Economists grapple with putting price-tags on nature
Wealth is not all about GDP or even social benchmarks - nature's contribution to our well-being must also be taken into account.
This was the recurring theme of a conference hosted by the Royal Society in London this week.
Opening the conference presentations, Integrating ecosystem services into biodiversity management, Cambridge economist Sir Partha Dasgupta outlined the concept of natural capital.
While this may sound a little fluffy and vague – how, after all, does one put a numeric value on a blue whale, for example – the eco-economists are not simply talking about the aesthetic and spiritual value of nature but also how it benefits us in tangible financial terms.
They are attempting to assess the value of materials harvested from nature, for example, or of the services providing by ecosystems in cleaning water or purifying the air.
He said in rural parts of developing countries, there is still that direct and immediately apparent dependence on nature and its resources, and our detachment from this in the industrialised world doesn’t really diminish that dependence.
“If you’re a villager in Sub-Saharan Africa or South Asia, nature is of direct value to you,” he said.
“Development economists have simply forgotten that nature is acting out there, in village life.”
He described the worth of these natural services as a ‘shadow value’ that should be taken into account when trying to chart an economy’s progress.
He described how he had used the crude figures available to roughly map the progress of parts of the developing world from 1970 to 2000 taking into account their natural capital.
In many cases, while there may have been slight financial gains, people were worse off due to a loss of natural capital.
China had bucked this trend, with its rapid economic growth outstripping the decline in natural assets to bring a better standard of life.
While the idea of natural capital has been around for many years, its importance is now becoming recognised by the mainstream said Prof Dasgupta.
Fellow speaker Neville Ash, of the IUCN, summed it up saying: “Wherever you live in the world, whoever you are you’re utterly dependent on ecosystem services for your livelihood.”