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The Online Magazine for Sustainable Seas
October, 2000 Vol.3 No.10
   


Putting a Price on Nature

By Alan T. White, Ph.D. Coastal Resource Management Project

 

 

 

   




t's time we stopped destroying the economic foundation of our renewable natural resources beyond the point of no return. And by return I mean not only the hopeful return to a more undegraded state, but the economic return from our natural resource base and its products. In our rapidly changing world, where economics is assumed to be the driving force, we should use economic tools to help people understand the value of their environmental resources - and what they stand to lose.

As a coastal-resource manager working in Asia, I see the continued and escalating destruction of coral reefs, mangrove forests, estuaries and all their associated fisheries. These ecosystems and the resources they produce for people are not only valuable aesthetically or as rich reservoirs of genetic biodiversity. They produce fish in large and sustainable quantities, attract millions of tourists that stimulate the economy in many ways, and protect shorelines from erosion, eliminating the need to build other costly shore protection and flood-control measures. They support fisheries not only locally but on distant shores to which currents carry the fish larvae they produce. These valuable ecosystems are storehouses of wealth unequaled in nature or in human enterprises. So why do we continue to destroy these resources of high return at unprecedented rates?

What's missing is concrete valuation. We value our money, and invest it in the company with the best growth potential for the highest return. We invest in our own schooling to generate family or personal income. Why don't we invest more where returns are guaranteed for thousands of people for every year into the foreseeable future? One-hundred hectares of healthy coral reef produces up to 30 tons of edible fish every year, enough to provide 350 people with their daily protein needs for one year. This same reef can attract enough scuba divers and swimmers to support, through their expenditure of about $30,000, the average family income of 30 families in Southeast Asia. All of the economic activity generated by this healthy coral reef covering 100 hectares can reach over $100,000 a year.

Too few people realize the wealth of benefits coming from coral reefs and other ecosystems, and those who do understand this have difficulty putting a concrete value on them. Most important decisions in our lives are based on some kind of cost-benefit analysis, based on monetary values, and it is time to put a value on natural resources in the only terms that many people understand: money.

But it will not be enough to simply put monetary values on ecosystems and expect people to start protecting them. Valuation will not change human behavior unless the monetary figure is authoritative and compared with the long-term costs of development alternatives.

For example, mangrove forests have been decimated in much of Asia, primarily because of the lure of quick profits from intensive and destructive shrimp-farming techniques. After the rush to cash in on these lucrative farms, many old degraded mangrove habitats lie idle and produce nothing except some weeds or silt. Now, with the hindsight of these tangible costs, economic analyses show that the best investment would have been to keep the mangrove forests intact, and enjoy their sustainable ecological and economic benefits of wood, fish, and coastal protection. Had economic valuation techniques been applied to predict these costs and benefits - and acted upon - many of these mangroves would still be intact today and supplying economic returns at little or no cost to people.

So many proposed development projects that I see along the coastlines of the Philippines and other countries are not economically viable, when put to the economic valuation and cost-benefit test. They will lose more than they will gain simply because all the natural amenities and many useful ecological functions will be permanently gone. These coastal development plans are not wise choices; they are truly losing propositions.

Sustainable solutions are never easy. It may be an uphill battle for resource managers simply because data and proper analysis are not always available. There are almost always political barriers to conserving resources. But the numbers are compelling, if you can find them. To return to the coral reef example, the Philippines is estimated to gain, using very conservative figures, about $1.35 billion annually from its 27,000 square kilometers of coral reefs in their present rather-degraded state. This represents double the total income from fisheries exports, or 3 percent of the gross domestic product of the Philippines. The potential increase in this return resulting from comprehensive reef management is very high, but not yet realized. Putting a value on nature is worth fighting for; that is, if we want coral reefs, mangroves, and other sensitive ecosystems to survive through this new century.

Dr. Alan T. White, deputy chief of party of the Coastal Resource Management Project, has documented the decline of coral reef ecosystems in the Philippines for more than 20 years. With the efforts of Earthwatch volunteers, he has helped established three reef sanctuaries and a management plan for Tubbataha National Marine Park, and confirmed that such protected areas effectively increase the abundance and diversity of reef fish.

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