The term is used in the field of biodiversity to refer to the economic value of all biodiversity services and assets in a particular geographic area, e.g. a country or section of a country.  While proponents of protecting biodiversity have articulated the contributions made by various species and ecosystems, e.g., the rainforests and medicine, calculating the actual value of the species and/or ecosystem, in Euros/dollars/pounds, to the wider economy provides an added argument for the protection.  Such an argument is especially critical during tough economic times, as at the present, when funding to protect biodiversity has to compete with funding for basic services, for instance health and unemployment benefits.

As the leader of a recent study (TEEB, see below) on valuing biodiversity has said:  “Modern society’s predominant focus on market-delivered components of well-being, and our almost total dependence on market prices to indicate value, means that we generally do not measure or manage economic values exchanged other than through markets. This is especially true of the public goods and services that comprise a large part of the benefits that nature provides humanity.”  If we do not appreciate the concrete value of a resource, we will not notice when someone uses it up, at our collective expense.

Not all natural resources are as easily valued as others.  Here is one example of how natural resources can be valued in actual money terms.  The value of conserving wetlands for flood protection in one city has been estimated at just under US$ 5 million, based on the value of flood damages avoided.

Some further ideas to explore on Natural Wealth Accounts:

Select a species or ecosystem near your school, in your neighborhood or in your area and see if you can calculate, in euros or pounds, what value it has to your community.

Compare the value of this natural resource with some other resource in the area.  For example, is a nearby road of more value to your community than, say, a wetland.

Sources:

The Economics of Ecosystems and Biodiversity (TEEB): Mainstreaming the Economics of Nature: A synthesis of the approach, conclusions and recommendations of TEEB   A synthesis of various reports issued as part of the TEEB project and intended to show how economic concepts and tools can help equip society with the means to incorporate the values of nature into decision making at all levels.

www.teebweb.org/TEEBFinalReport/tabid/29410/Default.aspx

Dr. Cathy Maguire, Biodiversity and Ecosystems – Ireland’s Undervalued Economic Assets in the “Articles” section of the November 2010 issue of irish environment

John A. Dixon and Kirk Hamilton, Expanding the Measure of Wealth, “Finance & Development,” International Monetary Fund, December 1996.

www.imf.org/external/pubs/ft/fandd/1996/12/

Richard Conniff, “What Are Species Worth?  Putting a Price on Biodiversity” Yale Environment 360 e360.yale.edu/feature/what_are_species_worth_putting_a_price_on_biodiversity/2322/

“India set to be first country to publish ‘natural wealth’ accounts”  See link to article in “News” section of irish environment for Wednesday, October 20, 2010 (Archive for October).