A free-market energy blog
Random header image... Refresh for more!

Environmentalists Question Commodification (Part II)

“Payment schemes also risk creating perverse incentives…. If the system pays landowners to bank carbon, they may plant non-native species, or genetically ‘improved’ trees to bank carbon faster. Or they may discourage natural phenomena that happen to be good for biodiversity but bad for people, including such ecosystem disservices as fire, drought, disease, or flood.”

Just as there are supporters of this relatively new way of looking at environmental decision-making–commodification–there are also critics. I include myself among them.

Some environmentalists argue that ecosystems or their constituent parts with intrinsic value does not mean they should be priced and treated as economic goods. By stressing the market value of ecosystem services, should those values be exceedingly difficult to calculate, or come in at a lower-than-expected value, it will be easier for those pushing more intensive human intervention in the ecosystem to win the day in the policy field. Such politicization, as in other fields, will have unintended consequences.

Kent Redford and William M. Adams catalogued a host of ways that ecosystem service arguments could go wrong. As Richard Connif noted in Conservation Biology, Redford/Adams powerfully focus on price:

Traditional conservationists sought to protect forests and other landscapes primarily for their intrinsic value, says Redford. But those values are likely to carry less weight when even conservationists think first in economic terms. Many ecosystem services are also likely to be hard to price — for instance, the arguably beneficial effects on climate and agriculture (minus the deleterious impacts on health) when atmospheric dust from the African Sahel drifts across the Atlantic.

And even if you can put a price on an ecosystem service, Redford and Adams argue, figuring out who has a legitimate right to sell it means picking winners and losers. In developing countries, indigenous communities may lack the documentation or the political clout to assert their ownership.

Payment schemes also risk creating perverse incentives, Redford and Adams warn. If the system pays landowners to bank carbon, they may plant non-native species, or genetically “improved” trees to bank carbon faster. Or they may discourage natural phenomena that happen to be good for biodiversity but bad for people, including such ecosystem disservices as fire, drought, disease, or flood.

Such gaming would create a backlash from neutral observers who would naturally become suspicious of government efforts to protect the environment, ultimately undermining other, more basic environmental-protection goals.

Others place more emphasis on the equity arguments hinted at in Redford’s quote above and also focus on perceived problems within the institutions which will be establishing the prices and markets. Erik Go´mez-Baggethun and Manuel Ruiz Pe´rez, argue that the process of the economic valuation of nature ignores institutional setup in which environmental policy and governance is currently embedded and the broader economic and sociopolitical processes that have governed the expansion of pricing into previously non-marketed areas of the environment.

On their view, increased commodification of ecosystem services is likely to be counterproductive for biodiversity conservation and equity of access to ecosystem services benefits.

1 comment

1 Andrew { 07.12.13 at 10:33 am }

“In developing countries, indigenous communities may lack the documentation or the political clout to assert their ownership. ”

This is very true and a bigger problem that many tend to overlook.

Leave a Comment