“Where ecological services need to be monetized, they likely will be. Where monetization is unlikely or virtually impossible, they probably don’t need to be brought into the cost benefit calculations of decision makers in the normal course of events. And attempting to do so might be viewed with suspicion and undermine support for the very environmental benefit one is attempting to foster.”
Defining ecosystems in general or a specific ecosystem in particular is a difficult endeavor.
As daunting a task as this is, it is no less difficult to establish a sound economic baseline for the entirety of the benefits that nature provides to mankind. Where ecological services need to be monetized, they likely will be. Where monetization is unlikely or virtually impossible, they probably don’t need to be brought into the cost benefit calculations of decision makers in the normal course of events. And attempting to do so might be viewed with suspicion and undermine support for the very environmental benefit one is attempting to foster.
To complete this four-part series, I provide illustrations about why spending public resources in an attempt to commodify ecosystem services is not worthwhile.
Fisheries
Years ago, I wrote a paper concerning the ocean fisheries. In it I considered three main ways of managing fisheries: Anarchy, government regulation, and establishing property rights.
I noted that originally most of the worlds’ resources were under the regime of anarchy, and this was okay when technology was primitive and populations were small, but as this began to change, property rights were developed in resources that proved critical in the face of growing populations with improved technologies for exploiting natural resources and for damaging said resources.
Applied to the fisheries, fish being a renewable resource, will replenish themselves, provided that they are able to reproduce in numbers that exceed the previous year’s losses from natural predation, disease, and fishing.
Nondepletable Resources
With this in mind, for most species, there is no need for management by humans at all. These usually fall into one of two groups. On one hand, there are many species for which there is no market demand, and which are therefore not subject to depletion through over-harvesting.
For example, almost all species of insect, vermin, and songbirds do not require conservation. Other examples include pigeons, feral pigs, possums, and coyotes. These animals are abundant, in many cases over-abundant, and do not depend for their continued survival on either government protection or private ownership.
In the sea, the vast majority of species fall into this category. In American waters, there are 959 fish stocks, but only around 130 of these are commercially valuable. The other species are under an anarchic system.
This only becomes a problem in four instances:
when fishers facing a decline in commercial fish stocks begin to exploit currently underused non-commercial stocks;
when by taking commercially valuable species, fishers disrupt the predator/prey relations in the marine ecosystem;
when non-regulated fish are caught (and die) in large numbers as a by-product of the process of commercial fishing; and
when fishing technologies harm the marine environment itself.
These problems aside, there are currently many species of animal for which humans do have uses, but which reproduce in sufficient numbers to replace themselves in spite of collection. For example, freshwater carp are popular food items in many parts of the U.S., and are taken in large numbers from waterways, especially in low-income areas.
However, carp are so abundant that they are considered by many anglers to be a nuisance. Another example is the nutria – a beaver-like rodent that is found throughout the Southeastern U.S. Although there is a market for nutria pelts and people also occasionally eat them, nutria are over-populating many rural areas. Neither government regulations nor private ownership is needed for carp or nutria.
For species such as these, and for watersheds, deserts and forests that aren’t stressed (or that’s key components aren’t threatened with extinction), there is little need for commodification or estimating the value of their environmental services.
Noneconomic Goods
As reported by Ronald Baily, Mark Sagoff has gone farther along this line of argument. Since prices result from scarcity, when total demand is satisfied with available supplies, there is no price. Since this is the case for many ecosystem services, Sagoff argues that markets correctly place negligible prices on natural capital and ecosystem services for water, timber, pollination, and biodiversity.
For instance nature’s hydrological cycle provides vastly more freshwater than humanity needs. We annually use about one-fiftieth of the amount that precipitates over land. In the aggregate, the hydrological cycle drops vast quantities of what is essentially distilled water on the land for free. Because it takes some expensive infrastructure to move water around, Sagoff does fail to acknowledge that local scarcities mean that water has a price.
For forests, the story is much the same. Agricultural and silvicultural productivity has increased so much that vast amounts of land has actually reverted to nature. Per Bailey, “In other words, human ingenuity continues to outpace and replace the relatively low productivity of natural capital. Temperate and boreal forests are expanding worldwide.”
Certainly insects provide vital ecological services including pollination—although most cereal crops are pollinated by the wind. Accounting for the fact that no one would hire someone with a bellows to blow pollen around in a Kansas wheat field since wheat farmers get all of the wind they need for free. Sagoff’s argument is that insect pollinators are essentially as ubiquitous as the wind. Where there is scarcity, however, markets have already arisen without the need for some grand-overarching effort to calculate the worth of ecosystem services.
Bees provide services for which orchard owners and farmers pay beekeepers an estimated $150 million per year and dung beetles provided $380 million in services to ranchers by burying cow manure in pastures.
Yet no one is paid for dung beetles, and there is no scarcity. Rather, all without government intervention or academic accounting, ranchers have ranchers have created “dung beetle Heaven, simply by populating their range with cattle. These creatures are “paid” copious quantities of cow manure for their work, just as pollinating insects are “paid” for their efforts with nectar from the flowers of fruits, vegetables, and nuts planted by farmers.
Finally, Sagoff points out that “No one has suggested an economic application…for any of the thousand species in the USA listed as threatened.” And while, the number of species listed as endangered or threatened with extinction at the U.S. Fish and Wildlife Service is 1319 species no one can claim that the economic value of many of these species is significant.
What is the economic use for the Peck’s cave amphipod, the Delhi Sands fly or the rock? If they disappeared, the world would be poorer in some spiritual or aesthetic sense perhaps, but as, biodiversity is ubiquitous from an economic or even ecological perspective, their passing would go largely unnoticed.
Conclusion
Defining ecosystems in general, or a specific ecosystem in particular, is daunting given the subjectivity of establishing a sound economic baseline for the entirety of benefits nature provides to mankind.
Where ecological services need to be monetized, they likely will be. Where monetization is unlikely or virtually impossible, they probably don’t need to be brought into the cost benefit calculations of decision makers in the normal course of events. And attempting to do so might be viewed with suspicion and undermine support for the very environmental benefit one is attempting to foster.