Picking up on recent research that looks at the economics of setting up a network of Scottish MPAs, Chris Williams of new economic foundation (nef) explains why the valuation of ‘ecosystems services’ are rising up everyone’s agenda.
One must acknowledge the intrinsic value of nature. It is essential. It is priceless. However, in order to inform policy decisions it is useful to understand how we benefit from nature (i.e. the services they provide) and what the cost for protecting it is, we need to have an approach that can value the environment in a way that reflects this immense and in many senses unquantifiable value.
Measuring those benefits, in order to make the case for conserving those areas which provide the highest benefits to human populations, or those which are of most importance in terms of biodiversity or most under threat, is a key step in making the case for their protection.
Looking at valuing the marine environment is an important aspect of work that NGOs working in the world of marine conservation and fisheries are concerned with. Although it is completely clear that ‘pricing the priceless’ is impossible and whatever values are calculated will inevitably be an underestimation of the true value of nature, within the confines of our current system, it is part of the necessary toolkit to inform decisions.
For example, in Scotland a study has just been released, which shows that the benefits of a network of Marine Protected Areas (MPAs) in Scotland range from £6.3 – £10 Billion over the next 20 years.
The estimated benefits include those that we benefit from directly by exploiting the environment (either consumptive goods e.g. fisheries, or non-consumptive ones e.g. wildlife viewing) and indirect benefits that are derived from ecosystem functions that give rise to a ‘socially relevant endpoint’ (e.g. climate regulation from carbon sequestration in plants). Economists also like to talk about the ‘option’ value associated with an individual’s willingness to pay to protect the possibility of using a natural resource in the future.
Then there are the non-use values such as the value an individual places on ensuring the availability of a natural resource to future generations, or the value placed on simply knowing that a natural resource is there.
The sea is a provider of food and materials for building (aggregates); it regulates our climate and produces oxygen and acts as a sink for carbon dioxide; and also provides other cultural benefits such as tourism and recreation. Some of these have clear market prices, some do not.
‘Rising on the agenda’
All of these benefits have been quantified (where possible) in the study and these considerations and approaches are now rising on the agenda when it comes to the marine environment.
With so much to be gained from conserving the marine environment and ensuring its use is sustainable, can we really afford not to? This brings us to why long-term thinking is problematic under the current paradigm and favours short-termism (myopia) over true sustainability:
Cost-Benefit Analysis (CBA) is currently the main framework used to evaluate public spending decisions, mainly in the form of Impact Assessments . The importance of CBA in evaluating all costs and benefits throughout society is central to decision making in the UK . The central importance of discounting and discount rates has been discussed many times and is a key issue which makes conservation seem like a bad investment: the benefits we derive from nature conservation often take a long period of time to materialise, especially in degraded environments. So the myopia resulting from economic decision making and ‘discounting the future’ means conservation does not look like it is worth investing in. The current discount rate we use (3.5% over 20 years ) does not reflect the reality that beyond the 20 year time horizon, the benefits may be even greater from having conservation areas within the marine environment. Is a source of protein around from our seas really going to be worth half of what it is now to people in the year 2032 (see graph below) or less than a third by 2050?
Graph 1: A discount rate of 3.5% from 2012 – 2050
The discussion about how to ‘’value nature’’ has been on-going for years. In its widest sense, the environmental, social and economic benefits of conserving natural habitats and ecosystems along with the species that inhabit them (our ‘natural capital’) are measured with regards to the services they provide to humans (‘ecosystem services’). Without this natural capital being in a functioning and healthy state, our long-term survival becomes difficult or impossible. The often-used but unhelpful utilitarian perspective (only looking at what goods and services we get out of nature) can only tell us part of the story.
So in order to specifically understand the benefits that Marine Protected Areas (MPAs) provide we ran a workshop in September as part of the Marine Socio Economics Project , a 30 month project to strengthen the socio-economic skills and capacity of marine NGOs. The five partners (WWF, MCS, Wildlife Trusts and the RSPB) sent key staff working on MPAs to Bristol, where a two day workshop presented the way that the benefits of MPAs (which include economic, social and environmental benefits) can be demonstrated, measured and used to inform government decision-making. The main case study discussed at the workshop was the English Marine Conservation Zone project (MCZ – a type of MPA), but work of this nature is going on throughout Britain, Europe and Globally, as the report from Scottish Environment LINK shows.
There is an inherent difficulty in demonstrating the value of ecosystem services and benefits to humans as a result of the designation of an MPA, but there is no doubt that our current economic approach is jeopardising food security, jobs, sustainability and the long-term future for people and the sea which surrounds us.