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These figures have proven to be somewhat controversial in that the methods for gathering the information are contested, while others believe the effort to assign prices to ecosystem services is fundamentally flawed since these services can never be traded in open commerce. There are also those that believe that even if such prices can be reasonably calculated, they cannot reflect the full value of these services, which reaches well beyond their importance to the world economy.

The reality is that human societies put price tags on nature every day. Every land use decision involves assumptions about value, even when no dollar figure is assigned. The problem is that the value of services provided by Mother Earth do not fit into current economic equations, partly because most of the services fall outside the marketplace. These services are public goods that contribute enormously to our lives without ever being drawn into the money economy. For instance, the cycling of essential nutrients like nitrogen and phosphorus, which is not reflected in any nation's GNP, accounts for US$17 trillion of the US$33 trillion in annual ecosystem services, according to the study team's estimate.

This is not to suggest that the value of these ecosystems and the services that they provide are being ignored. In fact, in a small but growing number of cases around the world, the benefits of proposed projects are being weighed against the costs of lost ecosystem services.

In some parts of the United States, for instance, attention is now focused on the benefits of protecting natural watersheds to assure safe and plentiful drinking water supplies, rather than on building expensive filtration plants to purify water from degraded watersheds.

New York City recently found it could avoid spending US$6-8 billion on the construction of new water treatment plants by protecting the upstate watershed that has traditionally accomplished these purification services for free. Based on this economic assessment, the city invested US$1.5 billion in buying land around its reservoirs and instituting other protective measures, actions that will not only keep its water pure at a bargain price but also enhance recreation, wildlife habitat, and other ecological benefits.

In the traditionally prosperous Hadejia-Jama'are flood plain region in northern Nigeria, where more than one half of the wetlands have already been lost to drought and upstream dams, ecosystem valuation has been used to weigh the costs and benefits of proposals that would divert still more water away for irrigated agriculture. The net benefits of such a diversion were priced at US$29 per hectare.

Yet, the intact flood plain already provides US$167 per hectare in benefits to a wider range of local people engaged in farming, fishing, grazing livestock, or gathering fuelwood and other wild products-benefits which would be greatly diminished by the project. Thus, even without accounting for such services as wildlife habitat, the wetland is far more valuable to more people in its current state than diverted for irrigation.

We all know how much we love our environment. And yet we fail to account for it even in the most basic of our marketplace transactions. We say we need to think a bit harder about how we use our environment, how much it means to us and start building that into the cost of all the stuff and services that we have grown so used to having.

(Article from the World Resources Institute - click here to read more)


Other links:

RAND - Nature's Services: Ecosystems Are More Than Wildlife Habitat

SIMCOE - Placing a value on the natural environment

World Business Council for Sustainable Development - Price fixing

Environmental News Network - Putting a Value on Nature