Contribution to GTI Roundtable "Monetizing Nature"

Robert Costanza

I would like to make a few clarifying points about valuation and ecosystem services. “Monetization” is not the right term because it is negatively loaded and does not reflect what real valuation (in whatever units) is about, as I explained in a recent article. Unfortunately, such framing leads many down what I consider to be inaccurate and counterproductive paths. I would refer people to the work of the Ecosystem Services Partnership to learn more about what the thousands of individuals and groups around the world are doing to apply ecosystem services to solving the wicked problems we now face.

(1) Ecosystem services as a concept highlights the interconnected, dynamic interdependence between humans and the rest of nature. If anything, it is the conventional environmental and economic views that perpetuate the myth that humans are separate from the rest of nature. Environmentalists want to protect nature from people. Economists want to ignore nature as irrelevant. Both separate nature from people. The concept of ecosystem services makes humans’
interdependence with the rest of nature more obvious and tangible.

(2) Valuation of ecosystems is not something we can choose to do or not do. Far from being impossible, it is happening every day, all the time, every time we make a decision that involves trade-offs that affect ecosystems. The problem is that this valuation is implicit in the decision, not explicit and transparent. We are better off trying to pull back the curtain, messy and imperfect as that process might be.

(3) Valuation is not the same as monetization, commodification, privatization, etc.  Valuation is about communicating trade-offs, and the units chosen to express those trade-offs are arbitrary and depend on how well they communicate. We could use money, energy, time, land area, oranges, etc., as the common denominator. Money communicates trade-offs well because most people use money for this purpose (and they do not use energy, land, oranges, etc). A key distinction that many miss is that ecosystem services valuation is about trade-offs with sustainable well-being, more broadly defined, and not just market production.

(4) However, expressing values in monetary units does not imply that these values came from market (or even pseudo-market) exchanges. The whole point is that most ecosystem services are outside the market—and should remain there. They contribute to human well-being just by existing and functioning, not necessarily by being exchanged in markets. A key confusion here is about property rights. Creating conventional markets requires privatization and that requires goods and services that are rival and excludable. Ecosystems are public goods, and should be managed as common assets, not privatized, but still assigned property rights on behalf of the community. The public trust doctrine is the relevant emerging legal basis for this.

(5) I am afraid that some in the environmental community are again shooting themselves in the foot by not embracing ecosystem services as one additional tool that can be used to help protect and restore the environment. It is not an either-or decision. And is the key word, not or. We need all the ammunition we can get.

Robert Costanza
Robert Costanza is Professor and Chair in Public Policy at the Crawford School of Public Policy, Australian National University. He is co-founder and past president of the International Society for Ecological Economics and founding editor-in-chief of Solutions.

Cite as Robert Costanza, contribution to GTI Roundtable "Monetizing Nature," Great Transition Initiative (August 2014),

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