2.2 Economic valuation: towards ecological economics
The blue whale could have supplied indefinitely a sustainable yield of 6000 individuals a year.
This is one of the earliest references to sustainability in the literature, taken from the 1971 edition of the science journal Nature (cited in Senge et al., 2006, p. 45). Here, the blue whale is given instrumental value – a means of measuring not the survival of the blue whale for its intrinsic value, but rather the economic survival of the blue whale industry.
The economic dimension of sustainable development has since increasingly focused more on the valuing of non-human nature, and in particular generating some expression of intrinsic value. The challenge for economists has been in attributing some kind of monetary. Figure to the intrinsic value of nature so as to guide responsible policy and action. Economics typically generates value from nature by regarding it as resource assets. In the domain of natural resource policy, decisions are then centred on whether to conserve these assets – which might be regarded as an appreciation of their intrinsic value – or exploit them for human and/or social development.
Countries subject to abject poverty would almost certainly give priority to using their resource assets for economic development, even if this is at the cost of conserving the natural environment. A fairly widely shared perspective is that the rich, advanced industrial countries (AICs) owe it to poorer, less developed countries (LDCs) to assist in environmental conservation, given that AICs have contributed significantly to global environmental degradation.
The terminology of AIC and LDC is equivalent to the concept of the North–South divide as developed for the Brandt Report in 1980 (Figure 5), expressed more recently in terms of global North and global South.
The cost of conservation is not only measured in terms of the implementation costs of conservation strategies. From the perspective of LDCs, there are ‘opportunity costs’ measured in terms of the reduced economic development that results from not exploiting the natural resources. Natural resources provide a particularly significant source of wealth for many LDCs. Exploitation of these resources is instrumental in creating much-needed economic wealth and development.
From an ecological modernisation perspective, the conflict between AICs’ emphasis on conservation and LDCs’ emphasis on development might be resolved through AICs supporting environmental production initiatives in LDCs. For example, investments might be made in bioprospecting – searching for broader uses of the range of wildlife resources rather than focusing on a single resource (such as ‘land’, which is often simply reclaimed for agricultural production) – or ecotourism (non-consumptive use of natural resources). But in the context of a less developed country, would this be enough to compensate for the lost opportunities for other forms of economic development? Box 6 explores these ideas in more detail.
Box 6 The price of biodiversity
Although situations exist in which bioprospecting, collection of nontimber forest products, and ecotourism generate earnings that can motivate conservation, these situations are the exception rather than the rule. And even when such activities provide some incentives for conservation, they typically do not provide sufficient incentives.
The reality is that these entities cannot be counted on to finance widespread conservation. Only well-to-do people in the industrial world can afford to care more about preserving biodiversity in the developing world than the residents there. Perhaps in some cases local economic activities will help reduce the rate of biodiversity loss. But to stem that loss globally, we must, in the short run at least, pay people in the developing tropics to prevent their habitats from being destroyed. In the long run, they will be able to act as strong stewards only when they too earn enough money to care about conservation.
(Source: Simpson, 1999)
Activity 7 Paying for intrinsic value
I shall be returning to issues of ecotourism later in the course. For now, note down your response to the argument expressed by Simpson in Box 6. What scope do you think there is for furthering development in an economically poor country, whilst at the same time retaining natural areas for their intrinsic value?
The argument put forward in Box 6 reflects a wider perspective on the value of economics in addressing environmental issues. Simpson’s implicit claim is that only through placing economic value on environmental assets associated with modernisation is it possible to practise environmental conservation. An opposing view is that placing purely economic values on environmental assets reinforces first, the economic divide between rich and poor (since the poor are prohibited from fulfilling the type of exploitation of nature previously enjoyed by the rich); and second, the very type of anthropocentrism that is at the root of many environmental problems. The need, therefore, is to explore alternative, less anthropocentric ways of valuing nature to reflect intrinsic value. The ethical issues surrounding this debate are captured in a corresponding debate between environmental and ecological economics.