P6.13-00 Social Accounting

Theme: Social Accounting
Moderator: Hans Jöbstl
10.8.1995 16:30 Room: E2

Ethics, Prices and Biodiversity

Wandén, Stig

The purpose of this paper is to show that the methods of determining monetary values of biodiversity depend on one's ethical point of departure.

First, a short summary of various ethical principles distinguishes between anthropocentric and biocentric approaches. The first approach relies on various definitions of the unique and essential quality of humans that constitute their ethical value: neurological properties, the ability to think rationally, or social abilities. The second approach either assumes similar ethically relevant properties, such as the ability to feel pain, or state that ethical values are associated with the nature as a whole (the principle of holism). In the latter case, the network approach should be distinguished from the keystone species approach.

The problem whether we should extend the market system and let the price mechanism encompass biological diversity, i.e. put prices on biodiversity, is basically connected with our ethical points of departure. To simplify the matter, the antropocentric approach leads to an ethics of freedom, where the individual has the right to decide what is good and to implement it. Then the individual's willingness to pay for biodiversity is a relevant criterion for its price, in particular if the ability to think rationally is ethically essential. But the biocentric approach rather implies that an ethic of law is more important, valuing the real needs of Nature higher than the preferences of the individual consumers. Then the costs for protection or replacement are relevant, because they reflect what Nature needs, but not what humans want. These basic positions highlight the main difference between the antropocentric and biocentric approaches regarding pricing, but obviously need qualifications. These are discussed in the paper.

One question concerns who is to decide the prices of biodiversity. If the willingness to pay is the criterion, then obviously the market or a randomly chosen number of consumers should decide, according to by now well-developed methods. If on the other hand the costs of protection or replacement are relevant, technical and economic experts have to calculate them ­ given the politically decided level of biodiversity to be restored.

The basic question is of course whether the market and the price mechanism at all should be considered acceptable instruments to protect biodiversity. This central issue is not discussed in the paper. However, it is noted that some environmentalists find the wish to maximize one's utility (the essence of the market system) incompatible with environmental ethics. Also, the discussion shows that the price mechanism may take various roles. Thus, prices may convey different information about the value of biodiversity, depending on which role we assign to them.

Key words: environmental ethics, pricing, willingness-to-pay, biodiversity.

Correspondence: Stig Wandén, SNV, S-106 48 Stockholm, Sweden

E-mail: saw@environ.se