photo-1448292100102-213a447d3ea2

“Perhaps the most succinct expression of economic failure with regard to nature comes from Pavan Sukhdev: “We use nature because it’s valuable, but we lose it because it is free.” With this remark, Sukhdev places the question of the “value of nature” at the heart of the debate about a Green Economy. The “value” concept is ambiguous and does not necessarily denote a monetary value. But for an economic valuation, the question of price is central. And there is no price on natural assets such as clean air; this is inferred to be the reason for their overexploitation or the root cause of their degradation. The World Bank expresses it as follows: “For economists, greener growth is fundamentally about changing the incentives that have led to environmental degradation and depletion — that is, ‘getting the prices right’.”

For that to happen, prices must exist. Consequently, it argues: “Putting a monetary value on natural ecosystems is a key step on the road to ‘green’ economic growth.”

The fact that natural assets are not priced leads to a “misallocation of capital”, according to UNEP. The great challenge of Green Economy is therefore to integrate into economic calculations and price systems the natural assets that economics has not previously taken into account…”

This is an excerpt of the book “Inside the Green Economy” and is a part of the dossier of the same name.

Read on at: Boell