Bulldozing Biodiversity: g yHow to Trash Ecosystems Efficiently
byProf. Dr. Clive L. Spash
www clivespash org
Department Sozioökonomie, WU Wirtshafts Universität Wienand
Department of Environment & Development Studies, Norwegian University of Life Sciences
www.clivespash.org
6th December, 2010Wien, Austria
Prof. Clive L. Spash ©2010
Outline
Background: The drive to value biodiversity and ecosystems Background: The drive to value biodiversity and ecosystems
Theory: Efficient and optimal resource use
The valuation solution and its problems
Need for alternative institutions for value articulation, judgement and management
Prof. Clive L. Spash ©2010
BACKGROUND
Prof. Clive L. Spash ©2010
Drive for Economic Valuation of Ecosystems as Services
Ecologists collaborating with mainstream economists as a pragmatic / Ecologists collaborating with mainstream economists as a pragmatic / opportunistic way forward (e.g., Beijer Institute) from late 1980s
USA ecosystems services pushed by natural scientists such as Paul Ehrlich and Gretchen Dailyand Gretchen Daily
The monetary value of the World’s ecosystems (Costanza et al., 1997) and all remaining wild Nature (Balmford et al., 2002). Both lead authors natural scientists.scientists.
The National Research Council (NRC) in the USA. Valuing Ecosystems Services: Toward Better Environmental Decision-Making. (Heal et al., 2005)
Th E i f E t & Bi di it (TEEB) M i t i th The Economics of Ecosystems & Biodiversity (TEEB) Mainstreaming the Economics of Nature. 2010 synthesis report.
Prof. Clive L. Spash ©2010
Potsdam Initiative
2007 the G8 and five other industrialising nations proposed a global cost-benefit
Under the subtitle “The economic significance of the global loss of biological diversity”, the parties state:
analysis of biodiversity loss called the “Potsdam Initiative--Biological Diversity 2010”
g y , p“In a global study we will initiate the process of analysing theglobal economic benefit of biological diversity, the costs ofthe loss of biodiversity and the failure to take protectivethe loss of biodiversity and the failure to take protectivemeasures versus the costs of effective conservation.”
As the German Environment Minister stated, the week before release of the Potsdam Initiative: “The ‘biodiversity treasure trove’ provides the global economy with an invaluable and extensive potential for innovative products and processes that is still widely untapped”
Prof. Clive L. Spash ©2010
The Supposed Problem
Bi di it l k k t iBiodiversity lacks a market price“Failure to include some measure of the value of
ecosystem services in benefit-cost calculations will i li itl i th l f ” (H l t l 2005 5)implicitly assign them a value of zero” (Heal et al.,2005 p.5)
Private companies lack the right incentives“Companies do not clear cut forests out of wantonCompanies do not clear-cut forests out of wanton
destructiveness or stupidity. On the whole, they do so because market signals ... make it a logical and profitable thing to do. (TEEB 2010 p.9)thing to do. (TEEB 2010 p.9)
Politicians fail to take into account the ‘right’ values“Ignoring or undervaluing natural capital in economic g g g p
forecasting, modelling and assessment can lead to public policy and government investment decisions that exacerbate the degradation” (TEEB 2010 p.10)
Prof. Clive L. Spash ©2010
BASIC THEORY
Prof. Clive L. Spash ©2010
Efficient and Optimal Resource Allocation
Euros
Cost includes the opportunity cost such as the other potential uses of land e.g. agro-forestry, urban housing
per hectare
Marginal Cost of Species Habitat / Ecosystems Services
Hectares per 0year
Prof. Clive L. Spash ©2010
Efficient Resource Allocation: The Environmental Position
Euros Marginal Benefit of Species Habitat / Ecosystems Services
per hectare
Marginal Cost of Species Habitat / Ecosystems Services
Hectares per 0year
Under provision
Prof. Clive L. Spash ©2010
Developers Alternative: Optimal Extinction
Euros Marginal Benefit of Species Habitat / Ecosystems Services
per hectare
Marginal Cost of Species Habitat / Ecosystems Services
Hectares per Over provision
Optimum0yearOver provision
Prof. Clive L. Spash ©2010
Developers Alternative: Accelerating Extinction
Marginal BenefitEuros Increased Marginal Cost
Marginal Cost
per hectare
Hectares per Over provision
Optimum0yearOver provision
Prof. Clive L. Spash ©2010
CREATING VALUES
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How Values are Being Conceptualised and Constructed
E i A h V l i f fEconomic Approach: Values as expressions of preferences
Step 1: changes in ecosystems services are specified
St 2 l d t t d illi t
e.g. land loss
St 3 l ‘ t d’ d
Step 2: value demonstrated willingness to pay
Step 3: values ‘captured’ and compared to the costs of action
Leading to the recommendation of market based ‘solutions’
Prof. Clive L. Spash ©2010
What is Required to Show Nature has a Money Value?Making Nature a human artefact
The Rise of Stated Preferences
ObjectificationCommoditisation
The Rise of Stated PreferencesContingent ValuationChoice Experiments
Benefits or Values TransferWhere numbers are lacking be pragmaticSeek alternatives
Ecosystems characterisation as “objects” with “money values”
Prof. Clive L. Spash ©2010
Making Ecosystems into Commodities
Ecosystems ObjectsEcosystems Objects
• services e.g. food provision, climate regulation, aesthetics
d th i tt ib tand their attributes e.g. security, feeling well, social cohesion
• comprehensive classification system:• comprehensive classification system:Millennium Ecosystem Assessment
• “classification is inherently somewhat arbitrary”classification is inherently somewhat arbitrary (Brauman et al., 2007: 69)
Service category ‘culture’sub-categories: spiritual, religious and aesthetic
Prof. Clive L. Spash ©2010
Economic Logic: People Should be Willing to Pay
Property rights and compensation
Poor
p y g p
Land grabs by the rich and powerful
Indigenous peoples are disenfranchised and made homeless
The poor sell cheaply
Rich or Poor
If they don´t care to pay then loss doesn´t matter, there is no value
Prof. Clive L. Spash ©2010
People’s PreferencesPublic perception of important attributes
Key iconic species
P f lPowerfulor
Warm & Fuzzy
Human Like
Prof. Clive L. Spash ©2010
Informing and Forming Preferences
Public cognition vs. ecologist vs. economistsg g
Encoding and decoding
Ecosystems integrity vs. bits the public prefer
Selective extinction of ‘unattractive’ species
Prof. Clive L. Spash ©2010
Implicit Model of Human Motivation
Motivation and PsychologySelf-preoccupied and self-centred modern individualpay or be paid
“I do not agree that more progress will be made by appealing t l ’ h t th th th i ll t ”to people’s hearts rather than their wallets”
(Costanza, 2006: 749)
Psychological egoism“the claim that people are incapable of regarding as important anything other than their own interests”anything other than their own interests
(Holland, 1995: 30)
Prof. Clive L. Spash ©2010
Misconceptualising Values
Markets and exchange value
1 C l d t di t f d i d b h i1. Can lead to crowding-out of desired behaviour
2. Fails to recognise harm does not equate to good
3. Can be transformative and/or destructive of valuee.g. Buying friendse.g. Love vs. paying for sexe.g. Love vs. paying for sex
Prof. Clive L. Spash ©2010
More Questions than AnswersWhose preferences count (informed vs. uninformed)?
What is the appropriate valuing population (local vs. global)?
Who should pay and why?Who should pay and why?
Should compensation be paid, to whom and why?
Wh t b t th f f f t ti ?What about the preferences of future generations?
How should preferences be aggregated?
What about preference weighting (e.g. income)?
Prof. Clive L. Spash ©2010
THE INSTITUTIONAL COCONTEXT
Prof. Clive L. Spash ©2010
The Raison d’être of Ecosystem Valuation
P ti liti l liPragmatism or political realismholding the view that this is what is necessary to communicate in the ‘real’ world, often combined with an expressed belief that there are no better alternatives and this will empower the politically weakno better alternatives and this will empower the politically weak—used by natural scientist such as ecologists
Political and economic idealismarising from a free-market, neo-liberal political philosophy; this sees the expression of all values via the market as the way the world should be run—used by industrialists and political leaders
Scientific empiricismi th t h l fl t t th d i ti l th targuing that such values reflect truth and in particular the true
preferences of individuals—used by orthodox economists
Prof. Clive L. Spash ©2010
Supposed Solutions: Have no fear the Bankers are here!
Provide corporations and financiers with business opportunitiesProvide corporations and financiers with business opportunitiesHardwiring biodiversity and ecosystems services into finance. Extend carbon trading and expand financial instruments to create biodiversity offset programs (TEEB 2010 p.22-24)( p )The market for wetland credits is estimated at US$1.1-1.8 billion
Show politicians how to get economic growth from ecosystems“i t t i t l it l t d f d j b d d i“investment in natural capital can create and safeguard jobs and underpin economic development, as well as secure untapped economic opportunities from natural processes and genetic resources.”“pro-biodiversity investment the logical choice” (TEEB 2010 p 10)pro biodiversity investment the logical choice (TEEB 2010 p.10)
Prof. Clive L. Spash ©2010
Markets and the Profit Motive
Carbon Credits, Palm Oil and Deforestation Biofuels are being promoted to reduce
greenhouse gasesgreenhouse gases
Plantations for palm oil in less developed countries hope to get carbon emission reduction credits to sell on the open marketp
Such credits allow firms elsewhere to pollute ‘efficiently’
Existing natural forests are cut down and wood Existing natural forests are cut down and wood sold and the land used for the new plantations
Peat forests and lands are drain for plantations releasing carbonreleasing carbon
Loss habitat, ecosystems and species; stored carbon; local oil for poor
Gain more pollution, palm oil exports and corporate profits, more industrial agriculture
Prof. Clive L. Spash ©2010
Understanding Environmental Ethics, Values and Politics
Two main concerns
1. The meaning of environmental values
2. The process for addressing environmental values
Prof. Clive L. Spash ©2010
Understanding Environmental Values
1. Some constituents of environmental values
recognising values cannot be reduced to a single figureg g g g
understanding community is different from individualism
comprehending value without usefulness to humansp g
refusing to trade for money is ‘rational’ and normal
importance of defending not compromising principlesp g p g p p
Prof. Clive L. Spash ©2010
Appropriate Institutional Processes
2. What is the appropriate process whereby values should be expressed?
markets vs. politics p
group vs. individual
hypothetical vs. actual
reflective deliberation vs. instant reaction
who such processes should represent (experts, vested interests, public)
and how (statistically, politically)
Criticisms based on principled arguments, which point toward the need for alternative approaches
Prof. Clive L. Spash ©2010
Participation and Value ArticulationTwo Contrasting Perspectives
EconomicsAppealing to pre-formed individual preferences
Applying statistical representationApplying statistical representation
Survey >1000 people 15-20 mins. interview
Political ScienceAppealing to process value formation
Applying political representation
o t ca Sc e ce
Small group (10-20) meeting over several days
Prof. Clive L. Spash ©2010
Institutions for the Articulation of Values
Need for judgement
Not optional merely hidden
Making judgement explicit
Informed judgment with accountabilityInformed judgment with accountability
Institutions for judgment
Deliberative fora (e.g. citizens juries)
Empowerment of silent voices (e.g. politically weak, poor, p ( g p y , p ,non-humans, future generations)
Scientists/experts and the public
Expert groups with accountability and transparency
Prof. Clive L. Spash ©2010
ConclusionMisguided grounds for debate
Ecologists, conservation biologist, environmental NGOs and others have bought into an orthodox economic model
This changes the discourse for species and ecosystem preservation and respect into a debate over prices and money
Neglect of value pluralism and non-market institutions
Wrong ‘solution’ to wrong problem
Population growth, land use change, development model, politicalPopulation growth, land use change, development model, political process, corporate power, financial greed
Institutions needed in which ethical and other deeply felt concerns ycan be properly voiced.
Prof. Clive L. Spash ©2010
DANKETHANK YOUTHANK YOU
www.clivespash.org
THE ENDTHE END
Prof. Clive L. Spash ©2010
