Valuing the Environment

By Matthew Cimitile, cimitile@msu.edu
Great Lakes Echo

EAST LANSING – There are economic, environmental and social benefits in sustainably managing governments and businesses. There are also costs for not doing so. The field of ecological economics studies the costs and benefits of the interaction between the human and the natural world.

Daniel Kramer is an assistant professor at Michigan State University with joint appointments in Fisheries and Wildlife and James Madison College. His research details the human side of conservation biology; the interaction between humans and nature as it pertains to conserving biodiversity. Currently he is researching the environmental and economic impacts of a newly constructed road for 12 isolated communities on the Caribbean coast of Nicaragua. Kramer is also looking at the effects of establishing protected areas on future residential development in Michigan. He sat down to discuss further the role of ecological economics?

MC: Why did ecological economics come about?

DK: “It came out of a concern that economics did not take nature or the natural world as seriously as it should. The main critique from ecological economists is that traditional economics treats natural systems as distinct and separate from human systems. It was the goal of ecological economics to integrate those two systems in a holistic fashion and blur those lines between natural and human systems.”

MC: What does this school of economics include that the traditional concept does not?

DK: “Economics is really focused on human systems. Natural systems enter or interact with human systems to the extent that they provide us with resources that we use to convert into other things and they serve as repositories for our waste. We extract things from nature, process them through our human economies and then we dump them back into nature. But this is not the whole story and there are repercussions for doing so on both ends. Some of these repercussions will feedback on human systems.”

Now, all economists want to conserve resources to the extent that they think it is the efficient thing to do. But there are different notions of efficiency. For example, a traditional economist may think that ecosystem services (carbon sequestration by trees or storm surge protection by wetlands) cannot be valued. While making decisions, they may not account for the values gained or the costs to those systems based on human actions. Ecological economists based on their philosophy would take into account the costs and benefits associated with human actions on natural systems. So for ecological economists the human and natural systems are not distinct but much more of a very complex, very integrated system.

Ecological economists also put greater emphasis on things like justice, equity and maybe most importantly scale. They ask the basic questions like are we growing too much or does our world have the capacity to support human population? These types of questions may be implicitly looked at in regular economics but not as explicitly as ecological economics.

MC: Can you provide a specific example of how this type of economics is used?

DK: “A famous paper put out by Robert Costanza, an ecological economist, wanted to value the world’s ecological services. The goal of the paper was to put a dollar value on the entire planet’s ecosystem services, so he looked at water filtration, soil production, regulation of atmospheric gases, biodiversity, etc. He came to a value of $33 trillion. Now, the point of the paper was not so much the value because you could be skeptical and say that seems like a very gross underestimate of infinity. The paper is essentially what the world is worth and $33 trillion seems like a lowball estimate.

But it was really a mental exercise to say these things are worth something and when we are operating in our world and making decisions that have repercussions on the natural world, we should take those values into account.”

MC: What do you see as the overarching goal of ecological economics?

DK: “Ecological economists want a sustainable human and natural system. This is not to say mainstream economists don’t, nor is it fair to say economists don’t think about the environment. But I do think ecological economics pays more attention and is very aware of the linkages between human and natural systems. So certainly a goal is to do the things that we humans do and get everything that we desire as humans but to do so without adversely impacting the natural environment.

And a key area of emphasis is intergenerational equity. It’s not fair for this generation to use up fishery resources or soil resources and leave nothing for future generations. The distribution of resources should not only be equitable today but its allocation over time should also be fair.”