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Economic Valuation and the Commodification of Ecosystem 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 value 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, market 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 capital 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 service 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 sustainability. 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 goods 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 commodities such
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