Article

Progress in Physical Geography 1–16 ª The Author(s) 2011 Economic valuation and the Reprints and permission: sagepub.co.uk/journalsPermissions.nav commodification of ecosystem DOI: 10.1177/0309133311421708 services ppg.sagepub.com

Erik Go´mez-Baggethun Universitat Auto`noma de Barcelona, Spain; Universidad Auto´noma de Madrid, Spain Manuel Ruiz Pe´rez Universidad Auto´noma de Madrid, Spain

Abstract In the last decade a growing number of environmental scientists have advocated economic valuation of ecosystem services as a pragmatic short-term strategy to communicate the of biodiversity in a language that reflects dominant political and economic views. This paper revisits the controversy on economic valua- tion of ecosystem services in the light of two aspects that are often neglected in ongoing debates. First, the particular institutional setup in which environmental policy and governance is currently embedded. Second, the broader economic and sociopolitical processes that have governed the expansion of pricing into previ- ously non-marketed areas of the environment. Our analysis suggests that within the institutional setup and broader sociopolitical processes that have become prominent since the late 1980s economic valuation is likely to pave the way for the commodification of ecosystem services with potentially counterproductive effects for biodiversity conservation and equity of access to ecosystem services benefits.

Keywords commodification, ecosystem services, instruments, valuation

I Introduction environmental scientists (e.g. Child, 2009; Costanza, 2006; Fisher et al., 2009; McCauley, The ecosystem services concept was originally 2006; Redford and Adams, 2009; Skroch and conceived as a metaphor to reflect societal Lo´pez-Hoffman, 2010). Contending views in dependence on ecosystems (Norgaard, 2010). this controversy range from the support of valua- However, in the last two decades environmental tion and market solutions as core strategies to science and policy have made increasing efforts solve present environmental problems (which to value ecosystem services in monetary terms, from this perspective are framed as market and to articulate such values through markets in order to create economic incentives for con- servation (Balmford et al., 2002; Barbier et al., 2009; Daily and Ellison, 2002; Freeman, 2003; Corresponding author: Heal et al., 2005; Pascual et al., 2010). Erik Go´mez-Baggethun, Institute of Environmental Science and Technology, Faculty of Sciences, Building C5b impares, The growing reliance on economic valuation Campus de la Universitat Auto`noma de Barcelona, 08193 (hereafter valuation) and related market-based Bellaterra–Cerdanyola del Valle´s, Spain instruments has triggered a heated debate among Email: [email protected] 2 Progress in Physical Geography failures) (Engel et al., 2008; Heal et al., environmental policies emerging in the late 2005), to an outright rejection of utilitarian ratio- 1980s. The final section discusses issues and nales for conservation (Child, 2009; McCauley, problems related to commodification of ecosys- 2006). In between, there is a strategic endorse- tem services, and highlights the impossibility ment of valuation as a pragmatic and transitory of isolating valuation and commodification short-term tool to communicate the value of processes within existing institutional setups. biodiversity using a language that reflects We end with some concluding remarks. dominant political and economic views (Daily et al., 2009; de Groot et al., 2002). This strate- II The ecosystem services gic endorsement of valuation has become an approach increasingly dominant position as the environ- mental movement attempts to look for novel 1 The crises of traditional conservation conservation strategies where traditional ones Four decades after the emergence of the have failed to halt biodiversity and habitat loss modern conservation movement, it is apparent (Armsworth et al., 2007; Daily et al., 2009). that ecological life-support systems are declin- This notwithstanding, we revisit the valua- ing worldwide (Ewing et al., 2010; MA, 2005), tion controversy in the light of existing institu- biodiversity loss remains unabated (Butchard tional structures for environmental governance et al., 2010), and anthropogenic pressures have to develop a critical perspective on the adequacy reached a scale where the risk of abrupt global of the strategy of valuation that is now apparent. environmental disruption can no longer be More specifically, we make the case that envi- excluded (Rockstro¨m et al., 2009). In spite of its ronmental scientists endorsing valuation as a numerous achievements in terms of protection of transitory short-term tool often failed to ana- rare species and habitats, traditional conserva- lysevaluationinconnectiontotwokeyissues. tion approaches have been powerless to reverse First, the broader economic and sociopolitical or stabilize the metabolic patterns of the global processes driving the expansion of the eco- economy, characterized by ever-increasing nomic value domain in market economies demands on natural stocks, ecosystem (Gorz, 1994; Polanyi, 1944/1957). Second, the services, and biodiversity (Guo et al., 2010; institutional setting within which environ- Krausmann et al., 2009). Although the state mental policy operates since the emergence of the environment would undoubtedly be of market conservationism in the late 1980s worse if conservation strategies had not been and the related expansion of market-based in place, traditional conservation has so far instruments for conservation (Peterson et al., failed to reverse biodiversity and habitat loss 2010; Robertson, 2004; Smith, 1995). We (Armsworth et al., 2007). Arguably, this failure argue that such advocacy has overlooked the cannot be understood without connecting it to unintended and potentially counterproductive the long-established reluctance of much of the consequences of the valuation process. environmental movement to mix economics and The paper is structured as follows. The next conservation (e.g. Child, 2009). The conserva- section examines the crisis of traditional con- tion movement has thereby failed to act upon the servation and the emergence of the ecosystem economic and sociopolitical drivers of change approach. Section III analyses the incor- that are at the root of many present environmen- poration of ecosystem services into policy and tal problems (MA, 2005; Steffen et al., 2004). markets. The fourth section scrutinizes the phe- The segregation of economics and conser- nomenon of ecosystem services commodifica- vation into separate policy spheres can be seen, tion in the context of market conservationist for example, in current approaches to territorial Go´mez-Baggethun and Pe´rez 3 planning. Natural areas protected through impossibility of perpetual economic growth. ‘fortress conservation policies’ are embedded in Economic analyses were rarely relied on, except a matrix that is ecologically unsustainable in so for illustration purposes (Norgaard, 2010). far as it is devoted to economic development and growth. This approach reflects the dominant onto- 3 Ecosystem services in the international logical position in western cultures that conceives policy agenda humans as being separated from the environment, and nature conservation as a concession from eco- The expansion of the ecosystem service nomic development. In this context the ecosystem approach beyond specialized academic circles services approach is proposed as a strategy for took place in the 1990s. A critical benchmark moving away from the logic of ‘conservation ver- was the move from theory to policy through the sus development’ towards a logic of ‘conserva- partial endorsement of the ecosystem services tion for development’ (Folke, 2006). From the approach by the Convention on Biological ecosystem services approach the conservation of Diversity in 1992. In the following decade the ecological systems stands out as a necessary pre- first comprehensive frameworks for the analysis requisite for long-term economic . of ecosystem services were published; first with the seminal work of Daily (1997) and later with the development of frameworks and methods for 2 Emergence of the ecosystem service the identification and classification of ecosystem approach services (e.g. de Groot et al., 2002). The ecosystem services approach portrays eco- Following the publication of the Millennium systems as natural capital stocks that provide Ecosystem Assessment in 2005 (MA, 2005), eco- diverse and services for human societies system services have become firmly settled into (Costanza and Daly, 1992; Daily, 1997; de Groot the international environmental policy agenda. et al., 2002; MA, 2005; TEEB, 2010). Despite This agenda includes international efforts to the long-term awareness of the importance of develop integrated systems of ecosystem and eco- ecological functions for livelihoods (see, for nomic accounts (United Nations et al., 2003; example, Polanyi, 1944/1957), the origins of the Weber, 2007) and standardized classifications of modern ecosystem service approach are to be ecosystem services (Costanza, 2008; Haines- found in the late 1960s and the 1970s (Ehrlich Young and Potschin, 2010). Such initiatives have and Ehrlich, 1981; Helliwell, 1969; King, developed in parallel with the use of cost-benefit 1966; Odum and Odum, 1972). analysis to address large-scale environmental Besides conventional such as problems like global climate change (Stern, timber, fibre and raw materials, this notion of 2006) and biodiversity loss (TEEB, 2010), and an ecosystem service also incorporated nature’s by the promotion of markets for environmental non-market benefits such as clean air, climate commodities (Bayon, 2004) and payments for regulation, flood buffering, and other non- ecosystem services schemes (Engel et al., 2008). material benefits like recreation, cultural heri- Each has been supported by different organiza- tage and cognitive development (Daily, 1997). tions with different – but related – aims (Table 1). These had tended to be overlooked in economic accounting and decision-making. At this time, however, the ecosystem service concept was III Ecosystem services in public mainly used as an eye-opening metaphor to policy and markets overcome the ecological blindness of conven- The expansion of pricing mechanisms to ecosys- tional economic accounts, and to alert on the tem services has followed two main approaches. 4

Table 1. International initiatives incorporating the ecosystem services approach Project Main institutions Aim Webpage Millennium Ecosystem United Nations Environment Assessing ecosystem changes http://www.millenniumassessment.org/ Assessment (MA) Program (UNEP), Convention and the consequences for on Biological Diversity (CBD), human well-being, at scales and many other international from global to local organizations The Economics of Ecosystems United Nations Environment To draw attention to the http://www.teebweb.org/ and Biodiversity (TEEB) Program (UNEP), German global economic benefits Federal Ministry of the of biodiversity and to Environment, Department for highlight the growing costs the Environment, Food and of biodiversity loss Rural Affairs (DEFRA), European Commission (EC) Intergovernmental Science- United Nations Environmental Act as an interface between http://www.ipbes.net/ Policy Platform on Biodi- Program (UNEP), Food and the scientific community versity and Ecosystem Agriculture Organization and policy makers that aims Services (IPBES) (FAO), International Union for to build capacity for and Conservation of Nature strengthen the use of (IUCN), International Institute science in policy-making for Sustainable Development (IISD) System of Integrated Envi- United Nations (UN), European Create a common framework http://unstats.un.org/unsd/envaccounting/seea.asp ronmental and Economic Commission (EC), Interna- to measure the contribu- Accounting (SEEA) tional Monetary Fund (IMF), tion of ecosystems to the Organization for Economic economy and the impact of Cooperation and Develop- the economy on ment (OECD), World Bank ecosystems (WB) (continued) Table 1 (continued) Project Main institutions Aim Webpage Beyond GDP European Commission (EC), To develop and improve http://www.beyond-gdp.eu/ European Parliament, The widely applicable indicators Club of Rome, World Wide to assess social, economic, Fund for Nature (WWF), and environmental Organization for Economic progress Co-operation and Development (OECD) Ecosystem Services Partner- Environmental Systems Analysis To build a network to http://www.fsd.nl/esp ship (ESP) Group (Wageningen enhance and encourage a University), the Institute for diversity of approaches in the application of ecosys- (Portland State University), tem services to promoting the Netherlands better science, policy, and Environmental Assessment practice Agency and up to 40 other core and full members The Ecosystem Services World Resources Institute Serves as a resource for http://projects.wri.org/ecosystems/experts Expert Directory (WRI), World Business policy-makers and Council for Sustainable professionals looking for Development (WBCSD), information or guidance on Ecological Society of America a particular ecosystem (ESA), International Union for trend or management Conservation of Nature practice (IUCN), Earth Watch Institute (EWI) 5 6 Progress in Physical Geography

The first consists of a ‘Pigovian solution’ where dioxides (Stavins, 1998). Another example is public intervention plays the leading role in the the wetland banking systems put into practice correction of ‘market failures’ through state through the US Clean Water Act. This system taxes and subsidies. The second approach, pro- grants permits to deteriorate wetlands in ex- minent since the 1980 and 1990s, follows a change for commitments to create, restore or ‘Coasean solution’ whereby correction of mar- protect them elsewhere (Robertson, 2000). New ket failures is addressed through private transac- markets followed these experiences such as the tions, often in markets where ecosystem services emission trading system of the United Kingdom, can be freely sold and bought. This is so, at least the Chicago Climate Exchange established in in theory, because in practice most markets for the USA in 2003, and the Greenhouse Gas ecosystem services have been set up, subsidized Abatement Scheme of New South Wales estab- and actively regulated by governments. These lished the same year in Australia (Bayon, approaches for correcting market failures have 2004; Spash, 2010). The first international emis- been implemented via two main mechanisms: sion trading scheme (ETS) was set up in Europe ‘markets for ecosystem services’ and ‘payments in 1997. When the Kyoto protocol came into for ecosystem services’. Thus the ‘polluter pays force in 2005, the ETS expanded to other coun- principle’ which underlies the former is comple- tries creating a market of US$142 billion in 2010 mented by the ‘steward earns principle’ which (World Bank, 2011). underlies the latter. 2 Payments for ecosystem services: the 1 Markets for ecosystem services and the ‘steward earns principle’ ‘polluter pays principle’ If negative environmental are The ‘polluter pays principle’ is grounded on addressed through the polluter pays principle, an alleged ethic of responsibility, according to positive externalities are dealt with through the which the economic agents causing environmen- ‘steward earns principle’, as an underlying logic tal harm should carry the economic costs of the for making payments for ecosystem services. negative externalities they create. Since the Payments for Ecosystem Services (PES) have 1980s the polluter pays principle has been incor- been defined as conditioned and voluntary trans- porated in legal texts. In Europe it was included actions between at least one provider and one in the Single European Act of 1986 (article 174), beneficiary, of well-defined ecosystem services in the Maastricht Treaty (article 130.2), and in (Wunder, 2005). The underlying rationale is that the Treaty establishing a Constitution for Europe beneficiaries of ecosystem services should com- (article III, 233.2), which has stagnated since pensate the stewards that maintain or protect the 2004.Atinternationallevel,thepolluterpays services from which they benefit. principle was adopted by the Organization Rudimentary forms of PES have been in for Economic Cooperation and Development place for many decades. For instance, in the (OECD) in 1972, and was contemplated in 1930s the US Government promoted payment the Declaration of the Rio Summit on Sus- for farmers that adopted measures against soil tainable Development of 1992 (article 16). erosion, and in the 1950s similar mechanisms Since the 1990s the leading instrument used were established to protect farmlands from to operationalize the polluter pays principle are urban expansion (Jacobs, 2008). Other early the so-called Markets for Ecosystem Services examples of PES are payments to promote (MES). For example, the 1990 US Clean Air Act agri-environmental measures in Europe (Dobbs promoted cap and mechanisms for sulphur and Pretty, 2008). The widespread expansion Go´mez-Baggethun and Pe´rez 7 of PES as integrated development and conser- 2008). According to some authors, the advocacy vation scheme, however, dates fundamentally of valuing ecosystem services in monetary terms from the last two decades (Wunder et al., is embedded in the logic of market environment- 2008). Costa Rica was the first country to set alism, prominent since the late 1980s alongside up PES schemes at the national scale, through the expansion of the neoliberal (Bakker, a programme established in the mid-1990s that 2005; Smith, 1995). Market offered US$45 per hectare to landlords endor- can be seen as an approach to environmental gov- sing the conditions of the scheme (Pagiola, ernance aimed at conciliating economic growth, 2008). More recently, schemes for international allocation efficiency and environmental conser- PES have been promoted. These include the vation (Anderson and Leal, 2001; McCarthy, Clean Development Mechanisms launched in the 2004). Basic ingredients of the market environ- 6th Conference of the Parties (COP) of the mentalism toolset include the establishment of Kyoto protocol, the Joint Action Mechanisms well-defined (usually private) property rights for (Capoor and Ambrosi, 2009), and the so-called ecosystem services with character, Reducing Emissions from Deforestation and valuation of environmental externalities, and the Forest Degradation (REDD) and REDDþ pro- use of market-based instruments for conservation grams of COPs 13 and 16, respectively. (Bakker, 2005). The logic of valuation, property allocation, and market-based instruments in con- servation is grounded in the institutional analysis IV Market conservationism and the of Coase (1960) and Hardin (1968), which has commodification of ecosystem fitted with the policies promoted services since the early 1980s under the influence of the Chicago School (Stiglitz, 2002). 1 and market Although processes involving the commo- environmentalism dification of nature have been documented at The broader political-economic context in least since the late 19th century (Polanyi, 1944/ which international policy has been embedded 1957), since the 1980s the frontier has since the 1980s is often referred to as ‘neoliberal- expanded towards entirely new types of ecosys- ism’ (Harvey, 2005). Neoliberalism has been tem services (Robertson, 2006). These include defined as the theory of political-economic prac- regulating services such as carbon sequestration tices that proposes that human well-being can best and watershed regulation that have traditionally be advanced by liberating individual entrepre- operated outside the market sphere. neurial skills with an institutional framework characterized by strong property rights, free mar- kets and free trade. Neoliberalization includes 2 Commodification of ecosystem services political-economic practices such as privatization, The concept of commodification refers to the reduction of state intervention in the economy, expansion of market trade to previously non- and expansion of market valuation to spheres that marketed areas. It involves the conceptual and were formerly unaffected by commerce (Bakker, operational treatment of goods and services as 2005; Harvey, 2005; Robertson, 2006). objects meant for trading. It describes a modifi- These political-economic practices have cation of relationships, formerly unaffected by also unfolded in the fields of environmental sci- commerce, into commercial relationships. Com- ence, policy and conservation (Castree, 2003; modification of ecosystem services thus refers to Foster et al., 2009; Liverman, 2004; McAfee, the inclusion of new ecosystem functions into 1999; O’Connor, 1994; Robertson, 2004; Spash, pricing systems and market relations. 8 Progress in Physical Geography

Commodification of ecosystem services takes centuries (Ingold, 1986) the direct theoretical place though four main stages: economic fram- roots of the recent cycle of the privatization of ing, monetization, appropriation, and commer- nature lie in the influential contributions of cialization, although these stages sometimes Coase (1960) and Hardin (1968). The defence overlap in time and are not always necessarily of the former for well-defined property rights concomitant. The first stage consists of the dis- was complemented with the advocacy by the lat- cursive economic framing of ecosystem func- ter for privatization (or alternatively appropria- tions as ecosystem services, which started with tion by the state) of common pool resources as the anthropocentric interpretation of ecosystem the way to avoid overexploitation. functions and continued with the application of The last stage in the commodification process the ecosystem service concept from the 1960s. consists of the commercialization of ecosystem The second stage takes place when the use services – i.e. the creation of institutional struc- values embedded in ecosystem services are tures for ecosystem services sale and exchange. expressed as exchange values through monetiza- As with any other monetary market, MES and tion or pricing. The conceptual roots of this pro- PES involve the definition of one or more ser- cess in economic theory have been traced back vices, which then become commodities subject to the early 19th century (Go´mez-Baggethun to trade. The extension of MES and PES towards et al., 2010), but relate more directly to the new ecosystem functions therefore involves, by origins of the concept coined in definition, a process of nature commodification the 1920s (Pigou, 1920/1932) and even before – i.e. an expansion of the commodity frontier (e.g. Dupuit, 1844, quoted in Maneschi, 1996). into previously non-marketed spheres of the Although economists have tried to attach mon- environment (Kosoy and Corbera, 2010). etary values to ecosystems since the late 1950s Contrary to what is often assumed, the (e.g. Clawson, 1959; Krutilla, 1967), environ- process of commodification is not necessarily mental scientists did not pay much attention unidirectional or irreversible. As noted by to this work until the 1990s, when they system- Bakker (2005: 545), ‘objects move in and out atized valuation frameworks (Bateman and of, and back and forth from, commodity status’. Turner, 1993; Freeman, 2003; Heal et al., Limits in the scope of the market sphere at a 2005; Pearce, 1993; Pearce and Turner, given point in time are determined by the set 1990;Turneretal.,2004).Finally,afterthe of norms, conventions and formal rules shared publication of the much-discussed paper by by a particular society or group of people, e.g. Costanza et al. (1997) that estimated the total by the existing institutional structures. By mak- worth of the Earth’s natural capital, valuation ing use of institutions, societies decide not only became the most frequent target of ecosystem what to commodify but also what to decommo- services research. dify (Harvey, 2005). Historically, decommodifi- The third stage consists of the appropriation cation processes have occurred as specific forms of ecosystem services, and operates through the of commodification failed or were socially formalization of property rights on specific eco- contested (Polanyi, 1944/1957; Sayer, 2003). system services, or on the lands producing such Prominent examples include the abolition of services. This stage has often involved privati- and the removal of the late Middle zation, through which ecosystems that were pre- Age practice of selling letters of indulgence viously in openly accessible regimes, or in (Fromm, 1942/1987: 61). Commodification can communal or public property regimes, have thus be looked upon as contested and transient been turned into private property. Although the (Bakker, 2005). Within modern market econo- origins of this process can be traced back several mies, however, the dominant direction has been Go´mez-Baggethun and Pe´rez 9 towards commodification (Polanyi, 1944/1957), developed in recent critiques of the commodifi- a tendency that has intensified since the 1980s cation of ecosystem services. Peterson et al. (Harvey, 2005). (2010), for example, noted that just as commodi- fication obscures the labour of human workers in V Discussion the production process so it obscures the impor- tance of biodiversity and related abiotic factors 1 Why is commodification an issue? that contribute to ecosystem functions. In a sim- There are several lines of criticism of the com- ilar line of critique, Kosoy and Corbera (2010) modification of ecosystem services. The most argued that the commodification of ecosystem intuitive and general critique posits that for ethi- services masks ecological complexity, non- cal reasons some things ought not to be for sale economic values of ecosystems, and power (McCauley, 2006). These controversies around asymmetries underlying environmental trade. commodification concern where to draw the line A third line of critique concerns problems demarcating the commodity frontier – i.e. what involved in the treatment of things that are should be within the sphere of markets and trade not produced by humans as commodities. An and what should not. In fact, material elements early reflection on this is found in the writings of nature have been sold as commodities since of , who used the concept of ‘com- the birth of markets and few contributions cri- modity fiction’ to refer to the way in which land ticize commodification in its totality. The main (together with labour and money) was incor- issue is where to set the limits of commodifica- porated to markets as a tradable commodity tion in the realm of ecosystems and wildlife (Polanyi, 1944/1957: 121–128). The commodity (Prudham, 2007). For instance, some protest fiction presents serious technical difficulties at responses in contingent valuation surveys the operational level. The first of them is the (e.g. refusal to bid) have been interpreted as interrelated nature of ecosystem functions and opposition to monetize ecological values and services. Recent research on ecosystem services to frame ecosystem services as commodities has stressed the need to establish discrete and (O’Neill and Spash, 2000). well-defined ecosystem service units that can A second line of criticism concerns the be incorporated within economic accounting alleged effect of commodification as complexity systems (Boyd and Banzhaf, 2007). The attempt blinder and mystification. This is manifested to compartmentalize ecosystem services as by the masking of critical processes underlying discrete units, however, neglects the fact the production of ecosystem services behind that ecosystem functions are inextricably linked the homogeneity of monetary figures, thereby to each other (Vatn, 2000). In words of transforming a symbolic value into an objective Georgescu-Roegen (1971), this corresponds to and quantifiable relationship. This criticism is an attempt to frame as an artimomorphic con- rooted in the classic analysis of commodification cept (i.e. a concept with discrete and well- by , who noted how in the modern defined limits) what in reality is a dialectical (capitalist) complex social concept (i.e. a concept with overlapping, interac- relations between people took on the appearance tive and diffuse borders). It therefore reflects an of simple exchange relations between objects, a attempt to fit the complex nature of ecosystem phenomenon he referred to as ‘commodity functions into a mechanistic analytical frame- fetishism’ (Marx, 1867/1965: 38–50). The perti- work used to handle the relatively simple nature nence of the analysis in the of human-made commodities. The difficulty field of ecosystem valuation was hinted at by of separating entangled ecosystem functions Martı´nez-Alier (1987), and then taken up and into discrete exchangeable units explains the 10 Progress in Physical Geography uncooperative nature of many ecosystem scientific basis. In fact, the normative character functions to become commodified, as theorized that pervades much of the ongoing discussion by Vatn and Bromley (1994). This is also sup- on commodification is an obstacle to addressing ported by empirical case studies that document the empirical question of its effects on ecosys- the obstacles confronted by attempts to fulfil tem service quality and quantity. More empirical the supply in the research is needed to provide a scientifically United Kingdom (Bakker, 2005) and to develop sound assessment of the effects of commodifica- wetland banking systems in the United States tion in environmental standards. (Robertson, 2006). A fourth line of criticism is political in nature, and addresses equity issues involved in 2 Disentangling valuation and the commodification process. Commodification commodification processes turns ecosystem services that in principle were A key question that the present paper aims to in open access, public or communal property address is whether monetization of ecosystem into commodities that can be accessed only by services can be detached from commodification those having purchasing power. This involves processes, as suggested explicitly by some nota- a substantial institutional and social change that ble proponents of valuation. we can evaluate positively or negatively depend- Advocates for the strategic use of valuation ing on our normative ideology. For example, have emphasized the need to discern economic from the perspective, commo- framing of the environment, monetization and dification is assumed, rather than empirically commodification as distinct processes. For exam- proven, to be socially undesirable, because by ple, Skroch and Lo´pez-Hoffman (2010) caution institutionalizing differential access to ecosys- against conflating the ‘necessary critique of tem services according to the ability to pay, PES programs’ and the ‘broader generalized commodification is likely to exacerbate social critique of current trends to value ecological func- inequalities. Corbera et al. (2007) documented tions in relation to their contribution to human cases in Central America where increased well-being’ (p. 325). Similarly, in response to inequities in the access to ecosystem services and McCauley’s (2006) critique to the ecosystem ser- related economic benefits followed the imple- vice approach, Costanza (2006: 749) defends the mentation of markets for ecosystem services and economic valuation of ‘ecosystems without their commodification. Similarly, the literature commodifying them’. Indeed, criticism of the on political ecology has devoted much attention ecosystem service approach sometimes suffers to the social and political struggles taking place from analytical imprecision resulting in the mer- at the border of the commodity frontier, as mar- ging of distinct concepts such as valuation, priva- kets extend into new ecosystems and societies tization and commercialization under the broader where they are not the prevalent institutions rubric of commodification. As we have seen for allocation (Martı´nez-Alier, 2002). Finally, above, these concepts represent interrelated but Harvey sees in commodification a form of ‘accu- well-differentiated aspects that are linked to dif- mulation by dispossession’ that is likely to foster ferent stages of the commodification process. social inequity and contribute to civil unrest Disentangling this confusion involves two tasks. (Harvey, 2003). The first consists of clarifying these concepts at The criticism of commodification reviewed the theoretical level. The second involves analys- in this paper does not address the question of ing how these processes co-evolve, interact and whether commodification is likely to be envir- reinforce each other when examined in a specific onmentally useful or harmful from a sound institutional setting or sociopolitical context. Go´mez-Baggethun and Pe´rez 11

The key difference between economic take place (Go´mez-Baggethun et al., 2010). The framing of the environment and valuation demarcation between economic framing of the resides in the distinction between goods/services environment, monetary valuation and commodi- and commodities, and between and fication as distinct processes is thus consistent . Goods and services refer to any from a theoretical point of view. As we shall see, object or act with the capacity to fulfil human however, the distinction between these processes needs or wants. By definition, goods and ser- partly fades when analysed within the broader vices, and by extension all ecosystem services, political, institutional and economic context in are useful for humans and therefore have use which ecosystem policy and science operate, value. However, only the subset of ecosystem with a special intensity since the late 1980s. goods and services produced for sale or for exchange in markets are commodities. Besides having a use value, commodities also have 3 Institutional setup and valuation outcomes exchange value, which in our economy gener- The institutional setup in which environmental ally is expressed in the form of money. The first science and policy operate provides the basic relevant implication to be extracted from this matrix that shapes the application of valuation analysis is that framing the environment eco- outcomes. Because in market economies the nomically, i.e. conceptualizing ecosystem func- institutional and economic framework often tions as services, does not involve in principle favours that environmental decisions are made any form of monetary valuation. with cost-benefit analysis (Salzman and Thomp- Second, valuation and commodification son, 2007) environmental science and policy are not equivalent concepts. Modern political have evolved within terminologies and logics economy defines commodities as ‘products that that are relevant to this dominant framework are produced to be sold on markets’ (Polanyi, (Peterson et al., 2010). Thus, whereas in theory 1944/1957: 127) or simply as ‘any object it is possible to advocate the monetary valuation intended for exchange’ (Appadurai, 1986: 9). of ecosystems without commodifying them, in This definition is consistent with the one offered practice we see more realism in the statement by classical economists. For example, Marx that ‘valuation is only one stage of a two-stage defines commodities as ‘any product with the process’, the second of which would be to capacity to satisfy human needs of any kind’ ‘devise ways in which those valuations can be (Marx, 1867/1965: 3), but adds later that to realized as cash flows’ (Pearce, 2002: 4) – i.e. become a commodity ‘such a product has to pass by developing ways of transforming ecosystem from one hand to another, through an act of services into real commodities. In fact, in the exchange’ (Marx, 1867/1965: 9). Thus, the sec- decade that followed the mainstreaming of eco- ond relevant implication that follows from these system service valuation in the 1990s, we have definitions is that assigning an economic value witnessed the exponential establishment of mar- to an object or act does not automatically involve ket instruments for conservation, such as PES commodification. Valuation is a necessary but schemes (Go´mez-Baggethun et al., 2010; Spash, not sufficient condition for commodification, 2010). In many cases the successful functioning as valuable goods and services have to be alien- of such instruments has involved the commodi- able in order to become commodities. In other fication of regulating ecosystem services, such words, a complementary institutional structure as carbon sequestration and watershed regula- that allows appropriating ecosystem services tion (Corbera et al., 2007; Pagiola, 2008). (property rights) and their sale or exchange (a Since valuation outcomes are inevitably market) has to exist before commodification can attached to the ideological and institutional 12 Progress in Physical Geography structures in which environmental policy frameworks and tools (see, for example, Myrdal, operates, valuation practitioners cannot expect 1970, 1978; So¨derbaum, 1999; Weber, 1919, monetary figures to be neutral in relation to the 1978). Although exploration of this question is process of nature commodification. In the con- beyond the scope of this paper, we believe text of ongoing privatization, monetization of that economic framing of the environment and ecosystem services will act directly or indirectly monetary valuation methods cannot be consid- as a precondition and driver of commodification. ered neutral tools. Concepts like natural capital and ecosystem services set human-nature rela- tions into one of and exchange, thereby VI Conclusions expanding the economic rationality of the profit Traditional conservation strategies have been calculus into the sphere of ecosystems and biodi- shown to be insufficient to reverse biodiversity versity. Similarly, valuation methods frame and habitat loss and we support the environmen- choices within a narrative of , efficiency tal movement’s attempt to improve the effec- and profit maximization (Vatn, 2005; Vatn tiveness of conservation efforts through novel and Bromley, 1994), often serving as metrical means. We believe that the idea of ecosystem technology for the commodification of ecosys- services is a powerful concept that can advance tem services (Robertson, 2006). Through the the ontological position that ecosystems are not effort it has put into monetary valuation of only a matter of ethics and aesthetics, but also market-based instruments, the ecosystem ser- a basic condition for human life and subsistence vice approach has served, often against the will (Go´mez-Baggethun and de Groot, 2010). Our of its promoters, the market conservationism criticism is not directed at the ecosystem service agenda of ecosystem services commodification. concept itself, but at the belief that economic This is the tragedy of well-intentioned valuation. valuation will solve the problems and short- comings of traditional conservation. More spe- Acknowledgements cifically, we claim that within the ideological, The authors are grateful to Giorgos Kallis, Victoria institutional and economic context in which Reyes-Garcı´a, and two anonymous referees for their ecosystem services science operates it is not rea- criticism and inspiring comments on previous drafts listic to assume that monetary valuation can be of this paper, and to Roy Haines-Young and Marion used without acting as a driver of commodifica- Potschin for their valuable suggestions during the tion. Appraisal of valuation cannot be detached editing stage. from the analysis of the sociopolitical processes through which the market expands its limits and Funding through which economic value colonizes new This research received no specific grant from any domains. Monetary valuation of ecosystem ser- funding agency in the public, commercial, or not- vices does not equate to commodification of for-profit sectors. ecosystem services, but it paves the way (discur- sively and sometimes technically) for commodi- References fication to happen. Anderson T and Leal D (2001) Free Market Environment- A question that remains open is whether the alism. New York: Palgrave. process and outcome of economic valuation can Appadurai A (1986) The Social Life of Things: Commodi- be blamed for failure if institutional setups are ties in a Cultural Perspective. Cambridge: Cambridge inadequate or lopsided. 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