Definition of valuation: Recognizing, estimating or appreciating the value or merit of something.

Evaluation is inseparable from decision making. When we make a decision it means that we have previously carried out a Value judgment. Many times this assessment occurs in our subconscious, so we do not realize that we have done it.

A article scientist published by Nature magazine in 1997, written by Robert Costanza and 12 other co-authors, attracted society’s attention to the economic valuation of nature. The value of nature was then estimated at 33 trillion dollars. Years later, in 2014, another article was published updating said value in 145 trillion dollars.

The reason for assigning a price to the benefits that we obtain from the environment (the so-called ecosystem services) is simple: the economic system threatens the nature because the latter has no monetary value. Much of what we provided by nature is “free”, that is, it is not taken into account by the market economy; see, for example, the services offered to us by forests, based on flood regulation or purification of the air, among many other services. The idea is based on the fact that economically valuing benefits that nature brings us could stimulate its protection and conservation: if something has a price, it is no longer invisible to governments and companies, becoming a “valued” and “protected” service due to to its contribution to the economy and society.

Since the publication of the first mentioned article, they have There have been many criticisms that the idea of ​​putting a price on benefits that ecosystems bring to society, the main ones being:

  • The environmental sector should not be “sold out” to a neoliberal vision of nature and the economic system that causes multiple social and environmental problems: poverty, inequality, climate change… . Be based on a monetary approach to conserving nature is a purely capitalist and dependent on unsustainable economic growth.
  • The economic benefits of conserving nature are less than those obtained for destroying it (to create farm fields, urbanizations…). The rate of return offered by nature will be always less than any speculation and financial investment. Sooner or later, Putting a price on nature will contribute to its privatization and, therefore, to its degradation in favor of economic activities to which little or nothing benefits concern about the state of the environment.
  • Ecosystems should be protected for reasons purely moral or aesthetic, rather than economic reasons.
  • Monetary valuation of the environment is understood as something foolish and very difficult to do. Cannot put a value to something “intangible” such as nature, human life or beauty in overall.

These arguments are largely right and most of them are based on fear; a fear of privatization and the degradation of the ecosystems on which we depend so much. A fear and lack of confidence in the current economic system that is fully justified, since it has not proven to be capable of protecting and managing nature in a sustainable manner.

However, at this point, it is necessary to clarify the main objective of economically valuing ecosystem services : the awareness of the population about the importance of the environment and the consideration of the environment in political decision-making.

Monetising the benefits we obtain from ecosystems helps people who are not familiar with scientific or technical language to be aware of the great value that the environment has for society. Money is, for better and for worse, the most widely known and used indicator in the world. Therefore, using this language can serve to increase people’s environmental awareness. In addition, economic valuation allows politicians and agents responsible for decision-making to know the approximate value of the land, land use, etc., that they manage on a day-to-day basis. Therefore, environmental monetization can be used as a tool to improve political decision-making related to the environment.

Put a price on the benefits we get from environment does not imply “selling nature”. There is no need to fear privatization in that sense; no one is going to privatize and sell the related public goods to the highest bidder with nature (the air, the clean water of a river…). It is something impossible or very unlikely. Another thing is the negative externalities of the system economic, but that is another topic (read more here). At the same time, the discourse of what is morally correct must be parallel, and not mutually exclusive, to economic discourse. By that rule of three, also The protection of nature could be immoral if this implies the banishment of indigenous populations, as is currently the case.

One should not be afraid of uniting the economy and the environment. As mentioned at the beginning of the article, political decisions already imply a personal assessment of the environment, although this is not Express in monetary units. Therefore, the assessment, influenced by multiple personal and collective factors, is already there, consciously or unconsciously. If a “subjective” assessment is already carried out, why not put a price on it – even if it is approximate – so that we all understand each other and thus be able to value the importance of the environment?

The need for transformation is undeniable socioeconomic towards a system that knows how to value the environment as deserves. It takes a kind of Capitalism 2.0, more sustainable, kinder, less predatory. But while we carry out such transformation, the economic valuation of the environment can contribute to raising awareness among people, especially politicians, about our dependence on nature.

After all, maybe all we needed was a common language.

Julen González Redín
PhD in Sustainable Development and Environment