try to assign an imputed shadow price to the ecosystem services – fresh water, clean air, recreational benefits and so on – that different habitats deliver. One study suggests a value of $200,700 per square kilometre for ‘high-biodiversity wilderness areas’, whilst another finds that ‘endemic bird areas’ might be worth $88,710 per square kilometre.46 The imputed value of coral reefs – as destinations for tourism, nurseries for commercially valuable fish and shoreline protectors against storms, for example – has ranged from $100,000 to $600,000 per square kilometre.47 The values of individual species have also been quantified, based on estimates from public surveys of ‘willingness to pay’ to prevent their elimination. Using this methodology (and in 2005 US dollars) the Eurasian red squirrel is worth $2.87; the California sea otter $36.76; the giant panda $13.81; the Mediterranean monk seal (almost extinct): $17.54; the blue whale: $44.57; the brown hare: $0.00; the Asian elephant: $1.94; the Northern spotted owl: $59.43; and the loggerhead sea turtle: $16.98.48
One team of scientists, led by Robert Costanza – a member of the planetary boundaries expert group – even went so far as to publish an aggregate monetary value of the whole biosphere. There is a conceptual flaw in this, as many have pointed out, because the human economy is a subset of the natural biosphere and could not in any conceivable way replace it. As one environmental scientist sniffed: when it comes to pricing the biosphere as a whole, ‘there is little that can usefully be done with a serious underestimate of infinity.’49 Even so, Costanza and colleagues came up with a precise figure for ‘the total economic value of the planet’ of $33 trillion per year (as compared with a total global GNP of, when the paper was written in 1997, $18 trillion).50
The problem with these figures however is not that they are too precise but that they are not real. No one pays anyone else $33 trillion a year to protect the planet from destruction, nor are any of us actually forking out $17.54 to keep Mediterranean monk seals from going extinct. Yet in a globalised capitalist economy actual, real-world revenue flows are essential if they are to compete with the commercial drive that is destroying and displacing the remaining bits of natural ecosystem worldwide. Mangroves may be valuable as protection against storms and shelter for fish, but someone needs to be paid to look after them if they are not to be chopped down to make way for lucrative shrimp farms. In other words, a financial constituency needs to be created that has a vested interest in protecting its assets – assets that are, in this case, natural rather than commercial capital.
The starting point for this process has to be valuing natural capital. As Pavan Sukhdev, lead author of the 2010 The Economics of Ecosystems & Biodiversity (TEEB) report, is fond of saying: ‘You cannot manage what you do not measure.’ One of the report’s key recommendations is that the present system of national accounts should be ‘rapidly upgraded to include the value of changes in natural capital stocks and ecosystem service flows’. The TEEB report consciously encourages the use of banking and accounting terminology with regard to biodiversity: its authors have launched a ‘Bank of Natural Capital’ website to encourage wider awareness of the ideas it raises. This even extends to proposing an ‘internal rate of return’ for ecosystems, which varies from 40 per cent for woodlands to 50 per cent for tropical forests to 79 per cent for better-managed grasslands.51 ‘The flows of ecosystem services can be seen as the “dividend” that society receives from natural capital,’ the TEEB Synthesis Report suggests.52
If this all sounds rather capitalistic, it is worth noting that the biggest losers from the current largely unregulated and unquantified degradation of natural capital are the world’s poor. The TEEB report stresses that forests and other natural ecosystems make an enormous contribution to the so-called ‘GDP of the poor’ (up to 90 per cent) and that conservation efforts can therefore directly contribute to poverty reduction. In contrast, one estimate of the ‘environmental externalities’ (the off-balance sheet costs offloaded onto the environment) of the world’s top 3,000 listed companies totals around $2.2 trillion annually.53 All of this value is going into the pockets of corporate shareholders, where it is unlikely to benefit the poor. Moreover, insisting that natural systems are priceless, as many campaigners do, is in practice akin to setting their effective price at zero. The language and practices of economics may offer the strongest tools today for use in nature conservation.
But these imputed values need to be translated into real monetary worth if the natural assets that generate them are to be properly protected. One of the most promising ways of doing this is known as ‘payments for ecosystem services’ – designing revenue streams that go to communities and landowners who need to be persuaded to keep wetlands and forests intact. In Mexico the annual rate of deforestation has been halved since a 2003 law allowed a portion of water charges to be paid out to landowners willing to preserve forest lands and reduce agricultural clearances. So far 1,800 square kilometres of forest have been protected at a cost of $300 million, both safeguarding biodiversity and reducing greenhouse gas emissions to the tune of 3.2 million tonnes.54 In the Maldives, whose government I work for as an environmental adviser, one of the schemes under consideration is a levy on diving trips to fund the creation and policing of marine parks. Thus those who benefit from biodiversity – the foreign tourists who marvel at the reef sharks, manta rays and myriad of brightly coloured reef fish that swim around Maldivian coral atolls – can be asked to pay to conserve it.
In other countries, ‘biodiversity credits’ are being designed that might offer a revenue stream rewarding those who protect and manage biodiverse habitats. In New South Wales, the state govern-ment’s environment department has set up a ‘BioBanking’ scheme where developers and landowners can trade biodiversity offsets. Some private companies have been making similar pioneering moves: in Borneo the local government has partnered with the Australian company New Forests to provide an income for the protection of its 34,000-hectare Malua Forest Reserve. Both individuals and businesses can purchase ‘Biodiversity Conservation Certificates’ that represent the ‘biodiversity benefits of 100 square metres of protection and restoration of the Malua Forest Reserve’ – habitat for ‘endangered wild orangutans as well as gibbons, clouded leopards, pygmy elephants, and over 300 species of birds’, according to the Malua BioBank website.55
As with carbon offsets, aimed at mopping up an equivalent amount of greenhouse gases to those unavoidably released elsewhere, a partnership between businesses, governments and conservationist groups is currently developing the concept of biodiversity offsets. Their goal is to design offsets that compensate for biodiversity impacts arising from business activities like mining and dam-building, potentially raising considerable sums to protect and enhance ecosystems elsewhere. To count as offsets, schemes must be additional to what would otherwise have happened, provide benefits that last as long as the damage they are intended to address, and deliver equitable outcomes that bring benefits to local people and communities. In addition, offsets are recognised as only being appropriate as a last resort: the so-called ‘mitigation hierarchy’, in order of importance, is avoid, minimise, restore, and only then offset.56 Like achieving carbon neutrality, the principle of ‘no net loss’ of biodiversity – or even better, ‘net positive impact’ – should and hopefully soon will become part of mainstream business practice.
Protecting natural systems can provide value for money even in the most direct sense. Creating marine protected areas enhances fish stocks, providing benefits both to biodiversity and fishermen in neighbouring areas. The World Bank and UN Food and Agriculture Organisation have estimated that $50 billion is lost each year in terms of economic benefits that could be realised if the world’s fisheries were managed sustainably.57 It may seem