The Economic Value of Ecosystem Services from and for Wilderness

Benefits of Wilderness Areas

BY TRISTA PATTERSON

Introduction sibility that the value of the commons is In the Sierra Club classic On the Loose (1967), Terry and Renny Russell reject attempts greater than the sum total of all the to place economic values on wilderness, emphasizing that the true rewards of the things we own as individuals. In addi- wilderness experience are spiritual: the freedom of self-reliance and the uplifting tion to neoclassical economic tools, beauty of wild nature. At the same time, citing Winston Churchill, they issue a key social science deliberative and consen- challenge: to learn the game one has to play for more than one can afford to lose. sus methods, multicriteria and conjoint Some wilderness scholars are taking up this challenge by reexamining and reem- analysis, and ecological pricing (e.g., ploying economic tools they had long since dismissed. emergy and exergy) can elucidate and Economic valuations of wilderness have concentrated on direct benefits (e.g., convey values from multiple perspec- commodity goods, recreation) and nonuse benefits (e.g., existence, bequest) (Haynes tives (Patterson 2005). These are and Horne 1997; Schuster et al. 2006; Cordell et al. 1998; Loomis 2000; Loomis and necessary to relating willingness-to-pay Walsh 1992; Loomis and Richardson 2001; Richardson 2002; Walsh et al. 1984; Walsh to the market, the market to the econ- and Loomis 1989). Increasing public importance has been noted for indirect values omy, and the economy to wilderness. from wilderness, such as ecosystem services (see figure 1) (Morton 1999, 2000; Cordell et al. 2003). Ecosystem services are the naturally occurring contributions to Distinguishing Growth from life support and quality of life that people normally do not have to pay for (Daily Development 1997; Costanza et al. 1997; de Groot et al. 2002). Actual typologies vary, however (see The term economic growth is often used Boyd and Banzhaf 2005; Costanza et al. 1997; de Groot et al. 2002; Alcamo et al. 2003; interchangeably with economic develop- Heal et al. 2005; Brown et al. 2006). They can be experienced directly (provisioning ment (Daly 1977), but with different food, freshwater, and cultural and recreational opportunities), or indirectly (regulating implications for wilderness (Czech 2000). floods or climate or supporting the other services through soil formation or nutrients) Growth (a quantitative attribute) involves (Millennium Ecosystem Association 2005; Chapin this issue). increasing economic activity, commonly Creative experiments are bringing values of ecosystem services into the market- a result of increasing population and/or place, including carbon markets, wetland and habitat banking, water temperature per capita energy/material consumption. credits, certifications, and tax incentives (Wunder 2005). Market values have helped raise Technology often does not fully mitigate awareness for ecosystem service contributions to quality of life, and help harness funds the impacts of growth, and sometimes we for their protection. Achieving these outcomes for wilderness involves particular chal- allow the negative impacts to be borne lenges. This article discusses four of these challenges. out in future generations. The increasing land areas and use intensity needed to Broadening the Methods support economic growth can ultimately One challenge is that reducing a multifaceted issue such as wilderness to the market compete with, or adversely impact is by nature a subjective and exclusionary process (Funtowicz and Ravetz 1994; wilderness. This occurs not only at geo- Funtowicz et al. 1999), one that will reflect only a subset of the many values associ- graphic boundaries (White et al. 2000), ated with wilderness around the world. When Costanza et al. (1997) estimated the but also with systemic changes in cli- value of the world’s ecosystem services as US$33 trillion, 1.8 times the world’s GDP, mate, species dynamics, and soil and some logically wondered how people’s willingness to pay could exceed what they had water transport. In contrast, develop- (Bockstael et al. 2000). The overreliance on certain methodologies can obscure the pos- ment (a qualitative attribute) can be

24 | The Wild Planet Project | May 2007 achieved by economic rearrangement, in theory improving the ability of wilderness and the human-made economy to coincide. This must be the center of our focus if economic tools are to be harnessed effectively from and for wilderness. Accounting ecosystem services from wilderness can help to distinguish these qualitative improve- ments.

Developing Creative Markets, Flexible Institutions The characteristics of various goods and services affect the ease with which market-based tools can elicit their value. Marketed goods are most often excludable (a legal concept that allows an owner to prevent another person from using the Figure 1—Morton’s (2000) total economic valuation framework for estimating wilderness benefits asset), and rival (where consumption or based on seven categories, arranged from left to right in order use reduces the amount available for of decreasing tangibility to humans other people), whereas most ecosystem services are nonexcludable, and nonrival that are rarely congruent with market nomic value through broad-scale ecosys- (see Daly and Farley 2004 for applica- and property boundaries. Time lags and tem services, buffering severity and tions). To some extent, social agreements feedback loops can also muddle the directionality of environmental change, can engineer excludability or rivalness, or cause-effect relations needed to reflect and helping us understand the way create a proxy (consider carbon “credits”) marginal gains. Wilderness affects nature works. One barrier to stemming to make ecosystem services marketable. ecosystem services and vice versa: forest the losses of ecosystem services and Wilderness (often on public land) requires loss in Amazonia reduces rainfall in Texas wilderness alike is an inability to additional creativity because most mar- (Avissar and Werth 2005), and carbon account for their nonmonetary contribu- ket-based mechanisms are salient to emissions from cities affect Arctic tions to quality of life, or the damage private lands. That said, offsets elsewhere wilderness (Bachelet et al. 2005). costs to be incurred when they are lost. can benefit the wildland network as a Conditions that satisfy market effi- Broadening assessment of value to whole, and ecosystem services that are ciency don’t include environmental include the indirect (public) goods and not marketable (e.g., biodiversity) can be sustainability or socially just distribu- services can prevent assets of “the com- bundled to one that is (e.g., water tem- tion (Daly and Farley 2004). For the mons” from taking a backseat to private perature credits). world’s poorest, ecosystem services pro- profit, sensu Hardin (1968). This article Regulations (laws and standards), vide “natural insurance” for people has mentioned four challenges particular market incentives, information (e.g., cer- living in or near wilderness as has been to wilderness: ensuring that the market tification), and institutional flexibility all documented in Peru, the Amazon and willingness-to-pay is not the only way influence the longer standing success of (Takasaki et al. 2004), Knuckles we elucidate economic value, distinguish- attempts to bring wilderness attributes Wilderness in Sri Lanka (Gunatilake et ing economic growth (a quantitative goal) to market. Simply because the market is al. 1993), and others (Pattanayak and from economic development (a qualitative trading carbon credits in quantity does Sills 2001). Despite this, wilderness con- goal), employing creativity and skill with not mean abatement is occurring. servation has at times been cast as economic instruments and flexibility with Market price for carbon was more than elitist, because demographic disparities social institutions, and looking beyond halved in April 2006 when European exist in those who access it (Johnson et market efficiency to social and environ- countries set first-round emission tar- al. 2004). Exclusive focus on direct mental justice issues. gets too high. (rather than indirect or nonuse) benefits The economic approach is not for can obscure important distributive jus- everyone. If the Russell brothers had been Cultivating Socially and tice benefits of wilderness. asked to put a dollar value on wilderness, Environmentally Just Markets they probably would have responded Links between wilderness and ecosystem Conclusion with a public mooning. Yet the market is services often involve broad spatial scales Wilderness contributes to indirect eco- already valuing wilderness by way of a

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