Green accounting of economic growth
A World Bank study offers a new attempt to reconcile growth-oriented economics with Earth-oriented environmentalism. But can economists put price tags on nature?
Pat Rouge/AP Photo
How much is a polar bear worth?
Such questions boggle economists who try to measure the value of nature. Their number-crunching pursuit is especially troubling if an animal or plant is not consumed by humans who, after all, determine “worth.”
Yet the polar bear must have intrinsic value just by its existence. It has become the symbol of what might be lost because of global warming. Its extinction would carry a cost to the animal food chain as well as a psychic cost to humans who enjoy these creatures.
The World Bank and other global bodies are now trying to practice this sort of “green accounting.” It is based on the idea that economics, or the science of understanding markets, can still help promote growth but without depleting the environment.
Some call it “nature capitalism.” And it can bring some surprises.
The World Bank, for example, recently calculated the long-term cost of China’s environmental degradation. It decided that the country’s astounding income growth isn’t really 9 to 10 percent a year. It’s more like 5.5 percent if all the damage to China’s ecosystem – and also its future economic growth – is priced in.
And now a new World Bank report titled “Inclusive Green Growth” proposes putting more price tags on the environment. The reason is clear. Economic growth in poor countries is being threatened by a depletion of natural resources.
Take farmland. One-quarter of the world’s land surface has been damaged by soil erosion, salinization, nutrient depletion, and desertification. And in about a decade, two-thirds of humanity will be facing moderate-to-severe stress in water supplies.