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THE PRICE OF PANDAS

The current crisis in biodiversity tells us loud and clear that conventional approaches to conservation have failed. “Paper parks”—named but barely protected—in developing countries are routinely violated by poachers and loggers. What areas are set aside for nature reserves are too small and too fragmented. At sea fishermen compete with each other in a global race to the bottom, knowing that if they do not catch the last bluefin tuna, someone else will. No wonder the 2010 Global Biodiversity Outlook report is full of ominous words and phrases like “serious declines,” “extensive fragmentation and degradation,” “overexploitation,” and “dangerous impacts.” To meet the planetary boundary, we need to make urgent changes in policy.

Biodiversity loss is fundamentally an enormous market failure, because the people that profit from destroying biodiversity are not generally the same people who lose out when the rain forests, mangroves, and coral reefs are finally gone. When palm-oil companies move into the last remnants of rain forest in Borneo, the biofuels they sell deliver benefits to shareholders and foreign consumers, but local people are the losers, as are all the rest of us because of the destructive impact on the world’s climate and ecosystems. Our chief task today is to design systems that value nature in a direct and marketable sense and deliver hard cash to those who are in a position to protect ecosystems in a reasonably intact state. What is needed is not more moralizing, but more money.

This kind of talk makes many environmentalists queasy. Greens generally view biodiversity conservation as a moral cause, and any discussion of financial mechanisms and marketing schemes arouses strong and principled opposition. Why should any other species, each with just as much right to occupy this living Earth as us, be forced to “pay its way?” This objection is understandable but wrongheaded: What I am proposing is not a liquidation of nature to make money, but using money simply as a convenient means to safeguard its protection. Money is a measure of value: Put a price on wild animals and plants and we will put a value on them too. This is a pragmatic strategy, only to be used in desperation because the others have failed.

But how can the value of natural systems be quantified, let alone brought into the market? A possible approach is to 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 kilometer for “high-biodiversity wilderness areas,” while another finds that “endemic bird areas” might be worth $88,710 per square kilometer.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 kilometer.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 U.S. 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