| One reason for this is that a societal
marginal damages curve for biodiversity loss has never before been attempted. There
is one main barrier to determining a societal marginal damages curve: valuing
something that has no market associated with it is extremely difficult. There are no
price cues or demand functions that define just exactly at what point this species or that
species, or all of biodiversity, is worth a given amount. Without a value
associated with biodiversity, a true cost of losing it cannot be determined. To overcome that obstacle, several attempts have been made to
value biodiversity by determining the cost or damages of not having it. One method
of doing so is based on the fact that biodiversity provides a host of services to the
earth, including the human population. Costs or damages are calculated by
determining how much we humans would have to pay to reproduce the same services provided
by biodiversity given that they no longer exist. An example of this is what a city
would have to pay to prevent or repair a flood control problem because the biodiversity
that originally performed that service has gone extinct or populations reduced to such low
levels that it cannot perform the service.
Another method of valuation is to determine how much
an industry loses in net revenue because of a loss of biodiversity. Because
biodiversity is used as an input in many production processes, it has some value to the
firms and to society in the case of pharmaceutical industries. The value of the
biodiversity is not merely what the firm paid for it as an input but also any revenue lost
because of a loss of that input.
One of the major drawbacks of the above methods is
that they include only the use values of biodiversity. Some argue that biodiversity
also has a non-use value, that is, an option value and/or an existence value.
Biodiversity has option value because people value the fact that it [biodiversity] is
there for them to use when, and if, they should ever decide to. The fact that they
actually derive no benefits from it currently has no bearing on whether or not they could
ever receive benefits from using it. Biodiversity also has existence value because
people derive satisfaction from knowing that biodiversity exists: a loss of it would
reduce their satisfaction.
Several examples of the different types of valuation
are described below along with some anecdotal evidence of the value of biodiversity. |
