COMMODITY, AMENITY, AND MORALITY

The Limits of Quantification in Valuing Biodiversity

BRYAN NORTON

What is the value of the biological diversity of the planet? That question reminds me of a game we used to play at ice cream socials and church picnics when I was growing up in the Midwest. Someone on the entertainment committee would count an assortment of screws and gimcracks, or nuts and bolts, and put them into a mason jar. At the Christmas party, it was pecans, walnuts, and hickory nuts. Everybody else had to guess: How many whatchamacallits are in the jar?

Pretend we're having an ice cream social on an improved version of the space shuttle. Someone looks down and says, "What's the value of the life on that planet down there?" The closest guess wins a door prize.

But our question is tougher than nuts and bolts. Recently, scientists discovered bones from a dinosaur they have called seismosaurus. That animal was 18 feet tall, more than 100 feet long, and weighed 80 tons. The diversity in size between a seismosaurus and the smallest microbe is staggering. And I used to be thrown off when they put washers of two different sizes in the mason jar! Given the diversity in size among species, not to mention the fact that many species live inside others, it is not surprising that scientists have left themselves some latitude in their guesses as to how many species there are: they estimate that there are between 5 and 30 million species.

That's O.K. I never did very well at the guessing game myself. One time I guessed that a jar contained 452 nuts and bolts. The correct answer was more than 2,000. I won the booby prize for being the farthest off; my prize was the jar and its contents.

But again, I can't help mentioning how much more difficult our current task is. We would hardly have begun to place a value on biodiversity if we had known how many species there are. We're supposed to put a value on them. In what terms?

When I looked into a jar, I was always a bit overwhelmed at first, so let's not give up yet. Eventually, I'd decide to be systematic about my guess. I'd divide the jar into somewhat equal sections and try to do a rough count for one of them. Then, I'd multiply by the number of sections. Despite my lack of success, it's a reasonable approach; we can call it the divide-and-conquer method. Economists and other policy analysts have adopted a similar method for valuing biotic resources. They usually try to estimate, however toughly, a value for one species (Fisher, 1981; Fisher and Hanemann, 1985). If they could assign a value to a few species, such as the snail darter, the Furbish lousewort, and the Califomia condor, then we might average the values of those species and then multiply that average value by the number of species there are, if we only knew how many species there are.

All this averaging and multiplying will require that we use numerical values, so we might as well follow economists in trying to use present dollars as the unit of value. Before introducing the technical terms used by economists, let's start with some ordinary concepts: species can have value as commodities and as amenities, and they can have moral value.

We'll say that a species has commodity value if it can be made into a product that can be bought or sold in the marketplace. In this category, alligators have potential value in the manufacture of shoes, but they may also have indirect commodity value if it turns out that vinyl shoes stamped in an alligator pattem sell for more than plain vinyl shoes. Indirect value of this sort is especially important in the pharmaceutical industry, since many of our most valuable medicines are synthetic copies of biologically produced chemicals (Lewis and Elvin-Lewis, 1917; Myers, 1983).

A species has amenity value if its existence improves our lives in some nonmaterial way, e.g., when we experience joy at sighting a hummingbird or when we enjoy walks in the forest more when we sight a ladyslipper. Hiking, fishing, hunting, bird-watching, and other pursuits have a huge market value as recreation, and wild species contribute, as amenities, to these activities. Bald eagles, for example, have not only inspired the production of millions of dollars worth of Americana, but they also generate aesthetic excitement through a whole area that is blessed with a nesting pair of them.

Finally, species have moral value. Here, we begin to encounter controversy. Some philosophers would say that species have moral value on their own. They are, according to this view, valuable in themselves, and their value is not dependent on any uses to which we put them (Regan, 1981; Taylor, 1986). We will not be able to settle this issue. Suffice it to say that species have moral value even if that moral value depends on us. Here, Thoreau comes to mind. He believed that his careful observation of other species helped him to live a better life (Thoreau, 1942). I believe this also. So there are at least two people, and perhaps many others, who believe that species have value as a moral resource to humans, as a chance for humans to form, re-form, and improve their own value systems (Norton, 1984; Norton, in press).

Moral values that people attach to species are quite high. Responses to questionnaires have indicated that people place a surprisingly high value on just the knowledge that a thing exists independent of any use (Randall, 1986, and Chapter 25 of this book). Economists, using a method called contingent valuation, create shadow markets in which they can ask people how much they would be willing to pay to protect a species, quite independent of any use of the species (see Chapter 25). If existence values can be thought of as a rough indicator of moral values for present purposes, we can say that species also have considerable moral value, measurable in dollars.

So, we can say with some confidence that some species have considerable commodity, amenity, and moral value. The problem that economists have encountered is that these values are distributed very unevenly among species, at least given our current knowledge. For example, Hanemann and Fisher (1985) have surmised that under certain assumptions, a wild grass recently discovered in Mexico, a perennial related to corn, may prove to have a value of $6.82 billion annually, and they calculated its value for only one possible use--the creation of a perennial hybrid of corn (Fisher and Hanemann, 1985; see also Chapters 10 and 11 of this volume).

At present, however, we do not have sufficient knowledge to calculate the value of most species. Consequently, in addition to the known values that economists note with respect to some small number of species, they also calculate an option value for species of unknown worth, i. e., the value we should place on the possibility that a future discovery will make useful a species that we currently think useless (Fisher and Hanemann, 1985; see also Chapter 25 of this book). If we extinguish a species now, such discoveries are precluded. Fisher and Hanemann therefore define option value as the present benefit of holding open the possibility that some species we might eradicate today may prove valuable in the future. They would ask people how much they are willing to pay to retain the option of saving the species, given the possibility that new knowledge indicating its value may be discovered in the future.

One important aspect of option value is that it applies equally to commodity, amenity, and morality. As time passes, we gain knowledge in all of these areas, and new knowledge may lead to new commodity uses for a species or to a new level of aesthetic appreciation, or our moral values may change and some species will, in the future, prove to have moral value that we cannot now recognize.

If placing a dollar figure on these option values seems a daunting task, the situation is actually far worse than it first seems. Calculations of option value can only be begun after we identi* a species, guess what uses that species might have, place some dollar value on those uses, and estimate the likelihood of such discoveries occurring at any future date (so that we can discount the values across time). Once we've done all that, we can try to figure out how to translate those future, possible values into present dollars. I think it is safe to say that despite the great theoretical interest in assigning use and option values to species, and some impressive strides in modeling these formally, it may be a long time before the total value of even one species can be stated in terms of present dollars (Norton, in press).

It is worth stepping back to look at the most difficult problems faced by the divide-and-conquer method. First, there is the problem of irreversibility. In general, economists have trouble with decisions where one of the options cannot be reversed. This is an especially important problem for biodiversity. If we decide to have a dam and give up a species, blowing up the dam won't bring the species back.

Second, we are forced to make present decisions under conditions of uncertainty--another problem for assigning present values. Our ignorance of species is mind-boggling. Suppose you're walking on a hillside in Mexico. Your eyes fall on a few tufts of nondescript grass. Would you guess that grass is worth $6.82 billion annually? Only if you knew that it was a member of the corn family, that it is a perennial, that . . ., and so on. Scientists believe that they have identified and named approximately 15% of the species on Earth (Myers, 1979), and we have rudimentary knowledge of the life characteristics of only a few of them. It is an understatement to refer to this level of ignorance as mere "uncertainty."

A third problem with the divide-and-conquer method derives from ecological knowledge. Species do not exist independently; they have coevolved in ecosystems on which they depend. This means that each individual species depends on some set of other species for its continued existence. A species may depend on just one other species for food, or it may depend on an entire complex of interrelated species. This seems to imply that if we now take actions that cause the extinction of any species, then the loss in future benefits should include losses accruing if any other dependent species succumbs as well. Species on which others depend therefore have contributory value in addition to their direct uses (Norton, in press). To extinguish a species on which two other species depend is to extinguish three species. Thus to get the full value of a species, we would somehow have to determine the values of all the other species that depend on it.

It also appears that some species are keystones in their ecosystems. For example, when the Florida alligator populations dipped dangerously low about 15 years ago, wildlife biologists noticed that many populations of other species also declined. During the dry winters in the Florida Everglades, other species depended on alligator wallows as their source of water (Taylor, 1986). Must we say then, that the value of the alligator includes the value of most of the wildlife in the Everglades?

In principle, these ecological facts add no complication. We need only factor in the ecological information regarding the interdependencies among species in ecosystems. Then, we could tally the direct uses and option values of a species and add to this the uses and option values of all dependent species, and so forth. But, of all the areas of biology and ecology, few are less understood than interspecific dependencies. Ecologists cannot even identify all the interdependencies in the systems they understand best. There is no hope that sufficient information will become available for us to determine the interdependencies in tropical forest ecosystems before the forests are destroyed.

Aside from all these problems, the divide-and-conquer method is not even asking the right question. The value of biological diversity is more than the sum of its parts. Even if we could place a value on the biological diversity represented by all species, we would be only part way to an answer to the question, "What is the value of biodiversity?" To answer that question, we would have to include also the genetic variation within species across populations and the variety of interrelationships in which species exist in different ecosystems.

The reason my guesses on nuts and bolts were often very far off, even with my divide-and-conquer method, was that I never completed my calculations before an answer was required. I was always overcome by the uncertainties involved. Did the little area I counted represent one-twentieth or one-twenty-fifth of the jar? Is it representative? In order to answer that, I'd shake the jar, only to discover all the small washers were at the bottom. So, I'd have to count again and recalculate. "Time's up. Turn in the scrap of paper with your name and number. The game's over." I'd end up writing down a random number and suffering the embarrassment attendant thereto. As species become extinct at an ever-increasing rate, resulting in the loss of a fifth or a fourth of all species in the next two decades, according to various estimates, I fear economists and biologists are in a similar situation.

Rather than continuing my attempt to answer this difficult question on the value of diversity, it may make more sense to take a careful look at the question itself and why we are trying to answer it. The question says a lot about us, the questioners. It is a measure of our unique arrogance that we are the only species that calls symposia and writes books to address that question. The sense of arrogance is hardly diminished when we note our usual reasons for asking it. Why are some people so insistent that we put dollar values on species diversity? Because, we are told, important decisions are being made that may extinguish other species. These decisions must be based on some kind of analytic framework (which means each species must be given value in our economic system). If we do not put some dollar value on a species, it will get left out altogether. In other words, they want us to put dollar values on species so they can compare these to the value of real estate around reservoirs and to kilowatt-hours of hydroelectric power.

Suddenly, the fun goes out of our guessing game. A new analogy seems more apt: I have been in a terrible accident, and I wake up in a hospital bed on a lifesupport system. The hospital is short on funds, and the hospital administrators are having a meeting at my bedside. They say they have examined all the other methods to raise the necessary money, and they are proposing to sell a few spare parts from my life-support system at a yard sale. One of them says, "This equipment is so complicated, a few parts won't be missed." "How much do you think this part is worth?" asks another, pointing toward a piece of shiny metal. I try to see what the part is connected to, but it is screwed into a big metal box that looks important. "Or that one over there; it looks like it's just cosmetic," another of them suggests. I almost agree, and then I notice that a main power line passes through it. "Stop! Not that one," I say. Just in time.

It is one thing to treat the valuation of biodiversity as a guessing game or as a set of very interesting theoretical problems in welfare economics. It is quite another thing to suggest that the guesses we make are to be the basis of decision making that will affect the functioning of the ecosystems on which we and our children will depend for life.

If we are not taken seriously unless we quantify our answer, I would like to suggest some new units of measurement. An oops is the smallest unit of chagrin that we would feel if we willfully extinguish a species we need later on. A boggle is the amount of ignorance encountered when an economist asks a biologist a question about species and ecosystems, and the biologist answers: "I don't know, and I'm so far from knowing, it boggles the mind." If I understand what the economists are saying, irreversible oopses and boggles of uncertainty are the main factors in decisions affecting biodiversity. In the passion to express the values of a species in dollar figures, it will be unfortunate if we forget to count oopses and boggles as well.

I believe that we should abandon the divide-and-conquer approach. I suggest we use the big picture method instead. Now, the question is easier. The value of biodiversity is the value of everything there is. It is the summed value of all the GNPs of all countries from now until the end of the world. We know that, because our very lives and our economies are dependent upon biodiversity. If biodiversity is reduced sufficiently, and we do not know the disaster point, there will no longer be any conscious beings. With them will go all value--economic and otherwise.

I am afraid this answer will not be useful to those who want to know the value lost when they act to extinguish a species, but it seems a better answer than a guess, even a guess that counts oopses and boggles as well as dollars.

One thing we know: if we lose enough species, we will be sorry. The guessing game is really Russian roulette. Each species lost without serious consequences has been a blank in the chamber. But how can we know before we pull the trigger? That is the question we should be asking (Ehrlich and Ehrlich, 1981).

REFERENCES

Ehrlich, P. R., and A. Ehrlich. 1981. Extinction. The Causes and Consequences of the Disappearance of Species. Random House, New York. 305 pp.

Fisher, A. C. 1981. Economic Analysis and the Extinction of Species. Report No. ERG-WP-81-4. Energy and Resources Group, Berkeley, Calif. 19 pp.

Fisher, A. C., and W. M. Hanemann. 1985. Option Value and the Extinction of Species. California Agricultural Experiment Station, Berkeley. 35 pp.

Lewis, W. H., and M. P. F. Elvin-Lewis. 1917. Medical Botany. John Wiley & Sons, New York. 515 pp.

Myers, N. 1979. The Sinking Ark. Pergamon, Oxford. 301 pp.

Myers, N . 1983. A Wealth of Wild Species: Storehouse for Human Welfare. Westview Press, Boulder, Colo. 274 pp.

Norton, B. G. 1984. Environmental ethics and weak anthropocentrism. Environ. Ethics 6: 131-148.

Norton, B. G. In press. Why Save Natural Variety? Princeton University Press, Princeton, N.J.

Randall, A. 1986, Human preferences, economics, and the preservation of species. Pp. 79-109 in B. G. Norton, ed. The Preservation of Species. Princeton University Press, Princeton, N.J.

Regan, T. 1981. The nature and possibility of an environmental ethic. Environ. Ethics 3:19-34.

Taylor, P. W. 1986. Respect for Nature. Princeton University Press, Princeton, N.J. 323 pp.

Thoreau, H. D. 1942. Walden. New American Library, New York. 221 pp.