Saturday, April 26, 2014

Video - Pricing Nature is Far Harder than you Think

While there is a lot of interest in market based solutions to price nature, it is far harder in practice than it would appear in theory. This short animation from Joss Tantram, partner at UK sustainability strategy firm Terrafiniti, LLP, explains in very simple terms some of the problems associated with pricing ecosystems.

Titled “How Much is Your Mother Earth Worth?” this video uses the metaphor of assigning a monetary value to our mothers. While we can attempt to base her value on individual benefits she brings to our life, we will ultimately undervalue her.

“Value implies price, price implies sales, and sales imply markets — if we are not careful we will reduce everything to money and lose sight of the real value we started with,” he said. “The idea that: ‘If we can’t measure it we can’t manage it’ pervades much of our current ways of prioritising activity. However, there are many cases when it simply does not either apply or help. For instance, how do you quantify the love you feel for your children, your parents or partner? You don’t. You know the value without needing to know the quantity. Finding an exact figure is irrelevant and pointless.”

Tantram added, “In essence the trouble with pricing the priceless is that it implies fungibility (economic “swap-ability”); by putting a price on your mother, you are essentially saying that you’d be equally happy with a different one that cost the same.”

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