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Report turns "economy-versus-environment" argument on its head.

The current economic value of the world's ecosystem services far exceeds that of the global GNP, according to a landmark study - the first ever to undertake such a comparison. Robert Costanza of the University of Maryland's Institute for Ecological Economics and colleagues from around the world synthesized the findings of more than 100 studies to compute the average per-hectare value of each of 17 services that ecosystems provide. The result: nature provides about $33 trillion in services each year, compared with $25 trillion for the global GNP. The services measured include water supply, erosion control, waste treatment, climate regulation, pest control, pollination, and food production. For each, the per-hectare value was multiplied by the area of each of the world's 16 major biomes (open ocean, coastal, tropical forest, wetlands, cropland, etc.). The current value of all services and biomes were found to be in the range of $16 trillion to $54 trillion per year. The report was published in the May 15, 1997 issue of the journal Nature.

Attempts to place a monetary value on nature have been criticized by those who believe that such valuation commoditizes and cheapens what is in truth immeasurable. In practice, however, people regularly assign value to nature in the choices they make. The problem is that in normal practice nature is generally not valued unless it is converted to something. Forests, for example, are not assigned value except to the extent they are turned into timber. With a zero value, nature has almost always been the loser in standard economic equations. As the authors of the new study point out, "the decisions we make about ecosystems imply valuations (although not necessarily expressed in monetary terms). We can choose to make these valuations explicit or not...but as long as we are forced to make choices, we are going through the process of valuation." The study has raised eyebrows among some traditional economists, who are accustomed to keeping environmental values "external" to their calculations.

The reported estimate of $33 trillion may be conservative. Values for some biomes (such as mountains, arctic tundra, deserts, urban parks) were not included. Furthermore, the authors note that as ecosystem services become more scarce in the future, their economic value will only increase.

The new report is a breakthrough in establishing the economic importance of nature's services in supporting human economies. It should prove useful to development planners, economists, and policymakers who face the daily task of assigning some value to nature and making choices about its future. For researchers, it is a virtual encyclopedia of disparate studies on this new and evolving field. For more information on this topic see "Valuing Nature's Services" in State of the World 1997 and an upcoming feature article in WORLD WATCH.
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Author:Abramovitz, Janet N.
Publication:World Watch
Date:Sep 1, 1997
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