Should we put a financial value on the natural environment?

(Colin Bell)

The UK government has just published a report which attempts to do so, and values our natural assets at “at least £30bn a year in health and welfare benefits”, in our first national eco-system assessment according to coverage here. A white paper setting out proposed government policy will follow in a few weeks.

This issue has strongly divided green commentators. Molly Scott Cato, speaker on economics for the Green Party strongly condemns the move as sucking the environment into the economists’ cost-benefit analyses, and possibly making development easier. “A little bit of carbon mitigation, a few bus fares to travel to the next closest park, and the problem of local resistance to concrete is solved. Profits expand and the irritating impediment to economic growth from nature and those who love nature has been eliminated.”

On the other hand, Damian Carrington in his Guardian blog gives the proposal a cautious welcome. Given “we live in a world where things without a valuation are simply not valued”, we either put a price on nature or effectively give it away for free. He sees the existing consultation as a “once-in-a-generation opportunity to re-balance our relationship with the natural world”.

It’s unlikely this difference of opinion is likely to be resolved any time soon. Personally, I think Molly Scott Cato is probably right in principle: we should not be making decisions based purely in some financial utilitarian way, and the environment is far from the only category of “good” that is best treated in some other way. However, pragmatically, that debate is not even on the table, so I side with Carrington in that it is better to give nature some value in existing calculations than none at all.

One issue which neither has pointed out though which concerns me: it seems from the reports so far that nature is only being given value insofar as humans benefit from it. The examples given are for human health and well-being, and for the farmers from the fertilisation of crops by bees. I would like to see some sign that the natural world is considered to have some value in and of itself.



Filed under Thoughts

4 responses to “Should we put a financial value on the natural environment?

  1. I think we could turn this question on its head. Perhaps we should look at the economic system itself, which is flawed in many ways. One important flaw is that humans are not valued within the system.

    We measure a ‘healthy’ economy in terms of the material wealth or prosperity that is created by and for its working citizens, expressed in terms such as the gross domestic product (GDP), gross domestic income (GDI) or gross national product (GNP). Whichever measure is used, they all put a zero valuation on the environment, on healthy citizens, social cohesion and cultural values!(1) As Robert Kennedy said:

    …the (Gross National Product) does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages… It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans. (2)

    A very large number of people in our society are presently undervalued or not valued at all in monetary terms. These include the old and young, the infirm and disabled, the housewives and the many community and charity volunteers without whom many organizations would simply not survive. All of these people outside the conventional workforce often work very much harder and longer hours than many in full time employment. But they gain no financial independence or recognition within the economic framework from their toil. I know of a wife who for two decades has selflessly cared full time for an increasingly and profoundly disabled husband. Or I think of the mother who takes a career break to raise her own children. These women both lead enormously valuable lives, but feel undervalued.

    But it is the economic system that is wrong.

    So to return to the question – and the concern expressed that the natural world should be seen as having some value in and of itself. This could happen within a financial system that is cyclical and sustainable and environmentally sound, and that is far from the reality of our present economy.

    The fact is that we cannot sustain our present financial systems
    There is massive wastage in our consumer society, both from personal consumption and in our industrial processes. Alarming statistics can be found of physical waste:

    Americans waste or cause to be wasted nearly 1 million pounds of materials per person per year…[and] this does not account for wastes generated overseas on [their] behalf…the amount of waste generated to make a laptop computer is close to 4000 times its weight (3).

    There is a beautifully sustainable cycle within nature. Dead bodies provide food for living creatures, plants photosynthesize and produce oxygen from carbon dioxide and animals use that oxygen in their respiration of which the by-product is carbon dioxide. At school we learnt all about this and called it the Carbon Cycle, little suspecting that 50 years later this would have such a fundamental significance for the future of the world!
    If we can see the Earth as a single living entity involving complex interrelationships and a finely tuned balance of all life, as envisioned for example by James Lovelock, should it not be logical for a sustainable economy to mimic that natural world, indeed be a part of that world, where everything is recycled, everything has a further use elsewhere. We would then be able to build a system that is totally cyclical and sustainable and environmentally sound, and such a system would be able to place values on those important intangibles.

    Evolution biologist and futurist Elisabet Sahtouris (4) once posed the question: doesn’t it seem crazy and so obviously illogical that our household finances and the study of how we make a living (or economy) should be so totally divorced from the study of how other species make a living (or ecology)?
    This seems so simple and obvious but we cannot see it and we stumble onwards within an economic system that is deeply flawed!
    So let’s first look at how we can change our economy – to embrace all these other essential qualities.

    1. Hazel Henderson, 2001, cited in The Path to Living Economies – a collaborative Working Document of the Social Ventures Network at

    2. Robert F. Kennedy, from transcription of audio version of Address made 18 March 1968 at the University of Kansas, Lawrence, Kansas, sourced at

    3. Paul Hawken and Amory and T. Hunter Lovins,1999, p. 52 cited in The Path to Living Economies – a collaborative Working Document of the Social Ventures Network at

    4. Attributed to Janine Benyus at a Bioneers conference – from a Note from the Author Elisabet Sahtouris, 2000 at

  2. Pingback: UK National Ecosystem Assessment – more thoughts | Sustainability in Crisis

  3. Colin Bell

    Thanks for that Eleanor – and apologies it didn’t get posted straight off. (You’re an “approved poster”, but WordPress’s spam filter picked it up because of the links, and I didn’t get to my e-mail until the following morning.)

    Think you’re right on the principles that economics should be based on and you provide a good argument for why. Something often noted is that “economics” and “ecology” come from the same Greek root and loosely refer to quantitative and qualitative analysis of the same thing!

    The task is to raise this argument more widely, which is one of the things that should happen at our conference.

  4. I very much hope I shall be able to come to that conference. Elizabet Sahtouris has more than once made the point about ecology and economy. “Doesn’t it seem crazy,” she has written, ” and so obviously illogical that our household finances and the study of how we make a living (or economy) should be so totally divorced from the study of how other species make a living (or ecology)?
    Actually here attributed to Janine Benyus at a Bioneers conference – but from a Note from Elisabet in her Earthdance: Living Systems in Evolution, New York: Praeger, 2000.

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