Chapter 44 : The Value of Biodiversity

Abstract:

A voluminous literature exists on the nature of the value that resides in or is conferred on biological diversity. For many, value is an intrinsic property of biodiversity and not something that can be conferred on it by human pertiception. For if it is tradable, then we can find justifications for losing at least some biodiversity, and perhaps a justification for losing rather a lot of it. First, it is not remotely feasible to conserve all biodiversity—any real world resident would acknowledge that proposition. Second, conservation is not costless. Whether the proximate destroyer of biodiversity is a polluter, a frontier agriculturist, or a logging company, the real causes of biodiversity loss are financial. What economists do is show that these financial equations are incomplete and shortsighted because economics is concerned with the well-being of individuals, whoever they are. The science of environmental economics is, among other things, concerned with eliciting the willingness to pay (WTP) for nonmarket ecological services such as carbon sequestration and biodiversity provision. The economic benefits of biodiversity comprise three general components: the contribution to ecosystem functions, nonuse values, and the contribution to ecosystem resilience. A final consideration in the valuation of biodiversity concerns the value of biodiversity as information. What is missing is the economic value of delaying the losses until more and better information is gathered about the information content of biodiversity.