In 1997, Robert Costanza and colleagues set out to do something audacious. They estimated the value of nature. At the time, the general public did not pay much attention to the economic value of the living world. Costanza and his co-authors knew that nature had an economic value and it was likely to be huge. And that’s exactly what they found. They published a powerful and transformational paper in Nature in which they estimated that the preliminary value of nature was on the order of $33 trillion per year.
“Nature wasn’t just important for nature’s sake, it was important for people”
Over time, more and more Big International Non-Governmental Organizations (BINGOs) got into the valuation act themselves. These big numbers, for the value of nature, showed that conservationists weren’t just bleeding heart environmentalists; they were working on behalf of people, on behalf of the economy. Some BINGOs changed their game plan—conservation for people was something they could sell, an idea whose time had come. Conservation International changed its motto. The Nature Conservancy got a business-minded CEO. World Wildlife Fund began funding studies of the value of nature, including some I’ve worked on. This was a win-win shift in our thinking—conservation could be good for people and good for nature, if only we could get better at valuing nature, understanding the benefits that come from what sometimes seems like costly and difficult conservation actions. Surely this new embrace of the economic value of nature would lead to more and better estimates of nature’s worth and could even change the way we make decisions about nature.
More than a decade later, in 2012 and then again in 2014, some of the original authors set out to re-estimate the value of nature—the methods were basically the same as before, but additional estimates of the value of specific ecosystem services were added to the analysis. With these additional value estimates in hand, the authors showed that the annual value of nature should have been estimated at $145 trillion—$112 trillion per year more than originally estimated.
A new short communication in Marine Policy challenges key data upon which these revisions are made. It points out that the tremendous increase in the revised estimated value of nature, reported in the 2012 and 2014 papers, comes largely from revisions in the value estimates of just a handful of ecosystems. Let’s focus on the ones I know best, the marine ecosystems. In their new estimates, Costanza and de Groot find that the value of ecosystem services provided by marine and coastal ecosystems, including wetlands (tidal marshes and mangroves) were originally undervalued by $62.3 trillion. In particular, the mean per hectare values of coral reefs and coastal wetlands in the revised analysis are found to be dramatically larger than the original estimates by Costanza et al. (1997):
- the mean estimated value of coral reefs increased from $8,384/ha to $352,249/ha, and
- from $13,786/ha to $193,843/ha for tidal marshes and mangroves.
How could these mean value estimates have gone up so much?
According to the authors, one reason for the increase in estimated values is due to “new (and generally more numerous and complete) estimates of the unit values of ecosystem services per ha (p155).” Our Marine Policy review, however, found that much of the increase is due to the fact that “new” revisions by the authors include a number of rather “old” and extremely large value estimates that don’t conform with more recent value estimates, or methods, and should be considered outliers at best. These outlier estimates include:
- two estimates of per ha value of coral reefs ($306,427, and $1,484,996), from 1999, and
- a 1974 estimate of the waste treatment value of coastal wetlands ($640,099).
The age of the studies, from which these values are taken, is important. The numbers, used in both the 2012 and 2014 “re-estimates,” for the value of waste treatment by coastal wetlands, which accounts for 84% of the revised value of coastal wetlands, show a downward decline over the years ($640,099/ha in 1974 to $2,068/ha in 2003). Focusing only on values from studies used by the authors, one sees that the estimated value for the waste treatment role of coastal wetlands declined substantially over time. Estimates of the value of coral reefs show a similar downward trend. In fact, if we focus only on studies from the year 2000 and later, the average estimated value of a hectare of coral reef is only $86,041 — less than a quarter of the value used to calculate the revised estimates. The literature cited by the authors shows us that, for many ecosystems, more modern estimates of ecosystem service values are significantly lower than those from previous years. Average global values used in the “revision” rely on values taken from studies that span more than three decades and do not reflect these trends and thus result in huge overestimates of average unit values for ecosystem services.
So, how do we bring these numbers back down to Earth?
While many economists continue to argue that we shouldn’t even try to estimate the global value of nature, the public clearly hungers for such an analysis, especially at the level of specific ecosystem types and biomes. So, if we are going to attempt something so “audacious,” we might follow some basic rules:
don’t mix gross and net values—they mean different things (e.g. the gross revenues from tourism include benefits and costs),
don’t combine mutually exclusive values (e.g. you can’t use coral for building materials and to support scuba tourism)—that is double counting, and
above all else, be careful about the data you use and make sure your data are reasonable and recent. A new analysis, following these basic rules, would yield much lower value estimates—for individual ecosystems and for total global ecosystem services at large. Such a revision may not satisfy some economists, but at least it would provide a number that is more suitable for discussion.
At smaller scales, economists and ecosystem services analysts are doing a good job of estimating the value of nature, but the literature is vast and not necessarily accessible to the public. Large-scale aggregation studies, like the ones by Costanza and de Groot, provide easy access to valuation estimates in a way that much of the public seems to understand. Many in the public use such studies as veritable libraries of values, even if the authors never intended such a use. So, we need to make sure these studies present good, modern, and reasonably accurate estimates of the value of nature.
Governments and business are ready for good estimates of the value of nature. The Obama administration recently released guidance to include ecosystem services in U.S. federal policy. The EU has undertaken massive efforts to map and assess ecosystem services. For these exercises to be useful for decision makers, it will be important that they are based on meaningful estimates of value —not giant values based on old studies.
By Linwood Pendleton