How Much Is Nature Worth

Whether through voluntary offset mechanisms, government-mediated payment schemes, or full-fledged markets in offsets, the concept of payment for biodiversity services is beginning to take hold. More important, these approaches are beginning to subvert the current economic model that is blind to the value of biodiversity, to the services that species and ecosystems provide, and to the costs inherent in destroying the natural wealth on which human well-being depends.

The problem these systems are trying to address is self-evident: When iPods are valued over whale pods, the economic system will deliver ever more species of iPods and wipe out yet another species of whales. When wet

SPECIAL SECTION: PAYING FOR NATURE'S SERVICES Banking on Biodiversity lands are seen as nothing more than mosquito-infested swamps, they will lose out to shopper-infested malls. And as land becomes ever more scarce, the problems will simply be aggravated. The economic system is not broken. It is doing exactly what it was set up to do: deliver more of what people value—or at least more of what the imperfect price signals say people value—and less of what they don't.

As this chapter documents, the solution to the problem may actually lie in using markets and the economic system to our advantage. Imagine how powerful it would be if market forces—the same market forces that have inexorably pushed for the destruction of rainforests and the extinction of countless species—could be used to protect species, to give them a real value in people's everyday decisions of what to eat, what to wear, and what to buy.

To return to the questions at the start of this chapter: How much should society be prepared to spend to protect nature? The answer will in large measure determine whether humanity ends up living in a world of whales, wild tigers, and wetlands or a world of pavement, iPods, and pollution. Better yet, we can hope that through a form of economic jiu-jitsu these market mechanisms will make it possible for the pavement and the iPods to co-exist comfortably with the whales and the wetlands.

CHAPTER 10

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