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Factoring the environment into economic calculations Part 2 |
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 Because of the intensification of farming in Southland and the West Coast, wetlands are still being drained, Dr Mike Joy senior lecturer in environmental science/ecology in Massey University says.
Wetlands are home to numerous fish and bird species and perform vital ecosystem services, such as improving water quality. They also help manage climate change. Peat bogs are year-round sinks of 2 to 5 tonnes of carbon per hectare, locking it up in their soil indefinitely.
And when it rains, wetlands reduce flood risks by absorbing water. Therefore, Dr Joy says, wetlands have an economic value - think of how much it costs to repair flood damage. But no one puts dollar values on intact ecosystems.
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"Often the assumption is, if you take, say, a wetlands or a forest for farmland, the country is better off. Often that is not true - the opposite is true."
The same logic suggests building housing developments along the coast makes a community better off.
"But if you if leave [the area] alone, the ecosystems are still there to protect the lands from storms. But once you start developing those areas and get rid of dunes and protective areas, storms do a huge amount of damage inland.
"You could put a (dollar) value on the dunes that is way above what it is worth to turn [the land] into housing or farmland, because to leave it alone would protect the hinterland."
Hurricane Katrina is an example. About 1900 square miles of wetlands along the Louisiana coastline had been drained in the 100 years prior to the hurricane.
Had the wetlands been left intact, damage from the hurricane would have been considerably less. American ecological economist Robert Costanza has attempted to put a value on the hurricane protection provided by US coastal wetlands. He has estimated the storm-protection value of Florida's coastal wetlands at US$3190 per acre annually.
New Zealand Centre for Ecological Economics (NZCEE) principal ecological economist and deputy director Marjan van den Belt says, the services humanity get from ecosystems, which include natural resources such as oil and gas, are free.
"We don't put a number on those services. We don't consider it a capital, therefore it's not taken into account when we do decision-making."
Forests control erosion - that's a service provided by an ecosystem. If the forest is chopped down, especially on the steeper slopes, the soil ends up in the waterways, causing problems for the freshwater systems, she says.
"I personally think it is a good idea to take those impacts into account as well. [It] broadens the indicators you measure with to see if you are doing good or not good."
The current economic model is like driving a car and only looking at the speedometer and nothing else, such as where you are going or what's happening around you, Dr van den Belt says.
The economy is based on a neoclassical economic model that in principal calls for continuous growth. This growth is measured by GDP - gross domestic product.
And somewhere along the way, economic activity has become equated with well-being, so the wisdom is, the bigger the GDP, the better off society is supposed to be.
That might be a myth. Research done on people before a big lottery win and then again after, show that within a year, definitely within two years, the winners are back at the level of happiness they were before. People get used to things.THE END
Source: Taranaki Daily News |
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