Pricing the invaluable:

Abstract

It is constructive of Ecological Economics to invite comments on this imaginative and stimulating article (Nature, 387/15, May 1997) which draws attention to the value of the services provided by ecological systems and natural capital stocks. Such an article should in principle elicit unreserved commendation from ecological economists who are more aware than other specialists of the contribution made by ecological systems to economic activities and human welfare. Nevertheless, I find my own reactions to the article rather mixed. On one level I salute this brave attempt at ‘pricing the invaluable’, but on yet other levels I have some misgivings which I shall try to summarize below. The range of valuation offered is considerable ($38 trillion), amounting roughly to two and half times the lower estimate, and exceeds significantly the average estimate of $33 trillion. Such a wide range, while perhaps unavoidable considering the current state of our knowledge, inevitably detracts from the estimates’ worth. We are told that these estimates are ‘almost certainly’ a minimum. Thus there is the possibility that as these initial estimates are scaled upward, the range might broaden still further. That there is a chance of double counting (in that the ecological services here identified must have been, at least in part, already counted in the global gross product) this, while explicitly admitted by the authors, cannot go away, and should perhaps be quantified at a future date and reconciled with the estimates. The importance of this point derives from the fact that a vivid comparison is made between the estimated value of ecosystem services and the global gross national product ($18 trillion)—a comparison apparently made to convey the impression that the value of such services is a multiple of the recorded product.