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Archive for January, 2013

In the past week, our small area of expertise has received  some BBC Radio 4 coverage. Firstly Start the Week in which Tony Juniper’s new book ‘What has Nature Ever Done For Us?’ was discussed (broadly about environmental valuation). Secondly on the Today programme (from 1.24 onwards) there was a small discussion on biodiversity offsetting.

I thought these programmes were enjoyable, especially the discussion of communicating nature’s attributes through both valuation and art on Start the Week. But to experts (ahem) such as the cows of the pasture, these programmes can be frustrating.  We can become irritated with the line of questioning or the assumption we are blind to potential pitfalls in markets or valuation. We believe that environmental economics has a place in conservation policy and communication, and we don’t want our ideas to lead to a ‘nature NASDAQ’ (cow-pyright).

But for whatever reason, environmental valuation and environmental markets can make people anxious. We can’t deny this reaction. Therefore I think we will be frustrated by environmental economics coverage for a while yet. It takes time to build a wide support base and to win round those with philosophical and practical objections to our approach. But hey, at least we are on the radio!

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Fresh snow made the walk to school today much more exciting than usual. Obviously, wary of rogue parents, I armed myself with a snowball. After all, that must be the only answer to a bad guy with a snowball.

Thing is, some of the other dads, seeing me so aggressively armed, realised they needed to be armed too. Soon enough, most people were carrying a snowball. Afterall, its everyone’s right to carry a snowball.

Nervous glances were exchanged and the atmosphere in the playroom outside class became more tense. Knowing everyone had a weapon made people more edgy, would anyone panic and get their retaliation in first? The widespread presence of weapons seemed to alter people’s behaviour, were the weapons creating more aggression, more bad guys?

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Looking back at working on its nature policies for a week, Colombia holds a concentration of humanities challenges, from melting ice (Colombia is losing its glaciers) to poverty and conflict. Their responses to these challenges reveals the best and worst of the effects of economics on the environment.

The worst is the rapid expansion of mining in response to global metal price rises in the last decade (e.g. gold). This market signal has stimulated production at the cost of colossal externalities from mining, often carried out illegally in nature reserves, but also creating huge health problems. Small scale gold mining uses mercury to separate gold from its ore, but the final stage of burning to separate the mercury (which vapourises at a lower temperature) and the gold is usually undertaken in towns due to the risks of being robbed at rural mine locations. This results in mercury exposure not just to the miners, but to their neighbours in towns. The highest environmental concentration of mercury ever recorded was in Colombia; freshwater biodiversity is suffering.

On the other hand, Colombia is proud of its mega-biodiverse natural environment. It has several policies that earmark resources to conserve the natural environment (e.g. spending part of license fees for companies on forest restoration). So in these cases, economics provides the structure to transfer resources to enhance the environment. It’s a microcosm of how, as an environmental economist, I view the global economy: most markets don’t reflect environmental costs and collectively cause colossal damage, but without markets how can we reallocate resources to protect nature?

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