Is nature ‘priceless’ or should we embrace natural capital accounting?

Blog by Craig Simmons, Co-Founder and Director, 18 July 2012

It was in response to customer concerns over increasing materialism, so the story goes, that credit card company Mastercard launched its long-running ‘Priceless’ advertising campaign in 1997. Across radio, TV and printed media, the catchphrase was repeated, drummed into our heads; “There are some things money can’t buy. For everything else, there’s MasterCard.”

The campaign was hugely successful – and widely parodied. Clearly it struck a chord.

How to value ‘stuff’ has been challenging economists since Malthus. Are things really ‘priceless’, as Mastercard proclaims, or can we legitimately put monetary value on just about anything?

My gut reaction as a reactionary environmentalist is to go with Mastercard.

How can you price a species or an ecosystem?

Of course, you can’t. To suggest that something which is, in all practical senses, irreplaceable can be somehow restored given sufficient cash is – without a doubt – absurd.

So, what is to be made of the renewed interest in natural capital accounting (NCA)?

It does exactly what is says on the tin; assigns a financial value to the use of natural resources and ecosystems.  NCA created a huge buzz recently at Rio + 20 where more than 90 companies and 35 countries signed a declaration agreeing to develop and maintain their own natural capital accounts.

The argument in favour of NCA is compelling. By valuing nature you at least put resources and ecosystems on the balance sheet at something approaching their actual value. Without NCA they would typically be ignored or hugely undervalued. See, for example, Puma’s recent environmental P & L which, according to its CEO Jochen Zeitz led to revolutionary change – including  innovative new product packaging.  

Indeed, we at Best Foot Forward have done our own fair share of NCA using methods such as the Government’s ‘social cost of carbon’ to inform cost benefit analyses. We have, on the whole, found that it offers useful insight and can readily inform risk-based approaches to resource management.

Where does all of this leave poor old Mastercard?

In my view it all boils down to fitness for purpose. Giving stuff a notional price can be useful but also misleading.  Such a measure has limitations, is imperfect and can potentially be misused. It should carry a health warning. In this, it shares much in common with other environmental metrics. Any attempt to model the planet is, by definition, never going to tell the whole story.

I think it was the European Environment Agency which first spoke of the need for a ‘basket’ of environmental indicators to truly reflect the complexities of our relationships with the natural world. Should NCA be given space in the basket? I think so – but it shouldn’t be the only item that you buy.

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