Pennies for Puffins

In the last two decades of the 20th Century, environmental economists made tremendous strides in developing techniques to measure economic values when there are no markets (they call these “non-market valuation”).  These efforts grew out of the criticism of the environmental statutes adopted in the 1970s like the Clean Air Act or the Endangered Species Act.  Policy debates often focused on the value of environmental protection versus the effects of environmental laws on jobs and incomes.  If environmental protection could be expressed in dollar terms, it could be compared more easily to the value of other goods and services produced by market economies like ours in the U.S.  The argument was that calculating “non-market value” of the environment would avoid comparing “apples and oranges” in debates about environmental policy.

By the turn of the Century the logical extension of this thinking was to place dollar values on the services provided to humans by natural ecosystems.  In this approach, nature is valuable because it provides services to humans that would otherwise have to be engineered by humans and paid for.  So it was cheaper for New York City to provide clean water by setting aside land in the watershed north of the city in conservation than it would be to build water treatment plants.

In a recent issue of the Cornell Lab of Ornithology’s Living Bird magazine an article on the valuation of birds states the case for valuation:  “…talking about the ecological and economic benefits of birds raises peoples’ interest and support for bird conservation.”  If you know the dollar value of services provided by Puffins, Pewees, and Peregrines, than you will be more likely to support environmental groups that help preserve these birds and their habitats.  The problem is that this may not be so.  Ascribing dollar values to ecosystem services might not build support for the protection of the natural environment.

I expressed some of my skepticism of the ecosystem service valuation idea in a blog, Putting a Price on Nature.  New research from some of my UMaine colleagues reinforces my concern for relying on monetary arguments to justify environmental protection policies.  Sandra Goff (PhD from UMaine and now on the faculty of Skidmore College), along with Tim Waring and Caroline Noblet (faculty in the School of Economics at UMaine), just published in the prestigious journal Ecological Economics “Does Pricing Nature Reduce Monetary Support for Conservation?: Evidence from Donation Behavior in an Online Experiment,”.

In a carefully designed experiment, these scientists tested how using dollar terms to describe what services nature provides to humans affects individuals’ willingness to make donations to groups involved in preserving nature (Sierra Club, The Nature Conservancy, and the U.S. National Park Service).  It turns out that providing people with information about the dollar values of ecosystem services results in those people donating less to natural resource conservation.

In conventional economic theory expressing the value of nature in monetary terms should make people more, not less supportive of conservation.  The authors explore theories from economic psychology (ideas called motivation crowding and monetary priming) to help explain why people did not behave in the expected way.

My own bias is that many, if not most people understand that nature is different from toothpaste or cell phone subscriptions.  Using the metric that helps us navigate the mundane aspects of everyday life – money – is not appropriate for expressing the importance of nature.  In the language of some critics of ecosystem service valuation, this approach commodifies nature, making it of the same significance as bottles of wine or buckets of kitty litter.

Expressing the values of nature in dollar terms crowds out the more profoundly important aspects of nature to our lives.  Puffins are more than the pennies they save for us through the ecosystem services they provide.  They are worth saving in their own right.

Mark W. Anderson

About Mark W. Anderson

I am proud to be a Mainer, born in Caribou and schooled at Brewer High School, Bowdoin College, and the University of Maine. I am grateful for a 35 year career at UMaine, the last decade in the School of Economics.