Break

No new posts for a while - I'm currently traveling around the south island and can't be bothered writing.

An 800 lb (million dollar) Gorilla

The Boston Globe published and opinion piece over the weekend that broadly summarizes the concept of ecosystem services (unrelated: the Globe needs to get their internet act together.  This isn't the 90s anymore, come join the NYT and the WSJ in the 21st century).  I’ve been meaning to write something about this for a while so I suppose now is as good of time as any to do that.  I’ll start by saying that I thought that the piece was both fair and well informed.  It didn’t do the details of the issue justice, but as an introduction it was fine.  I’d dispute the tagline though – ‘ecosystem services’ is neither a new idea nor a particularly bold one.

As the article notes, it has been around since the mid-1970s, and in many ways the foundations of the idea have been around far longer than that.  At its heart, the principle of ecosystem services is nothing more than a recognition that humans are dependent upon services that are offered by the natural environment.  When we do not manage our activities to be in harmony with the surrounding environment we have a tendency to destroy these services.  As a result, a successful society is one that lives in harmony with the earth and recognizes that it is a system, of which we are only a part.  Sound familiar?  Granted, the introduction of money into the system is a new twist, but I can’t be the only one who sees more than a little irony in the fact that the West, and America in particular, is just now coming to this view.

Ironic or not, our gradual awakening to the fact that primitive societies might not have been as primitive as they seemed is very important and not without controversy.  As Tuhus-Dubrow and numerous others have noted, there is significant pushback against the idea of ecosystem services from some environmentalists.  Arguing that nature is much more than any dollar value we could assign it, they argue that our time should not go towards assigning dollar values but advocating for the protection of nature because of it’s priceless value to humanity.  While I tend to agree that there are many more reasons to protect the environment than the services it provides for humans, I reject the argument that we should not be assigning dollar values.  If we argue that nature should be protected because it is priceless there is a very real danger that it will not be protected precisely because it is price less. 

Not everyone sees nature as a priceless asset.  Unless a dollar value is assigned to at least some of it, then it will be given a zero value.  I see the problem as more severe than the justification, given in the article, that nature is given a value of zero by default.  That presumes people haven’t thought about the value of nature but, if they did, would give it more than a zero value.  I don’t believe that.  A large part of society will, and does, actively assign a value of zero to the environment – and in some cases assigns it a negative value in that they view the taming of the wild as progress.  This view cannot be countered by the argument that nature is valuable because we can’t value it.  It must be countered with specific and quantifiable data. 

However, the usefulness of ‘ecosystem service’ valuation is not limitless, nor are those who oppose its use entirely wrong.  They correctly point out the danger, in assigning dollar values, that the objects to which the dollar values are assigned become nothing more than those values.  When it becomes economical to replace them, based on the estimates of their value, they are replaced with no consideration for intrinsic value. 

While correct, this is not a reason to avoid ‘ecosystem services.’  Rather, it is the reason why ‘ecosystem services’ must be stressed as the minimum possible value that these things have, and that decisions to eliminate them must encompass many more variables.  The U.S. Department of Transportation has reduced human life to a numeric value – in the low millions – and uses this to assess whether certain policies should be enacted.  No one would argue that human life has hence been reduced to a numeric value.  Nor, I would suggest, that this statistical value of a human life is the only consideration in policies that may cost human life.  Nature can, and must, be dealt with in the same way.  Assigning values is only one part of the process but it is a vital one.  Without quantifiable data environmentalists are fighting an uphill battle against those who speak in dollars and cents. 

Finally, because I think that there is an important caveat to the discussion that is often glossed over – and certainly was in the article – I’ll leave you with the idea that there are two categories of environmental goods.  There are those that have a clear value in our current economic system but are not accurately priced, and those that currently have no clear value (and, obviously, are not accurately priced).  The first category includes things like mountain views (of which I am particularly fond) and carbon emissions.  These are goods that can, with some ingenuity, be accurately priced and included in our markets.  That they are not represents a significant market failure that should be addressed (especially with regard to carbon emissions).  The second category includes things like wildlife, wilderness, and a pristine environment.  These things can be valued – an African mountain gorilla was recently valued at USD 4 million based on tourism revenue – but the fact that they are not does not necessarily represent market failures.  I believe that having a value in these cases is still useful but one must be much more careful about the terms of the discussion.  A gorilla should be protected for its own sake, not just because it brings in 4 million from tourists. 

Trade for Development

So the conference that I was involved in earlier in my trip had a follow-up session this weekend.  The end result of that conference was a short statement we gave this afternoon.  I don't want to write the whole statement in case other people at the conference have issues with that but I'll post the section that I had a hand writing.  Enjoy.

______

 

The reasons why climate change is a slow crisis are obvious - it's invisible, it doesn't directly affect individuals, and it is very technical.  Poverty is none of these things.  2 billion people live in poverty and we all know it.  Why are we still struggling to address it?  By 2020, 3 billion people will live in poverty.  Poverty is as much a crisis for our generation as climate change.  

So what do we do?

We must tackle poverty with the same collaborative urgency needed to stop climate change.  This will mean redefining success to be more than simply GDP growth but also about finally taking responsibility for all of the effects of trade agreements. 

Now, while trade is not the only way to solve poverty, it is through trade agreements that governments deal internationally with economic issues.  It is the driving force behind the NZ-US partnership that brings us here today.  As a result, trade agreements in the future must deal effectively with poverty. 

Trade agreements must be reoriented to emphasize international development as well as profits. 

Applying our definition of success in this context we want to see a global trade agreement in which trade barriers - both tariff and non-tariff - are eliminated in the developed world with respect to the developing world.  In practice this would mean that countries with the highest GDPs and highest per capita GDPs eliminate barriers on goods from countries with both a lower GDP and per capita GDP.  It directly promotes development by allowing the developing world access to the markets of the developed world while at the same time giving them control over their domestic industry.  

The reasons why this benefits the developing world are obvious.  It is less clear why the developed world would, or should, get behind this.  The answer comes when you see the long-term elements of the program.  

The leaders of today are benefiting from the leadership of the last generation; who took specific actions to help China open to the West.  Today Starbucks makes more money from their stores in Shanghai than in New York City.  By 2015 they will triple the number of stores they have in China.  

If the current leading generation reorients trade towards development it will lead to the same benefits for our generation.  It is an investment by the developed world in the global future that will pay dividends for our generation.  

For too long the West has made decisions on very short time horizons.  It is now time for leaders to recognize that there are long-term benefits to development for everyone and if trade is the chosen medium to reduce poverty and promote development it must be fair and equitable trade. 

The first step in this process is crafting a bi-lateral agreement between the US and NZ in which the US truly opens its markets and removes all trade barriers.  It means providing labor protection for those who will lose in trade, financed in part by those who win from trade.  It means that NZ, in turn, opens its markets to those in the rest of the Pacific basin who are still struggling in crippling poverty.  

Such a relationship will serve as the first step in crafting global trade policy that equitably addresses poverty and leads to global growth, an inclusive society, a sustainable environment and is truly successful.

Bill Gates Could Save Biodiversity

Well, not quite. More accurately he could put up the first two and a half years of capital to preserve at least 10% of the land in every major climactic region on the planet (although with climate change his selections may not stay in their climactic region for very long). In a paper published in Nature in 1999 it was estimated that 15% of the world’s land area – the roughly 5% currently protected plus 10% strictly preserved to protect biodiversity – could be purchased and managed for roughly 23 billion annually. Bill Gates is worth somewhere between 50 and 55 billion dollars (and that is personal wealth, it doesn’t consider what he could mobilize through his foundation). The math is quite easy: 23 billion + 23 billion = the first two years of protection and some pocket change.

The numbers are even more impressive if you consider Warren Buffet’s wealth as well. Gates and Buffet have recently been involved in some high profile lobbying of the extremely wealthy, trying to get them to give away their money. So assume Buffet joins Gates in a quest to save the natural world. Between the two of them they have around 100 billion. That would get the project started and almost five years of funding and by that time I’m sure they could pull in some other donors.

Yes, it will never happen. But it’s a nice thought. No one is quite sure what Gates and Buffet plan to do with all of their money but they could have a massive impact on global conservation if they were to direct even half of their money that way. Today the global budget for wildlife conservation is less than 10 billion dollars. Imagine what could be done if that were doubled or tripled.

The nearly microscopic size of the current budget is the real take away from all of this. The U.S. alone has spent more than 15 billion a year in direct farm subsidies since the mid 1980s. We spent a little less than 10 billion a year on oil and natural gas subsidies from 2002-2008 and that hasn’t changed much since 2008. Neither of these is a necessary subsidy. In fact, have significant distortionary effects on global markets and, arguably, the competitiveness of the U.S. economy. If either or both were eliminated and the money shifted to conservation the impact on conservation efforts would be colossal. Again, it will never happen but it doesn’t hurt to think about where our priorities are and where they should be.

The Ants Go Marching Hurrah, Hurrah

So I was watching BBC Earth last night and saw an interesting piece on insects around the world.  One of the species they talked about in particular was the grass cutter ant.  These ants live in colonies of up to 8 million individuals across South America and Africa.  What caught my attention, however, is the system the ants have developed to produce their own food.  They are, in effect, (ant) farmers.

Within any given colony there are several different types of ant, from scout to cutter, that each of defined roles within the community.  Of primary importance here are the cutters.  They venture out from the colony and harvest up to 34 lbs of grass a day to bring back to the colony.  However, they are incapable of digesting the cellulose in the grass.  So, instead, they coat the grass with their saliva and feed it to the fungus that they cultivate underground.  They then eat the fungus.

All of this is quite cool but then things got really interesting.  See, when the fungus grows it produces CO2.  Because the ants respirate and because the fungus is grown in closed spaces underground this is a problem for the ants.  Left alone the CO2 would fill the colony and the ants would suffocate.  So the ants have created a rather unique system to ventilate their colonies by taking advantage of pressure differences between the areas where they grow fungus and dirt towers they construct on top of their hives.  This causes air movement across the fungus and clears out the CO2 and keeps the ants from killing themselves through their own farming.

The parallels should be obvious.  Now, I’m not suggesting that we ventilate the earth by poking holes in the atmosphere and letting all the CO2 out.  But it is nevertheless interesting to note that we are not the only species with this problem of CO2 production.