ENVIRONMENT: Developing Wild Lands a Bad Investment – Study

By Stephen Leahy Reprint | | Print |

Stephen Leahy

BROOKLIN, Canada, Oct 11 2002 (IPS) - The economic value of preserving natural ecosystems far outweighs the value of converting these areas to farmland, housing or other human uses, according to a recent study.

The high value of wild nature has nothing to do with potential eco-tourist dollars but with the vital ”goods and services” these areas provide. Among other uses, they: filter water, clean air, regulate climate, create soil, and provide an opportunity to sustainably harvest wild plants and animals, says the study published in the journal Science.

Its authors say economists have only now begun to calculate the value of these services.

”We’ve been cooking the books for a long time by leaving out the worth of nature,” said Robert Costanza of the Institute for Ecological Economics at the University of Vermont.

”Every year we continue to convert habitat, it’s costing us 250 billion U.S. dollars, over any profit that comes from development.”

Costanza and 18 colleagues from Britain and the United States compared the difference in the economic value provided by relatively intact ecosystems with the converted versions of those ecosystems.

”We concluded that there is at least a 100-1 global benefit-cost ratio to maintaining wild nature instead of developing it. None of us guessed it would be that high,” Costanza said.

The study documents many specific examples. In Thailand, converting a mangrove ecosystem to aquaculture only made sense in the short-term, but not once external costs were factored in.

When the estimated value of the original mangrove cover’s ‘goods and services’ – providing timber, charcoal, non-timber forest products, offshore fisheries, and storm protection – was factored in, the total estimated value of intact mangroves was 70 percent higher than when the area was converted for shrimp farming.

Researchers also compared the overall value of low-impact logging in Mount Cameroon, Cameroon, with the value of the same area when converted to small-scale farming or oil palm and rubber plantations.

They found that conversion resulted in negative private benefits, once the effect of market distortions – such as protective tariffs, subsidies and tax allowances – was removed.

Social benefits, sedimentation control, and flood prevention were highest under sustainable forestry. Global benefits, from carbon storage, were also higher.

Overall, the researchers found that sustainable forestry provided greater total economic value while plantations had a negative total economic value.

The study also revealed that destructive environmental techniques, such as dynamite fishing in Philippine reefs, provide local people high initial benefits but they were far less than the long-term benefits of sustainable fishing.

The social benefits of sustainable exploitation – through tourism and protection of the coastline – were also lost after the reefs were dynamited. As a consequence, retaining an essentially intact reef was worth almost 75 percent more than using it for destructive fishing, the study concluded.

These findings apply in the North as well. The study cites a project in Canada that converted freshwater marshes into one of the country’s most productive agricultural areas. The study team calculated that the area would be worth about 60 percent more if the wetlands were maintained for the social benefits of hunting, trapping and fishing.

”In every case we looked at,” said conservation biologist Andrew Balmford of the University of Cambridge, England, ”the loss of nature’s services outweighed the benefits of development, often by a large amount”.

Pricing nature’s goods and services is difficult, since they include items that are not bought and sold as part of a market-driven, conventional economy. Also, in the past, converting lands into highly productive food lands or into cities has benefited society as a whole.

The difference now, says Costanza is that we are running out of nature. What is left has a higher value but is ignored by traditional economics. For example, no one collects money from those who benefit from the flood control provided by a wetland or the nutrient recycling and pollutant removal done by forests.

While landowners make real money when they convert wild lands, local communities and society as a whole bear the substantial losses. Lack of information about the economic worth of ecosystems, the failure of markets to capture and value their functions, and tax incentives and subsidies that encourage land conversion all contribute to continued habitat destruction, write the Science authors.

”We need to tackle all three of these, and there’s no reason not to tackle all three at once. However in terms of immediate ‘bang for buck’, directly challenging subsidy schemes is a good way to improve both economic efficiency and the environment," says Balmford.

Since the 1992 Rio summit, the Earth has lost an astonishing 11.4 percent of its wild lands. No one has yet estimated the real costs of this loss.

ENVIRONMENT: Developing Wild Lands a Bad Investment – Study

By Stephen Leahy Reprint | | Print |

Stephen Leahy

BROOKLIN, Canada, Oct 11 2002 (IPS) - The economic value of preserving natural ecosystems far outweighs the value of converting these areas to farmland, housing or other human uses, according to a recent study.
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