Whatis wrong with putting a price on nature?
Traditionally,intrinsic value of the ecosystem was the main drive for theprotection and conversation of nature. Basically, the value of theecosystem was not purely on its economic gains but also on otheraspects such as climate change and balancing of nature. Putting aprice on nature is the new proposed idea for enhancing theconservations and protection of nature. The ideas of valuing thenature on economic basis have been proposed because of realizing theprevious techniques used by the scientists, conservationists andpoliticians have not yielded much result.
Thisresearch paper examines the negative side of putting price on natureas well as explains the underlying issues on putting price on nature.
Puttingprice on nature
Puttingprice on the ecosystem services means that services offered by naturewill be passed from one party to the other on price agreement. Themain problem with the pricing concept is that the ecosystem servicesgoes beyond the tangible aspects, a factor that makes it difficult toderive the actual value of the ecosystem. Nature provides essentialbenefits including food and water. The nature also providesintangible benefits that are psychologically and culturally importantto human well-being. The intangible benefits include recreationalpurposes, tourism, learning, biodiversity and cultural practices.
Accordingto Combertiet al (2015), examining the actual value of nature can be verydifficult because of the complexity of coming with an effective andworkable formula. Economists argue that nature can be valued justlike any other capital investments such as buildings and land.However, the problem is coming up with the right formula to calculatethe actual value of nature. It is very difficult to put a monetaryvalue on nature when some of its benefits are indirect.
Pricingthe ecosystem does not directly mean that all the services ofecosystem will completely be solved. There are some functions ofnature whose market is inaccessible. For example, the market forecosystem services such as refining of air, soil formation and waterpurification cannot easily get the buyer. Pricing of ecosystem willonly attract buyers who can forecast the future monetary benefits ofnature. According to the economic principles, the buyers will onlyspend their money with return motives. Therefore, pricing of naturedoes not give the full solution of the degradation and loss ofbiodiversity in the world.
Pricingthe ecosystem will risk losing the intrinsic value of nature. Whenall the conversation is geared towards economic benefits, it willlower the actual value that has been placed on nature. On the otherhand, the paying for nature services means that the government willbe the owner of nature and the wealthy will be the only able buyers.This brings in the aspect of excluding other groups from accessingsome of the benefits of nature. For example, there are communitiesthat conduct cultural practices that indirectly help conserve nature,and they can greatly be affected when economic gains become thedriving factor. Poor trade-off due to struggle of wealth and powercan disadvantage some parties in addition to affecting theenvironmental conservation programs (Ninan& Inoue 2013).Pricing is wrong because it can only focus on tradable factors ofnature and overlook other equally important but untradeable factors.For example, climate change will not be given much attention becauseit cannot be traded and because it has often been termed as animpediment for production.
Ecosystemis an example of public goods, its consumption cannot completelyexclude other people from benefiting, and consequently, itsdestruction also has indirect impact in the society. For instance,when water of the river is polluted upstream, it affects users of thewater downstream. This clearly shows that ecosystem conservationrequires a holistic approach because of the indirect impact ofecosystem and interconnection of the ecosystem and its usage.
Legalframework for payment on ecosystem services (PES)
Theother challenge of pricing ecosystem is the issue of structuring andsustaining a legal framework to guide the process. Structuring alegal framework is a challenging process because of the politicalinfluence which is usually driven by self-interests. Structuring aneffective legal framework is essential for the implementation of PESprogram. For instance, in Britain, the government’s plan to sellpart of the forest was strongly opposed because the government didnot work with all the stakeholders such conservationists. Thisgenerally means valuing of ecosystem does not provide the fullsolution of the challenges facing the nature. Food and clean waterservice can be valued, but it is impossible to value the benefitssuch as the ability to counter climate change and global warming.
Theother aspect of valuing the ecosystem is that it will create privateownership thus barring other people from using the nature. Theratification of strict laws preventing the usage of various naturalresources such as forests leads to unwanted activities such asillegal lumbering, mining and poaching with very low conversation. Ina research that was conducted in Nepal by the University of Cambridge(2014), areas that were conserved by the local communities showedpositive results than the areas that were conversed by thegovernment. Additionally, strict measures on the ecosystem only leadto poverty and lack of essential products such as food and cleanwater. Instead of pricing the environment, the movement should engagewith the local communities in conservation. Pricing the nature doesnot help conserve but reduces its gains to economic benefits. Thepoliticians may be tempted to only focus on the monetary benefits andoverlook other essential benefits.
Theconcept of pricing the nature is a contentious issue because of thestands held by different parties. Economists suggest that valuing theecosystem will help enhance the level of conversation and protectionof nature, unlike the previous methods that have failed to achievethe anticipated results. However, the main challenge with the pricingconcept is determining the actual value of nature. There is no singleformula that can include both tangible and intangible benefits inderiving the actual value of nature. Pricing affects equalaccessibility of nature services because it brings in the aspect of abuyer and a seller. In addition, designing a legal framework for theimplementation of payment of the ecosystem services (PES) programscan be influenced by politicians with self-interest.
Comberti,C., Thornton, T. F., Echeverria, V. W., & Patterson, T. (2015).Ecosystem services or services to ecosystems? Valuing cultivation andreciprocal relationships between humans and ecosystems. GlobalEnvironmental Change,34,247-262.
Ninan,K. N., & Inoue, M. (2013). Valuing forest ecosystem services:what we know and what we don`t. Ecologicaleconomics,93,137-149.
Universityof Cambridge (2014), Does it Help Conservation of Put a Price onNature? Retrieved September 30, 2016 fromhttp://www.cam.ac.uk/research/news/does-it-help-conservation-to-put-a-price-on-nature.