Biodiversity (1988) / Chapter Skim
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Part 5: The Value of Biodiversity
Part 5: The Value of Biodiversity
Pages 191-224
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From page 192... ...
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From page 193... ...
The positive issues are different, however; these fall squarely within our bailiwick and within those of the other social sciences that seek to explain and predict human behavior. As resource economists, it is one of our direct obligations to measure, explain, and predict how individuals and institutions manage natural resource systems, value biological diversity, and make decisions affecting its preservation.
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From page 194... ...
First, a person acting in a public role, e.g., voting as a citizen on an issue of social policy, may place a different weight on the welfare of future generations than he or she does in making private market decisions. Second, even if each person has a single set of preferences, members of the present generation may be willing to join in a collective contract calling for more savings but all while being unwilling to save more in isolation.
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From page 195... ...
To implement the theories, however, one needs empirical measurements of the type of risk preferences possessed by the decision makers, in the case of a positive analysis, or value judgments about the type of approach to decisions about risk that should be adopted, in the case of a normative analysis. As with discounting, there are also economic arguments about why private decision makers may be more or less averse to risk than would be appropriate for making social decisions.
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From page 196... ...
Second, trade between developed and developing countries has historically in' valved elements of coercion that are extraneous to the argument based on effi' ciency. Third, the calculation of relative production efficiencies and the estimate of gains from tracle involve trade-offs between gains to the present generation and potential losses to future generations through the depletion of nonrenewable re' sources and may be biased by the use of an inappropriate discount rate for the reasons mentioned above.
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From page 197... ...
Moreover, when they do analyze actual markets, economists are interested not in the market prices per se but, rather, in the patterns of selection and the types of preferences that these imply. Both direct and indirect techniques for eliciting or inferring the preferences of individuals have been greatly refined in recent years.
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From page 198... ...
Why should we care about what they think? A justification comes from the utilitarian ethical system that mainstream economics embraces.
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1970. Uncertainty and the evaluation of public investment decisions.
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Pretend we're having an ice cream social on an improved version of the space shuttle. Someone looks down and says, "What's the value of the life on that planet down there?
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From page 201... ...
All this averaging and multiplying will require that we use numerical values, so we might as well follow economists in trying to use present dollars as the unit of value. Before introducing the technical terms used by economists, let's start with some ordinary concepts: species can have value as commodities and as amenities, and they can have moral value.
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From page 202... ...
If existence values can be thought of as a rough indicator of moral values for present purposes, we can say that species also have considerable moral value, measurable in dollars. So, we can say with some confidence that some species have considerable com' modify, amenity, and moral value.
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From page 203... ...
to this the uses ant! option values of all dependent species, and so forth.
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From page 204... ...
Why are some people so insistent that we put dollar values on species diversity? Because, we are told, important decisions are being made that may extinguish other species.
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1985. Option Value and the Extinction of Species.
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During this past century, world agriculture has been transformed from a patchwork quilt of nearly independent regions to a global exchange economy. This change in social organization also contributes to the loss of diversity.
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From page 207... ...
Whereas natural historians have consistently portrayed the influence of humans as destructive of natural systems, we are now beginning to learn how traditional people at low population densities were less destructive and under some circumstances contributed to the growth of genetic diversity (Alcorn, 1984; Altieri and Merrick, 1987; Brush, 1982~. There traditional people created environments within which plants and microorganisms coevolved under selective pressures that were different from those that occur in environments only marginally disturbed by people.
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From page 208... ...
The adoption of modern technologies, however, must be understood in context of the complementary change in social organization (de Janvry, 1981~. The global exchange economy also induces temporal variation for which species have not evolved the strategies needed to cope.
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The differences between economic and ecological understanding help explain why the global exchange economy has led to extinction.
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There was considerable economic diversity in the past due to cultural diversity. How people interact with ecological systems today is heavily influenced by the signals common over large areas, yet unstable over time of the global exchange economy.
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1977. Economic models and ecology.
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One, for example, is that our ability to destroy diversity appears to place us on a plane above it, obliging us to judge and evaluate that which is in our power. A more straightforward explanation is that the dominant economic realities of our time technological development, consumerism, the increasing size 212
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In a few short years, this so-called value of the tropical rain forest has fallen to the level of used computer printout.
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From page 214... ...
Moreover, how do we deal with values of organisms whose very existence escapes our notice? Before we fully appreciated the vital role that mycorrhizal symbiosis plays in the lives of many plants, what kind of value would we have assigned to the tiny, threadlike fungi in the soil that make those relationships possible Given these realities of life on this infinitely complex planet, it is no wonder that contemporary efforts to assign value to a species or ecosystem so often appear like clumsy rewrites of "The Emperor's New Clothes." The second practical problem with assigning value to biological diversity is one for conservationists.
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From page 215... ...
If the California condor disappears forever from the California hills, it will be a tragedy: but don't expect the chaparral to die, the redwoods to wither, the San Ancireas fault to open up, or even the California tourist industry to suffer they won't. So it is with plants (Ehrenfeld, 1986~.
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From page 216... ...
I cannot help thinking that when we finish assigning values to biological diversity, we will find that we don't have very much biological (diversity left. REFERENCES Berry, W
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From page 217... ...
The mainstream economic approach is doggedly nonjudgmental about people's preferences: what the individual wants is presumed to be good for that inclividual. The ethical framework built on this foundation is utilitarian, anthropocentric, and instrumentalist in the way that it treats biodiversity.
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From page 218... ...
THE ECONOMIC APPROACH IS NOT LIMITED TO THE COMMERCIAL DOMAIN The explicit ethical framework of mainstream economics leads to the following definitions of value. To the individual, the value of gain (i.e., a change to a preferred state)
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From page 219... ...
the conceptualization of various kinds of option values, which are adjustments to total value to account for risk aversion and the irreversibility of some forms of development. To keep the value of existence separate and distinct from the value of use, existence value must emerge inclepenclently of any kind of use, even vicarious use.
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From page 220... ...
contingent valuation. The implicit pricing methods are applicable when the unpriced amenity of interest can be purchased as a complement to, or a characteristic of, some ordinary marketed goods.
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In contrast to the procedure of dis' counting, the SMS approach simply accepts that the costs of preservation may fall disproportionately on present generations and the benefits on future generations. Its weakness is that it redefines the question rather than providing the answers.
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From page 222... ...
Clearly, the empirical evidence is spotty at this stage, but these examples serve to counter the impression that high-quality empirical work on the value of diversity is not feasible. FURTHER COMMENTS ON THE MAINSTREAM ECONOMICS APPROACH The mainstream economic approach has a built-in tendency to express the issues in terms of trade-offs.
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From page 223... ...
The claim that it is useful to complete this utilitarian account does not depend on any prior claim that the utilitarian framework is itself the preferred ethical system. Environmental goals that may be served by arguments that the biota has rights that should be considered, or that it is the beneficiary of duties and obligations deriving from ethical principles incumbent on humans, may also be served by completing a utilitarian account that demonstrates the value implications of human preferences that extend beyond commercial goods to include biodiversity.
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