Tuesday, July 20, 2010

Are we liquidating $4.5 trillion in natural capital every year?

Sam Hopkins in Green Chip Stocks: Plenty of companies have found ways to make millions from what’s underneath the earth. And the importance of minerals and hydrocarbons to the modern international economy brings along a need to assign monetary value to resources that are, in their natural state, buried.

Then there’s another world of above-ground riches like timber, flowers, animals and even mountain air that find their way to market just the same, but without a clear, global system for pricing what is removed and sold.

The United Nations is now in the process of creating the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IBPES) to address the challenge of measuring and monetizing the most uncommon natural resources.

While oil, trees, water and even carbon dioxide can be found in enough places to ensure a continuing exchange of money for each commodity for several decades (though not indefinitely), animals and plants are gone once they’re gone.

The International Union for Conservation of Nature says that 2% of the 48,000 species listed as verging on extinction in 2009 were in fact already extinct in the wild. This points to the difficulty of measuring finite populations of flora and fauna and in turn valuing them for their uniqueness.

The task now at hand for the IBPES is basically to convey that biodiversity is a concept almost opposite to the notion of commodity. A commodity is by definition the same no matter where it comes from or who produces it. The same can’t be said for areas of rainforest where each acre could hold thousands of species of what would normally be called the same insect….

Hieronymous Bosch, "The Garden of Earthly Delights," between 1480 and 1505

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