It pays to save: Science study shows huge economic benefits from conserving wild nature

August 08, 2002

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Along with the social, cultural, and moral arguments for conserving nature, here's one more reason to keep wild areas wild: cold, hard cash. A study in the 9 August 2002 issue of Science, published by the American Association for the Advancement of Science suggests that "a single year's habitat conversion costs the human enterprise, in net terms, on the order of $250 billion that year, and every year into the future."

Although habitat destruction continues unabated throughout the world, mounting evidence suggests that this trend is a bad economic bargain. From tropical forests to ocean reef systems, roughly one-half of an ecosystem's total economic value is lost when that ecosystem is converted from its wild state to human use, according to the Science study.

The Science team estimates that a network of global nature reserves would ensure the delivery of goods and services worth annually at least $4400 billion more than goods and services from their converted counterparts, making the benefit to cost ratio more than 100 to 1 in favor of conservation.

"The economics are absolutely stark. We thought that the numbers would favor conservation, but not by this much," says lead author Andrew Balmford of the University of Cambridge, U.K.

Balmford and colleagues compared the difference in the value of economic benefits provided by relatively intact ecosystems and by converted versions of those ecosystems. Although they reviewed more than 300 case studies of such conversion, they only identified five examples that met their rigorous standards for comparing benefits.

The economic value of an ecosystem can be measured in terms of the "goods and services"--including climate regulation, water filtration, soil formation, and sustainably harvested plants and animals--that the ecosystem provides.

Pricing these goods and services is difficult, since they include items that aren't bought and sold as part of a market-driven, conventional economy. Instead, economists assign values non-marketed services using a range of techniques, from estimating the cost of replacing these products, to assessing how much individuals and nations would be willing to pay for each ecosystem service.

The five case studies analyzed in Science included conversion of a Malaysian tropical forest by intensive logging, a tropical forest in Cameroon converted to small-scale agriculture and commercial plantations, a mangrove system in Thailand converted for shrimp farming, a Canadian marsh drained for agriculture, and a Philippine coral reef dynamited for fishing.

In each case, the loss of ecosystem services such as storm and flood protection, atmospheric carbon sinks, sustainable hunting, and tourism outweighed the marketed benefits that came with conversion. The total economic value of the intact ecosystems ranged from 14 percent to nearly 75 percent higher than the converted ecosystem values.

Despite this tally, the net benefit of conservation is generally ignored, compared to the short-term, private economic gains that often accompany conversion. Lack of information about the economic worth of ecosystem services, the failure of markets to "capture" and value these services, and tax incentives and subsidies that encourage land conversion all contribute to continued habitat destruction, say the Science authors.

"We need to tackle all three of these, and there's no reason not to tackle all three at once. However, in terms of immediate 'bang for buck,' directly challenging subsidy schemes is a good way to improve both economic efficiency and the environment," says Balmford.

Researchers and policy makers are exploring several different ways to bring nature into the marketplace, says Balmford. Devices such as carbon taxes and credits, premium prices for certified, eco-friendly products, and even direct payments to the communities that live in globally significant conservation areas are under consideration.

The last proposal is somewhat controversial, but it may provide a way to compensate those communities for their reduced opportunities to exploit ecosystem resources, while reflecting the major global benefits of conservation, according to Balmford.

"There's a growing feeling that if what you're really after is conservation benefits, you may sometimes need to pay for that directly," Balmford notes.

The Science study highlights the need for further data on the economic worth of wild nature, especially as there are few signs that global ecosystem loss is slowing down. On the eve of the World Summit on Sustainable Development in Johannesburg, natural systems are changing from their intact state at a rate of 1.2 percent per year, or 11.4 percent in the decade since the last sustainable development summit in Rio de Janeiro.

"People are hearing a message that nature is being eroded, but it takes a while to sink in, even for me. One third of the world's wild nature has been lost since I was a child and first heard the word 'conservation'-that's what keeps me awake at night," says Balmford.
-end-
The other members of the research team include J. Madden, K. Munro, R.E. Green and K. Trumper at University of Cambridge, U.K., A. Bruner at Conservation International, Washington, D.C., P. Cooper, V. Jessamy, J. Paavola, S. Rosendo, and R.K. Turner at University of East Anglia, Norwich, U.K., R. Costanza at University of Maryland, Solomons, MD, S. Farber at University of Pittsburgh, P. Jefferiss and M. Rayment at RSPB, Sandy, U.K., M. Jenkins at UNEP-WCMC, Cambridge, U.K., N. Myers at Green College, Oxford, U.K., S. Naeem at University of Washington, Seattle, and J. Roughgarden at Stanford University. R.E. Green is also at RSPB, Sandy, U.K.

This research was supported in part by the RSPB and the UK Government's Department for Environment, Food, and Rural Affairs.

American Association for the Advancement of Science

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