The Price of Biodiversity

By Simpson, R. David | Issues in Science and Technology, Spring 1999 | Go to article overview

The Price of Biodiversity

Simpson, R. David, Issues in Science and Technology

Poor nations lack the economic incentive to preserve biological resources; rich nations will have to pick up the bill.

Dismayed that their pleas to save the world's biological diversity seem to be falling on deaf ears, conservation advocates have turned to economic arguments to convince people in the poor nations that are home to much of the world's biological riches that they can profit through preservation efforts. In the process, they are demonstrating the wisdom of the old adage that a little knowledge can be a dangerous thing. Too often, the conservationists are misunderstanding and misapplying economic principles. The unfortunate result may be the adoption of ineffective policies, injustices in allocating the costs of conservation, and even counterproductive measures that hurt the cause in the long run.

When it became clear that the private sector in developing countries was not providing sufficient funds for habitat preservation and that international donors were not making up the shortfall, organizations such as Conservation International, the International Union for the Conservation of Nature, and the World Wildlife Fund began to develop strategies intended to demonstrate how market forces could provide an incentive to preserve biodiversity. Three mechanisms are often employed. Bioprospecting is the search for compounds in animals and plants that might lead to new or improved drugs and commercial products. Nontimber forest products are resources, such as jungle rubber in Indonesia and Brazil nuts in Brazil, that have commercial value and can be exploited without destroying the forest. Ecotourism involves the preservation of natural areas to attract travelers.

Although some of these initiatives are undoubtedly worthwhile in certain locales, and all of them can be proposed in a way that makes it appear that they will serve the dual purpose of alleviating poverty and sustaining natural resources, a number of private and public donors have spent millions of dollars supporting dubious projects. They have often been funded by organizations such as the World Bank, Inter-American Development Bank, Global Environmental Facility, the European Community, and the U.S. Agency for International Development, as well as by the development agencies of a number of other nations and several private foundations. Others are spending money to help local governments, such as Costa Rica, market opportunities for bioprospecting, nontimber forest products, and ecotourism. In many instances, the money might be better spent in efforts to pay for the conservation of biodiversity more directly.

When these programs violate basic economic principles, they are destined to fail and to waste scarce conservation money. Failures will also weaken the credibility of conservationists, who would do better to take a different approach to promoting the preservation of biodiversity.

What local people value

The most fundamental economic principle being violated is "You get what you pay for." Certain proposals aim to preserve habitat in poor regions of the tropics without compensating the local people for the sacrifices inherent in such protection. For example, poor people in developing countries are felling their rain forests in order to generate much-needed income. A proposal to stop this activity without substituting an equivalent source of revenue simply won't fly. Another troubling aspect of strategies intended to convince local people to change their behavior is that they are often based on the patronizing notion that local people simply haven't figured out what is in their own best interests. More often, the advocates of purportedly "economic" approaches haven't understood some basic notions.

A weakness common to many of the arguments is a poor understanding of the distinction between total and marginal values. The total value of biodiversity is infinite. We would give up all that we have to preserve the planet's life-support system. …

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