How much is “the environment” worth?

Questions

When I get the opportunity, I talk to school children about all things environmental, including sustainability, circular economies, and climate change. Why do I do this? Mainly because every now and again, a child asks me a question that stops me in my tracks and makes me realise that I am not as smart as I would like to think I am. We spend a great deal of time talking about high-level issues, but sometimes we forget the basics—the starting points of why, how, where, when, and who.

Answers

So, what are the big questions that I get asked? The first one is “What is the environment?” It may sound simple to answer, but where do you start and where do you stop? The answer must be broad and simple enough for a child to understand, but not so simple as to insult the intelligence of the individual. The other question that has come up is “What is the environment worth?” This is another question that can be answered simply or at book length. I am going to try, in this short column, to answer these two questions.

What is the environment?

The environment consists of all living and non-living things in a particular area, including air, water, land, plants, animals, insects, and microorganisms. It also refers to the external conditions and surroundings in which a person, plant, or other organism lives or survives. This can also include social, political, and cultural circumstances that affect an individual or a group. In other words, from a human point of view, it is everything in the space that we occupy or live in that provides us with the means and ability to survive.

What is the environment worth?

Once again, this is an extremely broad question which starts with the follow-up question, “What do you mean by ‘worth’?” The first thought is “worth” in terms of monetary value. The second is “worth” in terms of non-monetary value or cultural, spiritual, and intrinsic worth, which cannot be captured in numbers alone.

What is the monetary worth of the environment?

Putting a monetary value on the global ecosystems that sustain humankind’s continued survival is very challenging. Estimates suggest that global ecosystem services are worth over $150 trillion ($150,000,000,000,000) per year, or about 1.5 times the world’s GDP in 2023. Other reports, such as those based on a framework called Nature’s Contribution to People (NCP), estimate the value at $ 125 trillion annually, according to the World Economic Forum. For example, the Great Barrier Reef contributes US$5.7 billion to the Australian economy each year and supports 69,000 jobs. Meanwhile, the economic worth of natural land-based assets in the Americas exceeds US$24 trillion annually, roughly matching the region’s gross domestic product (GDP). It is only relatively recently that economics has acknowledged the monetary value of the environment. Historically, the environment was regarded as “free goods,” available to all at no cost. For instance, in theory, an industry could pollute the air freely without bearing the costs associated with that pollution.

What is the non-monetary worth of the environment?

Put simply, it is human survival. We need air, water and food, which are provided by the environment. Without that, we as humankind will ultimately cease to exist. We can also identify a wide range of intrinsic, social, and cultural benefits beyond market prices, such as spiritual and aesthetic experiences, cultural identity, and emotional connection to places.

The future