I hope to be able shortly to post in a little more depth about New Jersey’s Natural Capital valuation project, which was reported on by Janet Babin today for Marketplace. Since the days of Soviet command economies and the joke of Leontief’s input-output tableaux, through the imputation of the value of services (which dominate goods in the post-industrial economy), down through today’s valuation of privately-held companies, the assignment of a dollar figure to a transaction or an asset when no money is changing hands at a market-clearing price is a dodgy proposition. So a healthy skepticism is in order when it comes to assigning dollar values for the services provided by an ecosystem. Nevertheless, I am encouraged by New Jersey’s efforts to do just that.
Protecting the environment is a public service provided by government (along with other entities), and it requires the expenditure of money and effort to do it. So environment protection competes, if you will, for the scarce resources available to government, which is beset by demands for all sorts of other services (some of them worthwhile, some of them hopelessly foolish, some of them mere plundering). Putting a dollar figure on the value of undeveloped land, even one that is wrong by an order of magnitude, helps legislators and policymakers compare apples to apples and make better-informed decisions.
There is a tendency among certain members of the environmental community to treat the environment as a treasure without price, and in the extreme, that’s true. (It should be noted that defenders of human life and liberty, be they terrorism hawks or right-to-lifers, tend to argue similarly.) But I’m beginning to think that this is a fruitless way to reason about natural resource conservation.