We’ve asked and attempted to answer this question may times: What’s the cost of a tree? This question inherently implies that there is a price tag on that tree, and that price is a reflection of what one party is willing to pay for the benefits of the tree, and what another party is willing to receive in exchange for giving up those benefits.
In the attempt to reconcile ecological “value” in the marketplace, economic imperialism only recognizes this “value” in economic terms. It seeks an exchange rate between nature and the dollar. Like foreign currency exchange rates, this can never be a defined constant. Speculative forces cause markets to fluctuate, increasing or decreasing “values” accordingly.
Unfortunately, the same speculation that causes market fluctuations would also be required to estimate the future economic values of degraded ecosystems as they relate to global economic forces. Speculating degraded ecosystem value in economic terms is incredibly difficult, if not outright impossible considering the vast unknowns of the climate crisis. As Daly and Farley point out (p.52),
“while a meteorologist cannot accurately predict the weather in a week, she can at least stick her head out the window and say ‘it’s raining.’ Economists, on the other hand, at the time of this writing are in the midst of a heated debate over whether or not the economy is in a recession right now.”
(this book was published in 2004)
Economists may predict future values and apply discount rates, but they never know anything for certain until they look backwards on a quarterly or annual basis. Economic imperialism suggests that the market has the ability to not only project a measurable financial value on ecosystems, but it would also properly compensate those who suffer losses from their depletion.
Thus we are left with a massive flaw in economic imperialism: it can not be known who suffers and how much (financially) they suffer until it has already happened. The inherent flaw in this theory makes it impossible to mitigate damage and protect the environment solely through the market because the true economic impact of degradation is unpredictable and speculatively immeasurable.
Josh Gelfand is a full time student slated to graduate in May of 2010. Prior to joining the Presidio community he was the General Manager of Flexcar in San Diego