Evaluating Environmental Economics

The Economist recently reported on a London conference designed to bring together a number of ecologists to work towards the goal of developing better models for the economic value of undisturbed natural systems.  Although the idea of placing a price tag on nature can seem almost heretical to some at first glance, conservationists have been making the argument that designating a specific value to the natural services provided by an ecosystem allows us to make a more precise evaluation of the benefits and costs of development.  While the concept of appraising land is hardly a new one, there have been advances in our ability to accurately evaluate the full range of “ecological services” provided by a given ecosystem through modeling software.  The Natural Capital Project designed the most widely used program currently in use, InVEST.

While rising awareness of the tangible benefits provided by natural systems to society is good news for conservationists, it is also great news for social entrepreneurs who are environmentally conscious.  Making a commodity out of the ‘free’ services provided by nature opens the possibility of making business investment in conservation.  Current conservation organizations rely nearly entirely on donations, and are often only able to provide small compensation to the property owners who pledge to leave their land undeveloped.   Commoditization of ecological services may be the only way to counteract the incentives towards development in an increasingly market-driven, global economy.