The Value of Nature

The Value of Nature

Why have some gifts of nature remained free?

In classical political economy, natural agents appear as contributors to production, conventionally understood: sheep’s viscera help produce wool; wind drives the sails of merchant ships; fertile soil helps crops grow. But each of these is dependent on countless others that go unmentioned. Soil is “produced” by countless worms, fungi, mites, and other insects, which decompose organic debris and transfer nutrients between plants. Bacteria in the sheep’s gut help the sheep digest grass; bees pollinate the plants the sheep eat; the plants capture solar energy and convert it to a form the sheep can process—which brings us back to the soil. Even the wind wouldn’t blow in the same way without temperature patterns linked to global climate regulation, itself maintained by a complex array of living systems. These natural agents don’t go directly into commodity production—but they regenerate the ones that do. More than that, they constitute Earth’s “life support systems”—the carbon cycle, water purification, soil fertility, and other elements that make the planet habitable. Thus, anthropologist Anna Tsing argues, “making worlds is not limited to humans.” Rather, “all organisms make ecological living places, altering earth, air, and water.” These multispecies activities are more than world-making: they are planet-making. The actions and interactions of various life forms, from amoebas to sequoia, have over millions of years shaped Earth’s very geology and atmosphere so significantly as to make it a qualitatively different kind of planet than Mars or Venus.

These planet-making abilities, however, are in serious decline. “We are currently damaging [the natural world] so profoundly that many of its natural systems are now on the verge of breakdown,” David Attenborough warns. Warning signs have long been on the horizon. In 1973, amid debates about resource scarcity and the limits to growth, the economist William Nordhaus noted—in a piece otherwise refuting ecological doomsaying—that “if the price system malfunctions, as is currently the case for free but scarce public environmental resources—then perverse outcomes are possible.” Five decades later, this “malfunction” persists, and perverse outcomes have materialized. “The value of natural entities such as mangroves, wetlands, and coral reefs,” the economist Partha Dasgupta observes, lies in their contributions to human well-being, which “don’t appear in the marketplace.” As the ecologist Gretchen Daily argues, “The disparity between actual and perceived value is probably nowhere greater than in the case of ecosystem services.” Two common strategies for rectifying this disparity have emerged.

The first strategy proposes to price nature, often described in terms of “natural capital” or “ecosystem services,” intended to draw attention to ecosystems’ economic contributions. It is exemplified by a statement by Henry Paulson,...