Nature 'is worth billions' to UK
I can't argue with that, but I do have a problem when campaigners try to put a price on assets that defy monetary classification, which is what the RSPB is doing here.
Some figures emerge with precision, such as the £430m that pollinating insects are calculated to be worth, or the £1.5bn pricetag on inland wetlands, valued so high because they help to produce clean water.
I like the idea that we can calculate the value of pollination with such "precision" that we don't even have to round it up to the nearest hundred billion. I think there might be a bit more to it than that. Without pollinating insects the entire eco-system would collapse so the price is incalculable and any effort to put a dollar sign on it is fatuous.
It gets worse...
The health benefits of merely living close to a green space are worth up to £300 per person per year, it concludes.
This figure combines two factors which cannot be quantified. It first assumes that we can realistically estimate the health benefits of living near "green space"—which is asking a lot—and then assumes that we can translate health into a cash equivalent—which we really can't.
The only wisdom to come out of the whole exercise comes from the economist involved:
Ian Bateman, an economist from the University of East Anglia who played a principal role in the analysis, said that putting a single price on nature overall was not sensible.
"Without the environment, we're all dead - so the total value is infinite," he said.
Obviously, the RSPB is trying to preserve forests and hedgerows and woodlands and so forth, and that's fine. But the whole exercise is curiously uninformative because there's no indication of how we can optimise our natural resources. Would it be better put take land that is currently being used to produce crops and turn them into inland wetlands? Would this somehow make us wealthier?
Would it be more financially beneficial to maintain a field or build an airport? Probably the latter, but the RSPB would want to maintain the field because that's what they're interested in. Again, fine. We understand that. But that being the case, just come out and say it and stop pretending that this is an issue of economics.
It is invariably the case that whenever a figure of x billion appears in a newspaper as being the value or cost of anything that is not readily quantifiable, it is (a) a made-up figure, and (b) is policy-driven. When you dig around in the figures, you will usually find that what at first appears to be a monetary cost, is actually just someone's opinion of what it is worth.
A good example of this was brought up in the comments to a recent post regarding this quote from the Australian press:
"About 17 per cent of Australians smoke, and a ban would cost the government about $6 billion a year in lost revenue. This would be offset by health savings, as the annual smoking-related medical burden tops $31 billion."
[nb. The Australian dollar is currently on a par with the US dollar at about £0.60]
Let's first consider that there are believed to be 15,000 smoking related deaths in Australia every year. If the "medical burden" is $31 billion a year, this means that each person receives over $2,000,000 of treatment. This sounds just a little bit implausible and should have seemed so to the journalist as she typed it out.
And of course it turns out that is not the medical burden. The study that came up that figure accepted—totally contrary to what the hapless hack said—that tobacco taxes exceed the cost to the taxpayerof treating smoking-related diseases:
"Tobacco tax revenue in 2004/05 exceeded tobacco-attributable costs borne by the public sector by over $3.5 billion. Of this surplus $2.7 billion accrued to the Commonwealth and around $800 million to state governments." (p. 72)
This same study did indeed come up with a figure of $31 billion, but it did so by including 'costs' that no reasonable person would consider to be costs. Lost productivity both at work and at home gave them an extra $8 billion (p. 64). Aside from the obvious problem of coming up with a suitable cash equivalent for domestic work, all lost productivity figures are questionable because they rely on an assumption that an individual is capable of a set amount of work in a lifetime and that he/she has a duty to fulfill that quota, otherwise they are somehow costing other people money. It's as if someone dies and you have to go round and clean their house for the next ten years. It's a nonsense.
Still more dubious is the remaining $19.5 billion which is made up of 'intangible' costs (p. 65). This relies on the entirely arbitrary valuation of a life at $2 million, or a loss of one year's living of $53,267. This kind of psychological evaluation is practically meaningless and has no place in economics. You might as well say that the value of life is priceless and, therefore, the costs of smoking (or alcohol, or drugs) is infinite.
And in a way it is infinite, just as the value of nature is infinite. So stop trying to put a cash value on things and say what you mean.