The value of nature

Clive Aslet doesn\’t like the calculating of it:

I’d say that the process is as ridiculous as trying to put a value on human life, except that we already do exactly that: judges do so when they instruct insurance companies to pay compensation claims. Society needs a means of quantifying loss, and money is only the medium available.

Miss Spelman argues that this is the same with the planning system. So, in order to compare commodities that have nothing obviously in common, they are reduced to a single unit – money. Until now, the things that some of us most treasure in life – purple-clad hills, ancient ruins – have not punched their weight. Without a measure of their worth, they didn’t count. The National Ecosystems Assessment is a brave attempt to redress this imbalance. Brave, but manifestly daft.

No, not daft, eminently sensible.

We humans are the only people out there who put values on things. Thus the value of something is what humans value it at.

The correct way to value a bluebell wood therefore is to find out what value people put on a bluebell wood. You could go ask them \”How much is that worth?\” but that\’s not a very accurate method for people lie about such things. A more accurate one is to look at their actions: they act as if it is worth how much?

With the value of human life this is a well defined (even if not totally accurate) process. We look at the known dangers of various jobs and the wages that are demanded to undertake such jobs. If, crudely, a 1 in 1,000 risk of death per year leads to a £1,000 pay raise then we can say that the risk of death in a year is valued at £1 million. Times a 40 year working life, we value our lives at £40 million (real numbers are in the £2 -£5 million range I think? Certainly, US ones are in the $6-$8 million range).

But why do we do this? So that we can work out how much money to spend on safety. If it costs £100 million to save a statistical life which is valued at £5 million, then we\’re poorer by £95 million. If it costs £100,000 to save that same statistical life then we\’re richer by £4.9 million.

Sadly, we\’re not ruthless enough in actually using this insight. We do have various environmental laws which cost huge amounts per life saved. There\’s several EPA (thus US) regs that are over a $billion per life saved.

And why should we need to do this with bluebell woods?

Well, how can we decide whether we\’d rather have a bluebell wood or houses for the homeless unless we can weigh the relative values of a bluebell wood and houses for the homeless?

So, yes, we must value bluebell woods. And that value is what people, by their actions, seem to value it at. £10 an acre? In go the bulldozers. £1,000,000 an acre? Flowers instead of homes.

5 thoughts on “The value of nature”

  1. If done that way surely human life calculations are flawed as humans are poor at judging extreme events.

    If you offered someone £2m to kill themselves I don’t think most people would take it (possibly some would).

    It also doesn’t take into account the value placed by other people on your life, does it?

  2. If we didn’t do this, we’d hav ethe problem we experienced recently on the railways when John Prescott decided that a live could not be valued and thus Railtrack (?) had to fix all problems no matter how expensive and little they improved safety.

  3. You’re right, Tim. The basic value of a human life is about £2M. To the Dept of Transport. If improving a road layout to save a life costs less, then they’ll do it. If it would cost more, they won’t.
    To the environmental agency the sums are a bit more complicated but comparable. Thus they built the Thames Barrier but don’t build groyns on rural Suffolk coasts to prevent erosion.
    I also like your notion of revealed preference for how people value (£) things. But there’s the small problem that they value things they don’t own, such as views, low-rise neighbours, pasture over cereal production etc which rather b-ups the valuation.

  4. So you’re saying on average people would be willing to die for £2m?

    Tim adds: No, of course not. It’s the value of a statistical life.

  5. So it’s not what we value our own lives at and it’s not comparable to ‘values’ we put on other things such as apples.

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