How Much Would You Charge for an Ocean?

When economists and environmental scientists teamed up to calculate the value of the services that people receive from the world's ecosystems, there were understandably some skeptics. Any dollar amount less than infinity would be an underestimate, some felt. But the team plunged ahead.

We know that oceans supply food and help regulate climate, that forests provide timber and store CO2, that national parks attract tourists and outdoor adventurers, that grasslands offer fodder. Economists can place a value on these services by estimating the willingness of people to pay for them. Put another way, economists can try to calculate the replacement value of each ecosystem, much as insurance companies do for houses or cars.

The team calculated that the annual value of services provided by forests is $4.7 trillion, coral reefs at $375 billion, lakes and rivers at $1.7 trillion. Wetlands give us services valued at $4.9 trillion. Ecotourism was estimated at $500 billion.

Now, the world's ecosystems also provide us with many free services (no money changes hands), the team realized. The ability of ecosystems to naturally clean the air and water, or form soil, was projected. Perhaps hardest of all to value is the aesthetics of the myriad forms of life and landscapes. If an Impressionistic painting of Mt. St. Victoire in France can sell for $38 million dollars, there is no easy way to calculate the value of the original model. But the team tried.

They came up with a total value of services to human welfare from the environment as no less than $16 trillion and no more than $54 trillion, with an average of $33 trillion. The global gross national product was roughly $18 trillion when the study was done (1997), so it could take almost twice the global GNP per year to replace the services rendered by the environment. Policymakers today might need to increase the priority they assign to maintaining the diversity of any given ecosystem or protecting the global environment.

References

Costanza, R. 1997. "The Value of the World's Ecosystem Services and Natural Capital," Nature, 15 May, vol. 378.

Press, Frank, and R. Siever. 2000. Understanding Earth, 3rd ed. Freeman/Worth Publishers, New York, New York.