How much is a forest worth? What is the true economic value of the ocean? Can you buy a mountain forest or a glacial meadow with money? More importantly, can such calculations save the planet, or are they simply selling rapidly deteriorating nature to the market?
On the final day of the World Summit of Legislators in Mexico City, the Global Legislators Organisation (GLOBE) released a study on natural capital accounting, the first comprehensive report to compile 21st-century legislative policies and calculate the monetary value of natural resources. This study defines natural capital as encompassing every natural product, from ecosystems, solar energy, and mineral deposits to fossil fuels. Starting from the highly negative environmental impacts of human activities, it argues for the "urgent need to develop effective measurement methods to calculate natural capital and incorporate them into relevant legislative and policy frameworks."
The research findings are quite startling. For example, Peru's natural capital accounting focuses on economic value; the Peruvian Ministry of the Environment (MINAM) found that "in 2009, certain ecosystem services, converted into monetary value, amounted to as much as 15.3 billion patacas." Of this, water resources and energy accounted for 2.5 billion patacas, agriculture, forestry, and livestock for 8 billion patacas, and fisheries for 864 million patacas. Natural capital exports in 2009 earned Peru 9 million patacas. "Ecosystem services are the foundation of production in various industries such as fisheries, agriculture, manufacturing, tourism, and medicine; therefore, the fragility of ecosystems is a matter of considerable concern," the report states.
According to the 2014-2015 Action Plan for Energy Conservation, Emission Reduction and Low-Carbon Development previously released by the State Council, proponents of natural capital accounting believe that the system can guide government decision-making and encourage the sustainable use of natural resources in the next two years. However, some argue that calculating "natural assets" is tantamount to moving towards the complete commodification of Earth's resources.
Vandana Shiva, founder of the Indian Foundation for Science, Technology and Ecological Research and an environmental activist, said, "Assessing natural ecosystem services and functions is a double-edged sword." While understanding the value of healthy and stable ecosystems is necessary and positive for local communities, "it's wrong to reduce complex systems with multiple functions to a single function that can be misappropriated and traded. After all, the currency of life is life itself, not money."
Uttarakhand, which recently became the first Indian state to calculate its Environmental Gross Product (GNP), is a prime example. Nestled against the Himalayas, Uttarakhand boasts lush valleys and alpine meadows, making it India's greenest state. Despite plans to cut down forests for development, it still retains nearly 60% of its forest cover.
According to GLOBE research, numerous reports estimate the land here to be worth approximately 5 to 7 billion rupees annually. However, to ease development restrictions, the central government provides Uttarakhand with a 300 million rupee "green allowance" per year in exchange for its fertile land. Shiva says this allowance ignores the environmental pressures of deforestation and glacial melting in Uttarakhand, which caused deadly floods last year. Even the Indian Supreme Court has acknowledged that the state's destructive dam construction and hydroelectric projects exacerbated the disaster. This shows that "it's good if valuation can prevent destruction. However, when value becomes price, it's tantamount to rationalizing destruction."
Sources: Reuters (2014-06-17)
