Researchers Assign Monetary Value to Nature to Promote Sustainability
Imagine that you are considering selling stocks that you own in a company. You would probably consider how much the shares are worth today, how much they might be worth in the future and how much you might receive in dividend payments for each year you hold onto the stock. Much of your decision is informed by market wisdom and research.
Now imagine that you manage acres of old-growth forest—or another natural resource, like some fish in the ocean. How do you decide whether to use the resource now or conserve it as natural capital for the future?
Photo courtesy of Shutterstock
In a study published recently in the Journal of the Association of Environmental and Resource Economists, researchers from Arizona State University (ASU) and Yale University have developed a first-of-its-kind, interdisciplinary equation to estimate the current monetary value of natural resources such as fish stocks, groundwater or forests in the U.S. In assigning natural capital monetary value, the approach will have widespread implications for policymakers and various stakeholders, and will also advocate for the creation of robust asset markets for natural capital, a much-needed advance.
Nature Is Capital
“It is often said that nature is capital, but this has largely been a metaphor thus far; former measurement methods have lacked necessary inputs from experts from various disciplines, resulting in vast gaps of information,” said Joshua Abbott, associate professor at ASU’s School of Sustainability who coauthored the study with Eli Fenichel, assistant professor at the Yale School of Forestry and Environmental Studies.
“This approach to valuation is forward-looking and inherently interdisciplinary,” added Fenichel. “It accounts for the role of ecological dynamics in shaping the future direction of natural capital stocks, and also incorporates the role of human behavior in shaping this direction, as well as how real-world management policies mold this behavioral feedback.”
Unlike earlier approaches, the method takes into consideration the “opportunity cost” of losing future units of natural capital that could have helped replenish the resource, providing economic benefits in the long run. It is underpinned by the economic principles also used to value physical or human capital.
The Value of a Fish in Water
Consider the example of reef fish in the Gulf of Mexico. During their research, Abbott and Fenichel found that the value of preserving live reef fish was more than $3 a pound in 2004, a price that jumped to almost $9 in 2007 after policymakers implemented management reforms that incentivized conservation. Under the scheme, fishermen were assigned individual tradable quotas or shares of the fish stock, which created a market for the fish as a capital asset.
The Gulf’s reef fish contributed more than $256 million to U.S. national wealth in 2004—and three times that after management reforms.
“We know from experience in the corporate world that changes in management practices can enhance the overall value of a company’s assets; it is no different with natural capital—our management of it can either enhance or detract from its value,” said Abbott.
According to him, what goes unmeasured often goes unvalued. The ability to treat fish in the water as a capital asset encouraged fishermen to preserve the natural resource, in turn enhancing sustainable fishing practices that led to higher returns.
Implications for Sustainable Policymaking
In assigning a dollar value to natural capital, Abbott and Fenichel’s approach will have widespread implications for policymakers and various stakeholders, putting natural capital on an equal footing with other, more easily measured parts of society’s wealth. The researchers hope to apply the method to measure the value of all U.S. fish stocks, as well as other natural assets like groundwater and forests.
“Sustainability can be defined as ensuring that the assets the next generation inherits are worth at least as much as they were when the previous generation received them,” said Abbott. “As humans, we are not going to have zero impact on the environment, but we want to make sure that the value of human, physical and natural capital that we pass on to future generations is worth no less than when we inherited them.”
“We are pursuing this research to help provide better measurements of society’s wealth, so we can know whether we’re moving in a sustainable direction,” Abbott concluded.
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It's going to be back-to-school time soon, but will children go into the classrooms?
Keeping Schools Safe<p>What will safer schools look like?</p><p>In a <a href="https://jamanetwork.com/journals/jama/fullarticle/2766822" target="_blank">JAMA article</a> published last month, <a href="https://www.jhsph.edu/faculty/directory/profile/1781/joshua-m-sharfstein" target="_blank">Dr. Joshua Sharfstein</a>, a pediatrician and professor at the Johns Hopkins Bloomberg School of Public Health, outlined suggestions — many of which are similar to AAP's.</p><p>Remote learning protocols must stay in place, especially as some schools stagger home and in-building learning. If another shutdown needs to occur, children will rely on distance learning completely, so it must be easy to switch to, he said.</p><p>He suggested giving parents a daily checklist to document their child's health. Kids should be screened quickly on arrival and be given hygiene supplies. Maintenance staff should use appropriate PPE and have regular cleaning schedules. A notification system should be in place if a case is identified, Sharfstein recommended.</p><p><a href="https://www.albany.edu/rockefeller/faculty/erika-martin" target="_blank">Erika Martin</a>, PhD, an associate professor of public administration and policy at University at Albany, said nutrition assistance and health services should be included. She called for tutoring programs with virtual options as well as technology access.</p>
Supporting Staff<p>Teachers and staff will be affected by safeguarding measures, noted <a href="https://directory.sph.umn.edu/bio/sph-a-z/rachel-widome" target="_blank">Rachel Widome</a>, PhD, an associate professor of epidemiology and community health at University of Minnesota.</p><p>"In order for all of the in-school precautions to work well, we'll be asking a lot of teachers and staff," Widome told Healthline. In addition to their usual workload, they'll now be asked to monitor mask-wearing, ensure children are keeping distance, and be aware of any symptoms.</p><p>Along with Sharfstein, Widome called for an increase in financial support. More employees will likely be required so teachers and staff members can keep up with the added demands.</p>
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What Parents Can Do<p>Parents should ask for and receive frequent updates from schools about plans for the fall. They should also be informed about plans if and when COVID infections are identified, Sharfstein said.</p><p>"I'd like to see parents investing now, during the summer, in doing things that can slow and stop the spread of the virus in their communities," Widome said.</p><p>"Now is a good time for kids to practice wearing masks and get used to them as they may be wearing them for longer stretches if school starts up in person," Widome suggested.</p><p>She recommends parents try different mask designs and materials to see what children are more comfortable wearing.</p><p>"If you are using cloth face coverings, it's good to have extras on hand," Widome added.</p><p>Parents should model healthy behavior at home and while out in public — another thing that could affect how well children adapt to reopening practices, Sorensen said.</p><p>"Children may want to know more about face coverings," added <a href="https://www.linkedin.com/in/leescott/" target="_blank">Lee Scott</a>, chairwoman of the Educational Advisory Board at <a href="https://www.goddardschool.com/" target="_blank">The Goddard School</a>. "Dramatic play, such as creating or wearing a face covering, may help some children adjust to this concept." Schools can also show children photos of what faculty members look like in their masks so the students are familiar with that appearance.</p><p>Johns Hopkins University recently released its eSchool+ Initiative, a slew of resources surrounding education during the pandemic. These include a <a href="https://equityschoolplus.jhu.edu/reopening-checklist/" target="_blank">checklist for administrators</a>, report on <a href="https://equityschoolplus.jhu.edu/ethics-of-reopening/" target="_blank">ethical considerations</a>, and a tracker of <a href="https://equityschoolplus.jhu.edu/reopening-policy-tracker/" target="_blank">state and local reopening plans</a>.</p>
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