More on monetising nature

Last week I blogged about how, despite all its drawbacks, monetising nature has a lot to be said for it in its ability to tap into the global system of values. As luck would have it I was not the only person pondering these questions that day; David Bent was also struggling with the challenges of lack of clarity over sustainability issues, but his dilemma was that of a consumer unsure as to which was the most “sustainable” carpet to buy.

David’s challenge was to determine which was the most sustainable carpet, what forms of sustainability were good value for money versus which primarily worked by appealing to middle class faddishness, and that the complexity in this field was such that the salesperson struggled to explain the differences and thus to make a well-informed recommendation. When confronted with these multiple interacting and complex variables on top of the standard set of consumer choices, such as colour, pile, look, pattern of the carpet, it is not surprising that even an expert can quickly become bewildered.

However, if each of these different variables could be priced then the problem would be rapidly reduced to the standard choice of which products do you like most (in a subjective sense) versus their respective prices. For instance if carbon were taxed or otherwise priced, those manufacturers who sought to reduce their carbon footprint would benefit from lower prices compared to their competitors. They need not directly reduce their carbon footprint, however, they might find it cheaper to buy offsets off the shelf, e.g. from forest protection. Water and biodiversity can be similarly priced and thus incorporated into our economic decision making. Yes having the wrong price can be harmful, but it is easier to adjust a price once you’ve agreed the principle, than it is to agree it in the first place as has been highlighted by the entrenched opposition to global climate change negotiations.

I think part of the problem is that many environmentalists hope or assume that biodiversity and landscape conservation can all be marketed like ecotourism. While some tourists will always opt for the simple pleasures of the Costa del Sol or the bright lights of the nearest shopping paradise, there is a very substantial market of tourists who want to go somewhere different, that feels a bit special, makes them feel a bit special, and is away from the beaten track. The hotels that appeal to such tourists are all unique in their own particular way, little of which boils down to price, although accessibility can have a big impact on the price at which services can be delivered in remote wild locations. Ultimately, such tourists are choosing a place, with all its attendant charms and flaws: more than anything else, it is an emotional choice.

A shopper in need of a carpet, however, is in a totally different position. They have no access to the sort of  detailed information about the sources of the products they are comparing or glossy photographs of the landscapes, and even if they did would unlikely to be motivated enough to want to peruse it all in detail. Instead they want a mechanism that makes their life easy. This doesn’t have to be entirely monetary, e.g. the energy efficiency star ratings system is rarely translated into the dollar cost to run the device concerned over its expected life span, but internalising such costs as carbon emitted or biodiversity lost into the product price, is the only guaranteed way to ensure the consumer pays attention (or pays the price for not).

Will monetising nature lead to distortions in how certain landscapes are managed? Without doubt. Will it be a shame if some unique characteristics are lost as a result? Yes. But if those unique characteristics are not sufficiently well appreciated to merit more stringent protection then that is s decision that society has collectively made. Moreover such distorted landscape management will almost certainly be better than converting the whole place to mechanised agricultural production.

At the end of the day the choice for society is very simple: pay for it, one way or another, or lose it.


One response to this post.

  1. Posted by Matt banks on March 1, 2013 at 4:43 am

    Buying a carpet will never be the same again !


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