The twin crises of climate change and biodiversity loss highlight the failure of our economic systems to properly value nature. While economic decisions often drive societal choices, there is a growing recognition that without healthy natural systems, a healthy global economy is impossible.
Spinifex is an opinion column. If you would like to contribute, contact us to ask for a detailed brief.
This calls for a fundamental shift in how we value nature and consider it in planning decisions. As much as we may try, not all benefits from nature can be monetised – we must find ways to incorporate cultural, spiritual and health benefits alongside economic considerations.
Market-based economies currently only recognise values that can be expressed in monetary terms, but nature’s true value extends beyond monetary measures. Cultural and spiritual connections, alongside proven health benefits, highlight the complex, non-economic value of nature.
Forest bathing is a long practiced activity in Japan that is gaining recognition in Australia and other countries. Dr. Qing Li, in his book Shinrin-Yoku (The Art and Science of Forest-Bathing), describes how regular interaction with forests can provide bene?ts that are measurable. They include lower blood pressure, reduced levels of the stress hormones cortisol and adrenaline, lower blood sugar levels, increased anti-cancer protein production, and improved concentration and memory.
There is growing evidence that – when compared to traditional infrastructure – identifying, measuring and managing natural assets as part of an overall asset management strategy can save capital, reduce operating costs, and mitigate risks from climate-related hazards, such as extreme heat.
Louise Chawla, in the journal People and Nature, provides a detailed review of the research on children’s connection to nature and coping with environmental degradation and species loss. The research con?rmed that direct experience of nature in childhood contributes to an ethos of care for nature across the lifespan of individuals. Emotional connection with nature has the potential to leverage deep societal change towards the respect and care for nature, emphasising the importance of integrating nature into childhood development.
Shifting attitudes and recognising Country
Australia is witnessing a shift in attitudes, with increased acknowledgment of “Countryin urban planning. For over 60,000 years, First Nations People have integrated the concept of Country into their lives. It encompasses everything within nature, including earth, water and sky Country, as well as people, animals, plants and the stories that connect them.
Caring for Country is a cultural obligation that First Nations People undertake with a deep sense of responsibility.
Integrating economic and noneconomic values
To protect nature, we need decision making processes that integrate both economic and noneconomic values. This will require genuine community engagement and collaboration as part of the political and planning processes.
The non economic and economic values associated with nature that are addressed in the following sections of the article, need to be accounted for in an integrated decision-making process to ensure the effective and equitable allocation of funding and other resources so that a nature positive and equitable future is achieved.
Economic approaches to valuing nature
Market based instruments
This approach to valuing nature involves creating legal instruments like credits, certificates, and bonds to monetize natural assets. These instruments are traded in a market to fund projects that protect, restore and maintain healthy natural environments. Key examples include:
- Biodiversity offsets: certificates sold in the market to generate capital for projects that restore biodiversity in one area to offset destruction in another. While aiming for no net loss of biodiversity, this goal is often not met.
- Nature Repair Act 2023: the Act establishes a voluntary market for trading biodiversity certificates linked to registered restoration projects. Certificate holders must implement ecosystem restoration and protection actions over decades to achieve verifiable outcomes. Prices are to be set through voluntary market transactions, with outcome verification being crucial for market integrity.
- Green sovereign bonds: issued by governments, these bonds fund projects that protect, restore and sustainably manage natural
- assets. Guaranteed by the government, they offer low risk investment with annual payments and a final payout after 25 to 50 years.
Asset accounting approach
Natural assets form the green infrastructure of urban areas, including areas of remnant natural vegetation, public open spaces, parks, reserves, street trees, drainage corridors and wetlands, as well as constructed urban landscapes.
Generally managed by local government, these assets are currently undervalued in asset management systems, leading to inadequate funding for their maintenance.
To address this, green infrastructure should be recognised as a distinct asset class with accurate valuation. Implementing best practice guidelines and training will help recognise the value of natural assets.
Natural assets offer environmental services, support community health and provide wildlife habitat and biodiversity. There is growing evidence that – when compared to traditional infrastructure – identifying, measuring and managing natural assets as part of an overall asset management strategy can save capital, reduce operating costs, and mitigate risks from climate related hazards, such as extreme heat.
Over time, the value of natural assets generally increases as trees and other vegetation grows and ecological systems mature. Similarly, biodiversity increases, together with cultural values, and public health bene?ts.
Conclusion
While the growing momentum around the economic valuation of nature offers promise, this must go hand in hand with recognising its non economic values. Only through integrated decision making can we allocate resources effectively, ensuring nature positive and equitable outcomes for current and future generations.
By acknowledging and preserving the full spectrum of nature’s value, we can foster a sustainable future where both people and nature thrive together.
