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The Value of Nature

2011/12/20

As the saying goes, money makes the world go ’round.  Except, when we look at the environment, you could make the argument that the dollars aren’t being added up honestly.  For example, we always hear how fossil fuels are less expensive than renewable sources of energy.  However, the cost we currently pay for fossil fuels is artificially low because of the subsidies that governments around the world give to oil, natural gas and coal industries (which are six times greater than subsidies to renewable sources of energy).

The cost of fossil fuel also doesn’t take into account the “externalities” associated with burning fossil fuels, externalities being the cost of something that is not reflected in its price.  Some of the externalities of fossil fuels include health care costs directly associated with air pollution, the cost total cost of oil spills (including cleanup and the loss of fishing and tourism revenue), damage caused by acid rain, and the big one, the economic impact of climate change.

We have the same “false economy” problem when we look at the preservation of natural ecosystems.  When a factory pollutes a river or a forest is burnt down to create farm land, we justify it by saying that the activity will ultimately create revenue.  However, that argument assumes that a clean river or a healthy forest has no value.  Well, that simply isn’t true.  That river is carrying nutrients to the ocean down stream.  Once in the ocean, those nutrients will feed the ecosystem that produces the fish that we eat.  And that forest is capturing and sequestering CO2 while also putting out oxygen.  You know, that stuff that we breath.  The forest is also absorbing huge amounts of water, preventing floods and stopping soil erosion.

So, how much is nature worth?  Well, I came across a 1997 Nature article (Nature_Paper-2) that concluded that the value of the services done by nature is, on average, $33 trillion dollars a year (a “minimum estimate” according to the paper’s authors).  In 1997, total international GDP was $18 trillion dollars a year!  In other words, nature works twice as hard as we do!

The whole point of this post is to show you the video that is below.  It is a TED talk done by economist Pavan Shukhdev about putting a value on nature.  Basically, it’s what I’ve just rambled on about for the past 400 words, but done by a profession economist with a great accent!  Please, take a look by clicking here.  (My attempts to embed the video failed… sorry!)

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2 Comments leave one →
  1. 2011/12/20 1:23 pm

    Economic value of nature is huge, saw the same Tedtalk yesterday, a great explanation of the externalities. Hope more orgs begin to realize them as well.

  2. 2012/01/01 2:22 am

    WordPress uses “” for ted videos. Not sure if it works in comments:

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