, and the question is if you could do it in a way that has less as opposed to more externalities. If you don't put a number on it, you would never know how much, or what, those externalities are. Saying that it's "priceless" is exactly as meaningful as saying that it's worthless. The EPA can't draft regulations based on that.
Upvote
18
(19
/
-1)
I am extremely for this idea. The externalities of economics doesn't properly value nature, and refusing to do so means a gross underestimation and disincentive to preserve it.
For instance, when the BP oil spill happened, they only had to pay <20 billion dollars in fines for ignoring the regulation for an emergency shut off valve (imagine how many other rigs also did this). But if we consider the value of the natural capital, the cost was significantly higher. The hotels on the gulf coast, where people pay to see pristine beaches were easily worth significantly more. The death to wildlife had knock on effects including the livelihoods of fishermen in the area probably took a heavy hit as well. The health costs for people from louisiana through mexico also cost a lot. Yet they only had to worry about their fines and not those costs. And all of those costs could have been avoided with the installation of an emergency shut off valve. Because we don't value capitalistically the many benefits of nature, we undervalue it and it is subject to the tragedy of the commons.
Listening to an interview with the author of the book "natural capital" about 20 years ago started a life-long journey into considering environmental policy like this. If a business had to pay for not just the cost of cutting down a tree for manufacturing, but the cost of carbon you release, soil erosion, the natural habitat you lose, etc, it would make a more environmentally conservative business much more successful than an environmentally wasteful one. It also incentivizes innovation. If i can make a product with no environmental costs (like an ebook rather than a paper one), then it make a much more successful business. If I could make money planting trees rather than harvesting them, then another why wouldn't I? And once we start the process, if a business exploits a loophole, we can adjust the policy to work better. It is better than letting them run roughshod over the environment with no costs whatsoever the way we do now.
For instance, when the BP oil spill happened, they only had to pay <20 billion dollars in fines for ignoring the regulation for an emergency shut off valve (imagine how many other rigs also did this). But if we consider the value of the natural capital, the cost was significantly higher. The hotels on the gulf coast, where people pay to see pristine beaches were easily worth significantly more. The death to wildlife had knock on effects including the livelihoods of fishermen in the area probably took a heavy hit as well. The health costs for people from louisiana through mexico also cost a lot. Yet they only had to worry about their fines and not those costs. And all of those costs could have been avoided with the installation of an emergency shut off valve. Because we don't value capitalistically the many benefits of nature, we undervalue it and it is subject to the tragedy of the commons.
Listening to an interview with the author of the book "natural capital" about 20 years ago started a life-long journey into considering environmental policy like this. If a business had to pay for not just the cost of cutting down a tree for manufacturing, but the cost of carbon you release, soil erosion, the natural habitat you lose, etc, it would make a more environmentally conservative business much more successful than an environmentally wasteful one. It also incentivizes innovation. If i can make a product with no environmental costs (like an ebook rather than a paper one), then it make a much more successful business. If I could make money planting trees rather than harvesting them, then another why wouldn't I? And once we start the process, if a business exploits a loophole, we can adjust the policy to work better. It is better than letting them run roughshod over the environment with no costs whatsoever the way we do now.
Upvote
24
(25
/
-1)
Fancy Internet Person
Ars Praefectus
How much can I pay my accountants to argue for the high number I think is fair?
And how much will the oil, gas, coal, and cobalt industries be able to pay their accountants and lawyers?
By what process do we end up at the "best possible dollar number" when the crucial question is who already has the dollars to buy opinions?
Upvote
0
(2
/
-2)
That is the standard MO of many many mining operations*. I think the mining folk should have to post a bond or buy Lloyds insurance to cover the cost of mitigation of an environmental debacle prior to being allowed to dig the first shovelful.
* see Rio Tinto or Formosa Resource Corporation
Upvote
6
(6
/
0)
Exactly this. You can’t really put an economic value that will take into account the fact that our actions can irreparably harm something for 1000s of years- either the value would be so insanely high as to be an absurdity that will be ignored by corps and govs, or it’ll be artificially low, say something like “value over 50 years”, which means that where profit is still higher exploitation will be rampant.
This is like a natural economic version of limited liability in that case.
Upvote
-4
(0
/
-4)
Fancy Internet Person
Ars Praefectus
The "Tragedy of the Commons" is ahistorical and promoted principally by the ecofascist eugenicist Garret Hardin.
His claims are wrong, clearly contradicted by evidence and history most notably debunked by Elinor Ostrom.
Upvote
-9
(4
/
-13)
There is a valuation problem. In general, value is established either by the prevailing market price between unrelated parties or the present value of a discounted cash flow (generated by the asset in question). The problem with valuing pristine forests or marshlands is that there is no cash flow; there is generally no payment for non-use unless the government steps in to be the payor. Similarly, there is also no market price for assets that are held explicitly so that they are not exploited.
I know my peers. In the absence of a reasonable valuation method, I foresee rampant abuse by polluters justifying a low valuation with a team of clever lawyers.
I know my peers. In the absence of a reasonable valuation method, I foresee rampant abuse by polluters justifying a low valuation with a team of clever lawyers.
Upvote
4
(5
/
-1)
True, but do you think not knowing what the value is will make it any better?
If you are in court - an American court that is - there is an exceptionally high standard to qualify as an expert witness, and all of this calculus is fairly standardized. Insurance companies use it, courts use it to determine responsibilities of natural disasters. Nobody is out there disputing the value of a human life conditioned on age and earning potential. And you won't get fundamental disputes about the value of natural amenities once you have a similar system in place, so long as the regulations are drafted in a similar fashion.
The difference is that beyond the human value and the value of the plot, you're putting a dollar value on natural amenities. The methodology might need to be refined with time, but I'd argue that any procedure is better than the current one, which in most cases defaults to the opportunity value of developing something else - which is going to be pretty close to zero if we're talking about mining which usually happens in fairly remote locations.
Upvote
5
(5
/
0)
I'd like to see the "cost to replace" added to the value of keeping it natural and subtracted from the economic value of it being exploited. We don't need more superfund sites here in the US.
Upvote
5
(5
/
0)
the beatles had a song along the line of "the taxman will tax the air you breathe"
its coming to your neighborhood sooner than you might think
whats egregious is how arrogant humanity has evolved into assessing anything for its own survival context.
its coming to your neighborhood sooner than you might think
whats egregious is how arrogant humanity has evolved into assessing anything for its own survival context.
Upvote
0
(1
/
-1)
He's thinking like a corp driven by a profit motive...
Upvote
2
(2
/
0)
As I quote:
Do you know what that's called? Regulation.
There is nothing new here. You see the tragedy of the commons every day, because not all resources are able to facilitate collaborative behavior, and not all scales of externalities are amenable to collective allocation. People will never collectively decide to not pollute the air or emit greenhouse gases, because the partial consequence of their actions are immeasurably small compared to the profits.
But, of course, we don't see companies dumping toxins into the water supply without consequence, at least not in the developed world. Because we've developed models to analyze and quantify the detriments of such things and legal systems and regulatory bodies to enforce punishments as needed. If you want regulations, you need laws, models and hard numbers.
Upvote
13
(14
/
-1)
Let me know when the UN manages to get a team into China to make an "assessment"
WHO could they call to help with this ?
WHO could they call to help with this ?
Upvote
-10
(3
/
-13)
this is like most other issues, nothing will actually change until substantial NUMBERS of people start to die.
as humans slowly undermine the beautiful planet (even as cold reality may have it) all life depends on, the slow ominous effects of our manipulative, destructive search for easy living, will eventually come back and smack us.
& don't count on 'god' to intervene either, figments of imagination have helped keep the truths well concealed, humans ignorant and fearful of change.
as humans slowly undermine the beautiful planet (even as cold reality may have it) all life depends on, the slow ominous effects of our manipulative, destructive search for easy living, will eventually come back and smack us.
& don't count on 'god' to intervene either, figments of imagination have helped keep the truths well concealed, humans ignorant and fearful of change.
Upvote
-1
(1
/
-2)
Chilean here. That's Torres del Paine, in the chilean patagonia. Nice to see such a pristine place in a Ars Article.
If any of you enjoy trekking, there's a beautiful trekking path in the park.
If any of you enjoy trekking, there's a beautiful trekking path in the park.
Upvote
13
(13
/
0)
VelvetGlove
Ars Tribunus Militum
Status quo is that natural areas have zero intrinsic value. How is assigning a value higher than zero going to increase destruction?
This seems more like an accounting method for governments to keep track of their resources than an actual exchange of funds. For instance, a cost-benefit analysis when deciding to whether auction permits for public land use.
Upvote
6
(6
/
0)
As with most developing countries, the UNDP engages in a variety of programs in China targeted at things like philanthropy, poverty reduction, infrastructure and environmental protection.
I worked on several of those programs, and a few other ones in Thailand, Cambodia, and Indonesia.
Upvote
2
(2
/
0)
Fancy Internet Person
Ars Praefectus
It appears that this step is a lateral or neutral move.
Perhaps it could be turned to good ends, but it isn't off to a good start.
The notion of Natural Capital is promoted for and by CEOs and CFOs as an alternative to the natural commons.
Likewise, Martin Lok works for the Dutch Ministry of Economic Affairs and Climate Policy, which is a business promotion ministry. That department is fighting valiantly -against- doing any climate policy https://en.m.wikipedia.org/wiki/State_o ... Foundation and has spent the last 7 years in courts to not do anything on emissions standards.
It is not a promising start.
Upvote
7
(7
/
0)
I hope you're right. I expect this is only to allow governments to justify increasing property taxes.
Upvote
0
(0
/
0)
Fancy Internet Person
Ars Praefectus
Hardin did not call for regulation but, literally, privatization.
I do not trust this band of CEOs and regulators-who-do-not-wish-to-regulate.
Upvote
0
(2
/
-2)
Considering that the Dutch have expanded their country by filling in the oceans, I'm not sure why you think they'd care about any other country's climate policies.
Upvote
-1
(2
/
-3)
They would need to mount up first: Nate Dogg and Warren G taught me that.
Upvote
2
(3
/
-1)
VelvetGlove
Ars Tribunus Militum
If done correctly, it will only increase property taxes on properties that had the natural landscaped stripped in order to build them. The aggregate effect would be to cause more building to occur in previously-built areas. Expected result: less suburban sprawl, less urban blight.
Upvote
6
(6
/
0)
when i get time with my bucket list, i'll walk south for 4000+ or so miles and enjoy the view in person.
Upvote
0
(2
/
-2)