Creating Self-Sustaining Markets for "Environmental Capital"

Article excerpt

How much, in dollars and cents, is the environment really worth?

No, this isn't an article about some bean counter who has found a clever way to put a price tag on sea otters or redwoods. Nor, for that matter, is it a tree-hugger's essay on the ineffable value of spaceship earth. Rather, it's about the pioneering efforts of some practical ecologists who are eager to make common cause with economists to create self-sustaining markets for "environmental capital."

The idea, explains Gretchen Daily, a biologist at Stanford University and the editor of Nature's Services (Island Press), is "to assess what we know about the tangible value of environmental resources" like watersheds and pollinating insect species. That, she argues, should set the stage for creating revenue-producing institutions -- public or private -- that make it profitable to invest in environmental resources, much the way one invests in physical infrastructure. Ask your typical environmental activist how much a first-growth forest should sell for and you're asking for a fight. After all, there's much more to a stand of ancient trees than their value for recreation and lumber. But the reflexive answer, that first-growth forests (or endangered species or pristine air over the Grand Canyon) have value beyond measure, is no answer at all. "Whether we know it or not," Daily argues, "we set implicit values" by choosing to preserve some portions of the environment and letting others disappear through neglect or economic development. So Daily, who has hugged a tree or two in her day, favors a less confrontational strategy. The authors of Nature's Services, which was largely underwritten by the Packard and W. Alton Jones Foundations and the Pew Charitable Trusts, lay out the basics of how big ecological systems protect everyday human activities and, in particular, how relatively small changes can cause devastating losses. "There are big-time non-linearities here," confirms Donald Kennedy, a former commissioner of the Food and Drug Administration and a contributor to the book. But the nitty-gritty of Nature's Services consists of a dozen overview essays on the tangible value of services from various sorts of environmental capital. Gary Nabham of the Arizona Sonora Desert Museum and Stephen Buchmann of the Department of Agriculture survey research on insect pollination, finding that the substitution of domesticated pollinators for wild pollinators would reduce the value of 62 crops in America by $1. …