Putting a price on nature: a destructive delusion

The UK government’s assessment of the “value” of nature is pure reductionist gobbledegook, dressed up in the language of objectivity and reason. It delivers the natural world into the hands of those who would destroy it.

by George Monbiot
June 7, 2011

Love, economists have discovered, is depreciating rapidly. On current trends, it is expected to fall by £1.78 per passion-hour between now and 2030. The opportunity cost of a kiss foregone has declined by £0.36 since 1988. By 2050 the net present value of a night under the stars could be as little as £56.13. This reduction in the true value of love, they warn, could inflict serious economic damage.

None of that is true, but it’s not far off. Love is one of the few natural blessings which has yet to be fully costed and commodified. They’re probably working on it now.

Under the last government, the Department for Transport announced that it had discovered “the real value of time.” Here’s the surreal sentence in which this bombshell was dropped: “Forecast growth in the real value of time is shown in Table 3.”(1)

Last week the Department for Environment announced the results of its National Ecosystem Assessment, a massive exercise involving 500 experts. The assessment, it tells us, establishes “the true value of nature … for the very first time.”(2)

If you thought the true value of nature was the wonder and delight it invoked, you’re wrong. It turns out that it’s a figure with a pound sign on the front. All that remains is for the Cabinet Office to tell us the true value of love and the price of society, and we’ll have a single figure for the meaning of life.

The government has not yet produced one number for “the true value of nature,” but its scientists have costed some of the assets that will one day enable this magical synthesis to be achieved. The assessment has produced figures, for example, for the value of green spaces to human well-being. If we look after them well, our parks and greens will enhance our well-being to the tune of £290 per household per year in 2060.(3)

How do they calculate these values? The report tells us that the “ecosystem services” it assesses include “recreation, health and solace”, and natural spaces “in which our culture finds its roots and sense of place.” (4) These must be taken into account when costing “shared social value”. Shared social value arises from developing “a sense of purpose”, and being “able to achieve important personal goals and participate in society.” It is enhanced by “supportive personal relationships” and “strong and inclusive communities.”(5) These are among the benefits which the experts claim to be costing.

The exercise is well-intentioned. The environment department rightly points out that businesses and politicians ignore the uncosted damage their decisions might inflict on the natural world and human welfare. It seeks to address this oversight by showing that “there are real economic reasons for looking after nature.”(6) But there are two big problems.

The first is that this assessment is total nonsense, pure reductionist gobbledegook, dressed up in the language of objectivity and reason, but ascribing prices to emotional responses: prices, which, for all the high-falutin’ language it uses, can only be arbitrary. It has been constructed by people who feel safe only with numbers, who must drag the whole world into their comfort zone in order to feel that they have it under control.

The graphics used by the assessment are telling: they portray the connections between people and nature as interlocking cogs.(7) It’s as clear a warning as we could take that this is an almost-comical attempt to force both nature and human emotion into a linear, mechanistic vision.

The second problem is that it delivers the natural world into the hands of those who would destroy it. Picture, for example, a planning enquiry for an opencast coal mine. The public benefits arising from the forests and meadows it will destroy have been costed at £1m per year. The income from opening the mine will be £10m per year. No further argument needs to be made.

The coal mine’s barrister, presenting these figures to the enquiry, has an indefeasible case: public objections have already been addressed by the pricing exercise; there is nothing more to be discussed. When you turn nature into an accounting exercise, its destruction can be justified as soon as the business case comes out right. It almost always comes out right.

Cost-benefit analysis is systematically rigged in favour of business. Take, for example, the decision-making process for transport infrastructure. The last government developed an appraisal method which almost guaranteed that new roads, railways and runways would be built, regardless of the damage they might do or the paltry benefits they might deliver.(8)

The method costs people’s time according to how much they earn, and uses this cost to create a value for the development. So, for example, it says the market price of an hour spent travelling in a taxi is £45, but the price of an hour spent travelling by bicycle is just £17, because cyclists tend to be poorer than taxi passengers.(9)

Its assumptions are utterly illogical. For example, commuters are deemed to use all the time saved by a new high speed rail link to get to work earlier, rather than to live further away. Rich rail passengers are expected to do no useful work on trains, but to twiddle their thumbs and stare vacantly out of the window throughout the journey. This costing system explains why successive governments want to invest in high-speed rail rather than cycle lanes, and why multi-billon pound road schemes which cut two minutes off your journey are deemed to offer value for money.(10)

None of this is accidental: the cost-benefit models governments use excite intense interest from business lobbyists. Civil servants with an eye on lucrative directorships in their retirement ensure that the decision-making process is rigged in favour of over-development.

This is the machine into which nature must now be fed. The National Ecosystem Assessment hands the biosphere on a plate to the construction industry.

It’s the definitive neoliberal triumph: the monetisation and marketisation of nature, its reduction to a tradeable asset. Once you have surrendered it to the realm of Pareto optimization and Kaldor-Hicks compensation, everything is up for grabs. These well-intentioned dolts, the fellows of the Grand Academy of Lagado who produced the government’s assessment, have crushed the natural world into a column of figures. Now it can be swapped for money.

George Monbiot is the author Heat: How to Stop the Planet from Burning. Read more of his writings at Monbiot.com.

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References:

1. Department for Transport, April 2009. Values of Time and Operating Costs, TAG Unit 3.5.6.  http://www.dft.gov.uk/webtag/documents/expert/unit3.5.6.php

2. http://www.defra.gov.uk/news/2011/06/02/hidden-value-of-nature-revealed/

3. UK National Ecosystem Assessment, June 2011. Technical report, Chapter 26, Table 26.21
http://uknea.unep-wcmc.org/Resources/tabid/82/Default.aspx

4. UK National Ecosystem Assessment, June 2011. Synthesis of the Key Findings. http://uknea.unep-wcmc.org/Resources/tabid/82/Default.aspx

5. As above.

6. http://www.defra.gov.uk/news/2011/06/02/hidden-value-of-nature-revealed/

7. http://uknea.unep-wcmc.org/

8. The New Approach to Transport Appraisal. See http://www.dft.gov.uk/webtag/overview/appraisal.php

9. Department for Transport, April 2009. Values of Time and Operating Costs, TAG Unit 3.5.6. http://www.dft.gov.uk/webtag/documents/expert/unit3.5.6.php

10. See Keith Buchan, February 2008 for a powerful critique of this methodology. Decision-making for sustainable transport. Green Alliance. http://www.green-alliance.org.uk/grea_p.aspx?id=2670

Posted in Capitalism, Carbon Pricing

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Tom Livanos
5 years 3 months ago

An excellent piece on the limitations of cost-benefit analysis. I also agree with the previous commentator. Both however are conspicuous for their lack of any solution. Cynicism never solved anything in this world. My view is that politicians and public servants ought to discuss policy/potential policy with the public they are there to represent. Read the words. Public. Servants. Politicians are… elected. Representatives.

Reader, you should demand that both groups talk to you and others in your community. Your community. Irrespective of personal likes/dislikes, we are all interdependent. Be prepared to speak first and speak loudest. Also be prepared to defend another’s right to do the same – right to your own death if need be. We are nothing without our connections to others and other living creatures. I have already started doing so with letters to each and every member of my national parliament. What are you doing? If not you, then who?

Thanks and regards,
Tom Livanos.

PS. I have my email addresses within the profile content of my MySpace page which I have listed as my website. If you write to me, tell me how you found out where to find me.

5 years 3 months ago

Hilarious, but at the same time frightening. This is because George reflects an unconscious tendency within the general social psyche that is very worrying indeed. This tendency objectifies money which then enables it to be elevated to the position of being the ultimate measure of value.

How has this objectification happened?

The original purpose of money was to act as a record of commonly accepted value between the two halves of a mutual exchange of goods and/or services. This ‘recording’ enabled the two halves of the exchange process to be uncoupled from one and other, both in time and in location, thus releasing the exchange process from the constraints imposed by bartering. No matter what has happened to the conceptualisation of money since its invention the above actually remains its only real purpose.

Now for the multiplicity of exchanges that take place on a continuous basis in any society, an illiterate one at that which was surely the case in the early days of money, it was necessary to have physical notes and coins representing money because one could not only rely on written records. Given the existence of physical notes and coins I guess it was quite unconsciously easy for the objectification of money to start happening within the general social consciousness.

The objectification of money might have taken place unconsciously but it has not changed the reality that money, no matter how it is represented, is just a record of value accorded to real goods and services.

In this digital age we have the technology to completely replace physical ‘notes and coins’ with publicly viewable digital recordings of value. Each recording of, unit of currency, would have to have recorded with it the legal identity of its holder [possessor] and units of currency would remain in the possession of their current holder until transferred via the computer system to another holder. Not only that but we could also keep a publicly available history of the legal identities of the holders of any unit of currency. This would mean that the ‘moral colour’ of any unit of currency would be available to any person who wanted to view it. Money Laundering would no longer be possible unless the launderer was able to hack into the relevant computer systems.

In this way the public could be weaned off viewing money as an object of any kind and I think there would be far less acceptance of attempts at the commodification of nature and of human emotions.

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