How Much Is An Ecosystem Worth? In Dollars, More Than the Keystone XL Pipeline


If you've followed the debate over the Keystone XL pipeline, you've perhaps noticed that the pipeline's supporters and detractors tend to be portrayed differently (see, e.g., A Pipeline Divides Along Old Lines: Jobs Versus the Environment). In that article, and many others, the pipeline's advocates are cast as economic rationalists who have marshaled facts and figures in the pipeline's defense: The project will be worth $7 billion, and transport 900,000 gallons of oil per day, and, most importantly, create 20,000 jobs (an estimate since revised to 6,500, few of them lasting more than two years, but never mind). The environmentalists, on the other hand, appear unable to summon competing data.

They are described not as practical, but as "impassioned." They have their fears, but they don't have numbers — they think exploiting Canada's oil sands "will put more carbon in the air," but they don't say how much more, or what, exactly, that carbon will do to us. Greens are "concerned" about the Ogallala Aquifer, but how much damage to an underground river could an oil spill realistically do? Nobody seems to know.

The pragmatic against the emotional, the empirical against the vague, the realists against the tree-huggers — this is the standard narrative in every development-versus-environment struggle. But relying on these stereotypes is ignorant, and incredibly destructive. This article isn't about the Keystone XL pipeline per se — I'm already on record as being against it — but about the way we talk about environmental decision-making. It is time that we started paying closer attention to the immense utilitarian value that nature provides us: The benefits, called ecosystem services, which make our lives possible. And it is no exaggeration to say that these services are worth more money to us — vastly more — than any industry on earth.

The field of ecosystem valuation is still nascent; but that's only because we're so used to receiving the earth's services for free that we've taken them for granted. The better we get at quantifying ecosystem services, however, the more astronomical their discovered value. A decade ago, one team of researchers estimated that the world's ecosystems were worth $33 trillion — nearly twice as much as global GNP at the time of the study — thanks to processes such as soil formation, pollination of crops, provision of food and water, and climate regulation. As valuation techniques improve, that figure will likely shift upward. 

While the vast majority of services have yet to be measured, every attempt at quantifying the economic benefits of biodiversity has revealed immense value. Insects in the U.S. alone are worth at least $60 billion annually and likely much, much more. Coral reefs have been conservatively valued at $170 billion. America's bats are worth anywhere from $3.7 billion to $53 billion each year. Microscopic fungi that help create soil are worth untold hundreds of billions, if not trillions. And so on.

Importantly, the value of individual ecological systems is frequently greater than the value of the extractive industries that threaten them. For example, the deepwater drilling industry was worth $145 billion in 2011, which, to be sure, is an eye-popping figure. But, while nobody knows the true value of the Gulf of Mexico, it is almost certainly in the hundreds of billions; and the damage that the Deepwater Horizon inflicted upon those services will eventually reach into the hundreds of billions, too. A single marine ecosystem, then, arguably does more to benefit humanity than all the deepwater drilling in the world; consequently, we are capable of doing more economic damage through dangerous drilling than the drilling itself is worth. 

Similarly, when we take ecosystem services into account, it's clear that the calculus touted by Keystone's defenders doesn't add up. While the pipeline's $7 billion value might sound like a lot of money, it's pocket change compared to the worth of the ecosystems that would be jeopardized, notably the greater Yellowstone system and the Ogalla Aquifer (not to mention Alberta's fresh water and boreal forests, habitually damaged by tar sands production). These natural systems are themselves worth many tens of billions of dollars and sustain far more jobs than the pipeline ever would. The risk of an oil spill would have to be miniscule to make the pipeline worthwhile, and the risk of a spill is definitely not miniscule. Set aside morality, stewardship of the planet, and all that wishy-washy stuff: the Keystone pipeline makes no sense on an economic basis.  

The reason that Keystone keeps staggering from its grave to haunt the American people is that it promises to make certain firms and individuals very rich, whereas ecosystem services are public wealth. Protecting the public interest is, of course, the government's job, and in the case of Keystone, President Barack Obama has so far discharged that duty, despite the House's chicanery. But when it comes to accounting for ecosystem services in funding decisions, the government is negligent. America's bats, for example, are being decimated by a condition called White Nose Syndrome, a disease that has already killed millions of bats and is threatening some species with extinction. In 2010, Congress gave the Fish and Wildlife Service $1.9 million to study the syndrome — a pathetic, perfunctory gesture at protecting animals that are worth up to $50 billion. Bats need bailouts, too.  

Blaming such pitiful disbursement solely on the government isn't fair, though, and I think it's time that the conservation movement took a hard look in the mirror. In the past, environmentalists have subscribed to the John Muir school of rhetoric, emphasizing nature's intrinsic, intangible, and aesthetic values. And to be sure, some victories — e.g., the National Park system — were won on the strength of that value system. But in a society driven by capital gains and empirical economic data, a conservation strategy built on intrinsic value will be forever at a disadvantage. Rhapsodizing about nature's beauty and majesty when your opponent is pointing at billion-dollar profits is like bringing a knife to the proverbial gunfight. Many of the most important ecosystem services fly under the radar: it's easy to inspire public support for iconic habitat in the Tetons or Yosemite, but a lot harder to get people excited about nocturnal, palm-sized mammals that eat a lot bugs. 

For those reasons, then, we require a more utilitarian conservation movement, one that is armed with spreadsheets and an economic vocabulary. We need to talk less about majestic redwoods and more about carbon-sequestering redwoods; we need to praise the filtration talents of freshwater mussels as ardently as we extol the cuteness of polar bears. And, indeed, plenty of organizations are moving in that direction, devising creative financing mechanisms to pay for conservation: for instance, a new policy tool called Reducing Emissions through Preventing Deforestation and Degradation (REDD) attempts to assign forests value for taking up carbon. Groups such as the Natural Capital Project are exploring ways to measure ecosystem services and account for them in policy decisions, and China is already using the Project's services to achieve its conservation zoning goals.  

I'm confident that as measurement techniques come of age, environmentalists will incorporate valuation into their discourse. Right now, however, an emphasis on nature's economic value has not fully permeated the conservation movement; and the public at large certainly does not comprehend just how valuable ecosystems are. We grasp that nature is worth saving because it is beautiful, but we fail to understand that it is worth saving because it is valuable — that we are not only spiritually impoverished by its destruction but literally bankrupted.

Photo Credit: Sam and Ian