Can you put a price on a tree? How about a babbling brook? Or an unspoiled mountain vista?
It turns out you can—and this is not a Mastercard commercial. Early this morning at the Nagoya meeting of the Convention on Biological Diversity (CBD), the United Nations released The Economics of Ecosystems and Biodiversity (TEEB) study, one of the most wide-ranging attempts to accurately gauge the value of the natural world—and the economic damage that can result from the loss of biodiversity, clean air and water and wildlife habitat. According to the study—led by Pavan Sukhdev, seconded from his day job with Deutsche Bank—the world is losing $2 to $4.5 trillion worth of natural capital each year, thanks to pollution, deforestation, farming, industry and climate change. A few excerpts from the report show how Sukhdev and his colleagues put a price on what might seem priceless (download a PDF of the report here):
US$ 50 billion
The annual loss of opportunity due to the current over-exploitation of global fisheries. Competition between highly subsidized industrial fishing fleets coupled with poor regulation and weak enforcement of existing rules has led to over-exploitation of most commercially valuable fish stocks, reducing the income from global marine fisheries by US$50 billion annually, compared to a more sustainable fishing scenario (World Bank and FAO 2009).
Euros 153 billion
Insect pollinators are nature’s multi-billion dollar providers. For 2005 the total economic value of insect pollination was estimated at Euros 153 billion. This represents 9.5% of world agricultural output for human food in 2005. (Gallai et al. 2009)
US$30 billion – US$172 billion
The annual value of human welfare benefits provided by coral reefs. Although just covering 1.2% of the world’s continent shelves, coral reefs are home to an estimated 1-3 million species including more than a quarter of all marine fish species. (Allsopp et al. 2009). Some 30 million people in coastal and island communities are totally reliant on reef-based resources as their primary means of food production, income and livelihood. (Gomez et al. 1994, Wilkinson 2004) Estimates of the value of human welfare benefits provided by coral reefs range from US$30 billion (Cesar et al. 2003) to US$172 billion annually (Martinez et al. 2007)
It goes on from there. While it’s easy to quibble with the exact figures cited by the TEEB report—after all, there’s no stock market for coral reefs, no quarterly earnings report for insect pollinators—the real value in the exercise is in making visible the “invisible” value of the natural world, as Sukdhev told reporters in Nagoya:
Unfortunately, the lack of an economic lens to reflect these realities, has meant that we have treated these matters lightly, that they are not center-stage when it comes to policy discussions nor center-stage when it comes to business discussions.
The TEEB effort fits with a broader change in the global conservation movement—one that moves attempts to merge the environment with economics. Partially that’s a reflection of the larger triumph of economic thinking, the kind that has our daily mood regulated by unemployment and GDP growth figures. It’s also a result of the changing nature of those in positions of power in environmental and conservation groups. Board members are now likely to come from the financial sector—people like Larry Linden, the Goldman Sachs alumnus who runs the Linden Trust and is the co-chair of the board for the World Wildlife Fund. And climate change—which practically has its own currency in carbon dioxide—is an economic problem masquerading as an environmental threat, one that could be solved with carbon markets.
But the real evolution is how environmentalism looks at people. I had an interesting discussion recently with a Brazilian businessman who has gotten involved in environmental work. Americans may think of Brazil (on non-World Cup years) as the land of the Amazon rainforest, wild and untamed and under threat. But the country of 191 million is also the undisputed economic titan of Latin America, with a $1.58 trillion GDP growing at over 5% a year. It’s still a country of favelas and extreme urban poverty, but it’s also becoming an agriculture and industrial superpower, with a growing middle class that wants TVs, cars and computers—and they won’t be denied. The Brazilian businessman told me that he doesn’t like to use the word “conservation”—”conservation makes people think they have to do without, to do with less, and people here aren’t willing to accept that.” Instead he prefers the term “sustainability”—”it means we can still grow, but we have to do so in a wise way.”
That might sound like semantics, but the reality is that the billions in the developing world who want a better life will not be held back—and they’ll need more energy and more natural resources. They have a right to tap into the natural capital that helped make developed nations rich. The benefit of TEEB’s approach—identifying the economic value of ecosystem services—is that it can show how nature really does underpin prosperity, and demonstrate that there are financial reasons for preserving biodiversity and reducing the waste of the natural world. Of course, translating natural economics into practice won’t be easy—the struggle to institute REDD (Reducing Emissions from Deforestation and Forest Degradation), which would put a price on the carbon contained in standing forests, makes that clear. But you can’t save what you don’t measure—which is why it’s high time to put a price tag on nature.
More from TIME on ecosystem services and biodiversity: