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Humanity Loses $250 Billion a Year in Wild Habitat
Published on Monday, August 12, 2002 by OneWorld.net
Humanity Loses $250 Billion a Year in Wild Habitat
 

WASHINGTON, DC - The economic value of wild ecosystems far outweighs the value of converting these areas to cropland, housing or other human uses. A study in Friday's issue of the journal Science says habitat destruction costs the world the equivalent of about $250 billion each year.

The research team estimates that a network of global nature reserves would ensure the delivery of goods and services worth at least $400 trillion more each year than the goods and services from their converted counterparts. This means the benefit to cost ratio is more than 100 to one in favor of conservation - a "strikingly good investment," the researchers wrote.

"The economics are absolutely stark. We thought that the numbers would favor conservation, but not by this much," said lead author Andrew Balmford of the University of Cambridge Zoology Department.

Although habitat destruction continues unabated throughout the world, mounting evidence suggests that this trend is a bad economic bargain. From tropical forests to ocean reef systems, about half of an ecosystem's total economic value is lost when that ecosystem is converted from its wild state to human use, according to the Science study.

Balmford and colleagues compared the difference in the value of economic benefits provided by relatively intact ecosystems and by converted versions of those ecosystems. Although they reviewed more than 300 case studies of such conversion, they only identified five examples that met their rigorous standards for comparing benefits.

"A single year's habitat conversion costs the human enterprise, in net terms, on the order of $250 billion that year, and every year into the future," the team concludes.

The economic value of an ecosystem can be measured in terms of the "goods and services" - including climate regulation, water filtration, soil formation, and sustainably harvested plants and animals - that the ecosystem provides.

Pricing these goods and services is difficult, since they include items that are not bought and sold as part of a market driven, conventional economy. Economists assign values to non-marketed services using a range of techniques, from estimating the cost of replacing these products to assessing how much individuals and nations would be willing to pay for each ecosystem service.

Balmford and his team analyzed the case of a tropical forest in Cameroon converted to small scale agriculture and commercial plantations, another of a mangrove system in Thailand converted for shrimp farming, and another case of a Philippine coral reef dynamited for fishing.

In each case, the loss of ecosystem services such as storm and flood protection, atmospheric carbon sinks, sustainable hunting, and tourism outweighed the marketed benefits that came with conversion.

The total economic value of the intact ecosystems ranged from 14 percent to almost 75 percent higher than the converted ecosystem values.

For example, the study cites a project in Canada, which converted freshwater marshes into one of the country's most productive agricultural areas. The study team calculated that the area would be worth about 60 percent more if the wetlands were maintained for the social benefits of hunting, trapping and fishing.

According to the Balmford model, the value of sustainable management of a logging operation in a Malaysian tropical forest for flood protection, carbon stocks and endangered species assets was worth 14 percent more than the benefits of high intensity timber harvesting.

Despite these figures, the net benefit to the public of conservation is generally ignored, compared to the short term, private economic gains that often accompany conversion, the team wrote.

"We've been cooking the books for a long time by leaving out the worth of nature," said Robert Costanza, an ecological economist at the University of Maryland and an author of the "Science" study.

Costanza was one of the first scientists to draw attention to the concept of estimating dollar values for natural habitat. He and a team of researchers estimated in 1997 that the average global value of wild nature was $33 trillion a year.

But Constanza said even he was surprised by the results of this new study.

"We concluded that there is at least a 100 to one global benefit cost ratio to maintaining wild nature instead of developing it. None of us guessed it would be that high," Costanza said. "Every year we continue to convert habitat, it's costing us $250 billion over any profit that comes from development."

Lack of information about the economic worth of ecosystem services, the failure of markets to capture and value these services, and tax incentives and subsidies that encourage land conversion all contribute to continued habitat destruction, wrote the "Science" authors.

"We need to tackle all three of these, and there's no reason not to tackle all three at once," said Balmford. "However, in terms of immediate bang for buck, directly challenging subsidy schemes is a good way to improve both economic efficiency and the environment."

Researchers and policy makers are exploring several different ways to bring nature into the marketplace, Balmford said. Devices such as carbon taxes and credits, premium prices for certified, eco-friendly products, and even direct payments to the communities that live in globally significant conservation areas are under consideration.

The last proposal is somewhat controversial, but it may provide a way to compensate those communities for their reduced opportunities to exploit ecosystem resources, while reflecting the major global benefits of conservation, Balmford explained.

"There's a growing feeling that if what you're really after is conservation benefits, you may sometimes need to pay for that directly," Balmford notes.

The study estimates that by spending about $45 billion a year to conserve natural habitat on land and in the oceans, the net return on the services produced by nature would be between $400 and $520 trillion.

About $6.5 billion is now spent to sustain natural areas around the globe. Half of that is shelled out by the United States.

"We have to keep track of our natural capital. We've been liquidating it and not including the costs in our calculations," Costanza said. "The environment and the economy are tightly interdependent."

The Science study highlights the need for further data on the economic worth of wild nature, as there are few signs that global ecosystem loss is slowing down.

On the eve of the World Summit on Sustainable Development in Johannesburg, South Africa, natural systems are changing from their intact state at a rate of 1.2 percent per year, or 11.4 percent in the decade since the last sustainable development summit in Rio de Janeiro.

"People are hearing a message that nature is being eroded, but it takes a while to sink in, even for me," Balmford said. "One third of the world's wild nature has been lost since I was a child and first heard the word conservation - that's what keeps me awake at night."

Copyright Environment News Service (ENS) 2002

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