Valuing Natural Capital

And Selling your Mother – The Remix!

“An ecosystem might be likened to a great biological machine, perhaps. If this analogy is pursued, humanity must be seen as part of the machine. No doubt an important part – an engine, a key circuit – but in no case apart from the mechanism, as is often fallaciously assumed.”

 Haviland Tuf (George R. R. Martin)

This post represents a catch up and re-mix of an idea we published just over a year ago on the growing agenda of natural capital and ecosystem valuation – and our recent framing of the idea as a short animated film. Enjoy!

Natural capital makes the world go round

The idea of pricing the value we get from ecosystems, literally pricing the Earth, has been with us for a couple of decades – famously highlighted (though not absolutely originated) by Robert Constanza in 1987 – whose research found that the value of the Earth to humanity was $33 trillion annually.

The area has been gaining significant momentum with the development and rise of the classification of ecosystem services and the emergence of natural capital accounting approaches and payments for ecosystem services. Environmental and ecosystem products have started trading on international markets and high level conferences such as the World Forum on Natural Capital are popping up like mushrooms overnight.

Fundamental dependencies indicate a value hierarchy

Using a comparable metric like money as a way to put things on a level playing field makes sense, but only up to a point. Such an approach would be fine if the things we were comparing were truly comparable. However, the environment is something you can’t do without.

There is a dependency relationship. Put simply, there is no money without human beings capable of inventing and using it. There are no human beings without food, air and water.

If you can’t measure you can’t be bothered…

The logic of ecosystem valuation is motivated by the idea that we need to value and price the contribution that our economy gets from the natural world; once that value is identified, it can be considered and balanced alongside other priorities.

Value implies price, price implies sales, and sales imply markets — if we are not careful we will reduce everything to money and lose sight of the real value we started with.

The idea that: ‘If we can’t measure it we can’t manage it’ pervades much of our current ways of prioritising activity. However, there are many cases when it simply does not either apply or help.

For instance, how do you quantify the love you feel for your children, your parents or partner? You don’t. You know the value without needing to know the quantity. Finding an exact figure is irrelevant, pointless and borderline offensive.

In essence the trouble with pricing the priceless is that it implies fungibility (economic “swap-ability”); by putting a price on your mother, you are essentially saying that you’d be equally happy with a different one that cost the same.

Valuing the invaluable

Breaking down the value of your mother into monetary amounts based on individual benefits she brings to your life will ultimately sorely undervalue her; such is the dilemma presented by the move towards valuing ecosystem services.

August 2014: Some of the contents of this post were adapted for use in a discussion session on Guardian Sustainable Business, focusing upon the rights and wrongs of seeking to value natural capital. My input included a successful attempt to deploy the Selling your Mother metaphor and a failed attempt to link to this animation. The discussion involved such luminaries as Robert Constanza, Prof Lynn Crowe and Tony Juniper.