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December 5, 2005: What's a Forest Worth? More Than You Might Think.

Canada

What's a Forest Worth? More Than You Might Think.

Jamais Cascio

WORLDCHANGING.COM

Money as a Tool – Finance, Venture Philanthropy, Trade and Economy

Ecosystem valuation is gaining momentum as a strategy to protect the environment while speaking the language of costs and benefits that governments and taxpayers understand. The classic environmentalist position that "nature is priceless" has, all too often, been translated into "nature is valueless;' ecosystem valuation confronts the price issue head-on, and increasingly often, comes up with compelling reasons why preservation provides more economic gain than resource extraction.

The latest example of the importance of this approach emerged last week in Canada, as the Canadian Boreal Initiative released a report (PDF) demonstrating that Canada's boreal forests -- which cover nearly 60 percent of the Canadian land mass -- are worth substantially more as ecosystem services than if cut down for lumber, cleared for mining, or inundated for hydroelectric power.

The estimated market value of boreal natural capital extraction, in 2002 dollars (the point the study began), is C$48.9 billion, minus an estimated C$11.1 billion in direct air pollution from the work and government subsidies, for a total of C$37.8 billion. The estimated non-market value of boreal ecosystem services in 2002 totaled C$93.2 billion. The ecosystem services are twice the value of natural capital extraction, even if costs are ignored:

The ecosystem services with the highest economic value per year are (1) flood control and water filtering by peatlands—$77.0 billion; (2) pest control services by birds in the boreal forests—$5.4 billion; (3) nature-related activities—$4.5 billion; (4) flood control, water filtering, and biodiversity value by non-peatland wet-lands—$3.4 billion; and (5) net carbon sequestration by the boreal forest-$1.85 billion.

The report is a terrific example of how to do natural capital valuation. It explains the methodology in great detail, and provides abundant evidence for both the market value of extraction and the non-market value of ecosystem services. These aren't numbers just pulled out of a hat; Canadian Boreal Initiative shows where they come from, and why they're valid.

We've talked about ecosystem valuation quite a bit. Some good places to start, if you're not familiar with the term: Joel Makower discusses ecosystem marketplaces; Alex writes about restoration for profit; Nicole Boyer tells us of the mainstreaming of environmental economics; and Hassan Massum gives us a lengthy exploration of environmental accounting and the new wealth of nations.

http://www.worldchanging.com/archives/0038...