Putting a price tag on nature

Issues in Science and Technology, Winter 1997/1998 by Kenneth Richards

Putting a price tag on nature Nature's Services: Societal Dependence on Natural Ecosystems, edited by Gretchen C. Daily. Washington, D.C.: Island Press, 1997, 416 pp.

Kenneth Richards

The contributors to Nature's Services, who include many of the nation's leading natural scientists, have taken on the enormous tasks of, first, characterizing the ways in which Earth's natural ecosystems confer benefits on humanity and, second, making a preliminary assessment of their value. They do a fine job of accomplishing the first but make a mishmash of the second.

Most of the individual contributions to Nature's Services catalog and describe the services provided by some part of the natural world, how mankind relies on that subsystem or service, and what the human population is doing to degrade or threaten the very service on which it relies. The picture that emerges is one of a marvelously complex, interwoven, and perhaps fragile biogeochemical dance that supports life.

Some of the chapters focus on the overarching services provided by natural systems. For example, in their review of the ecosystem services supplied by soil, Gretchen Daily, Pamela Matson, and Peter Vitousek start by describing the complex process of soil formation and the importance of soil in retaining nutrients and providing physical support for plants. Gary Paul Nabhan and Steven Buchmann draw a complex portrait of the pollination process and make clear the potential consequences of the decline of key pollinators such as wild and captive honeybees. Other chapters examine the range of services provided by major biomes, including marine and freshwater ecosystems and forests. And some chapters give case studies. For example, Andrew Wilcox and John Harte focus on a specific place-Gunnison County, Colorado-and the ecosystem services on which the county relies.

A variety of preliminary assessments of the values of ecosystem services are made. For example, Daily, Matson, and Vitousek estimate the value of key soil functions to crops at $850,000 per hectare, or the cost of modern hydroponic systems in the United States. They also estimate the total value of natural nitrogen fertilization on all land at $320 billion per year, which is based on the cost of artificially supplying nitrogen fertilizer for all land plants after subtracting the amount supplied anthropogenically.

Flawed analysis

Unfortunately, the book encounters serious difficulties as it moves from description to analysis. Although the chapter by Larry Gould and Donald Kennedy does a fine job in laying out the economic principles that could help establish a meaningful basis for the valuation of natural services, most of the other authors write as if they hadn't read it.

One of the most confusing aspects of the book is the absence of a baseline for the analysis. Daily's introductory chapter challenges the reader to imagine a colonization of the Moon and all of the natural systems that would have to be transplanted or otherwise imitated. This suggests that the baseline against which comparisons will be made for the "total value" calculations is total loss of ecosystem services. Indeed, the chapter on soil, Norman Myers' chapter on forests, and the chapter by Sandra Postel and Stephen Carpenter on freshwater ecosystems seem to adopt this approach. Although the premise at least is clear, the result is not particularly interesting: After all, the complete loss of any one of those services/ecosystems could lead to the demise of humanity, with an implicit infinite cost. In other chapters, the authors apparently prefer a big number to the biggest number, so they each offer estimates that are significant percentages of gross world product but far short of infinite. In effect, they adopt some other baseline against which to compare the value of present services but fail to identify that baseline. In fairness, not all of the authors fall prey to this floating baseline trap. Nabhan and Buchman clearly state that their assessment of the value of pollination services by animals is derived "by comparing the yield (loss) of the crop in the absence of these animals with the yield in the presence of the pollinators."

A second key problem is that the book largely fails to focus on the crucial issue of marginal rather than total costs, despite Daily's admonition in her introductory chapter. "As a whole ecosystem services have infinite use value because human life could not be sustained without them," she writes. "The evaluation of the tradeoffs currently facing society, however, requires estimating the marginal value of ecosystem services (the value yielded by an additional unit of service, all else held constant) to determine the costs of losing-or benefits of preserving-a given amount or quality of service."

Why, then, is this message often ignored throughout the balance of the book? One can imagine at least two reasons. First, the siren call of large numbers is too powerful to ignore, especially to those who may have a political agenda. The estimate by Osvaldo Sala and Jose Paruela that conversion of lightly grazed pastureland into cropland causes release of carbon dioxide potentially valued at $200 per hectare simply does not have the pyrotechnic power of Rosamond Naylor and Paul Ehrlich's claim that in the absence of natural pest control services the entire market value of crops, $1.4 trillion, would be lost.