Leonie Joubert on measuring the real value of the world

Dear friends,

A decent cup of coffee could set you back R24, you’ll pay about R1.62 for a glass of milk, and squeezed citrus will cost around R13 per litre. But how much should we pay for a sip of clean water. And what’s the value of a glass of fresh, unpolluted air, asks Leonie Joubert?

“Climate change is a massive failure of the markets,” sustainability consultant Steffen Johnsen’s voice cut through the unusually hot Copenhagen afternoon. He smiled wryly.

“And now we’re using markets to fix the problem!”

Johnsen is with the Nordic Agency for Development and Ecology (NORDECO) and we were in a discussion about carbon markets, the controversial idea of turning carbon pollution into a kind of currency for trading on a new fangled market in order to slow the polluting processes that got us into this mess in the first place.

He had a point. Like so many modern environmental crises, climate change is a failure of the markets because when the markets have added up the cost of anything, they’ve excluded the value of nature’s goods and services from the bottom line.

Take the atmosphere. Think of it as a massive landfill that we’ve been dumping our gaseous waste into for hundreds of years – free. If we’d had to pay a local municipality or government to take care of that “rubbish” for us, we’d have added that cost of it into our own bottom line. We’d have tweaked our household budget to include it, and maybe not bought that extra bottle of wine or maybe even chosen a cheaper car to bring down the monthly repayments.

Now, after centuries of free use, the landfill in the sky has almost reached capacity. The rubbish we’ve dumped into it is about to spill over the top. Now we want to penalise economies for using that landfill, and the market’s getting very twitchy at the thought.

Economics is a bit baffling, to be honest, and the global carbon market even has the experts’ brows furrowed at the complexity. But it raises some interesting ideas about how we’ve been using so many of nature’s goods and services gratis.

Yes, we pay for the can of coke, but we don’t pay for the value of nature’s evolutionary processes that gave us the biological diversity which culminated in sugar cane. We don’t pay for the river catchment that soaked up the rain and channelled it to the field where the cane grew. Likewise, we don’t pay for the service provided by the atmosphere which brought that very rain, nor do we pay for the waste sink it provides when it takes up all those emissions put out during the production, cooling and shipping of that coke.

If we added those “externalities” (to use an economist’s term) into the equation, the can of coke might cost more than caviar.

Now that glass of tap water feels more valuable than the pittance we pay our municipality to deliver it to our kitchen tap! And as for the breath of air I just drew as I wrote that? Priceless.

Download this article here.

© Leonie Joubert, July 2009

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