I came across an interesting article in the New York Times about putting a price on nature. In some of my classes during my graduate studies, we were studying different methods and theories that can help value natural resources such as the travel cost method and contingent valuation, so this subject was of particular interest to me. The article is about The Nature Capital Project that was created by Stanford University, the University of Minnesota and The Nature Conservancy. The idea behind this project is to put a value on the benefits we get from the different element of nature in order to take them into consideration when building projects that can alter or affect it.
You may wonder, what exactly is the capital of nature? The information on the project’s website gives some examples on the type of benefits or “services” we receive from nature:
• Plants counteract climate change by capturing carbon dioxide
• Wetlands purify water flowing into lakes and streams
• Forests soak up rain, reducing the risk of floods
• Worms turn waste into life supporting soil.
There is, of course many other examples of nature services that aren’t listed here. The tougher question is now: How do you value nature services? They do not come with a price tag, but the organization came up with InVEST, a tool that allows the decision-makers to quantify the importance of natural capital, to assess the tradeoffs associated with alternative choices, and to integrate conservation and human development (naturecapitalproject.org). A classic example of tradeoff when it comes to nature is cutting a forest in order to produce energy vs. keeping the forest in order to protect an area from flooding and erosion. Does the cost of finding an alternative way to produce energy outweigh the risk associated with not having the protection from the forest anymore? In this scenario, a lot more needs to be taken into consideration to evaluate the problem accurately, but it gives an idea of how complex tradeoffs can be.
The InVEST tool, from the Natural Capital project, helps evaluate the different alternatives for a project considering the biophysical and economical factors. This tool can be used by government, non-profits as well as private companies that are interested in doing their part in terms of protecting the fragile balance between nature and human needs.
For more information check out the website: www.naturecapitalproject.org.