How Much Are Environmental Resources Worth? As Much as Development

Back in the early 1990s the U.S. EPA asked an economist at the University of Connecticut to study the economic value of Long Island Sound. The economist, Marilyn Altobello, determined that the businesses the rely on the Sound being clean – fishing, beaches, marinas, etc. – contribute $5.5 billion a year to the economy of Connecticut and New York. That figure has become a permanent part of any debate about the Sound and its future (although Altobello spoke at SoundWaters a few years ago, said she was updating the work, and also said that $5.5 billion was probably low; I haven’t heard if that revision has come out yet). In New Jersey they did something different. Instead of estimating the value of the state’s environmental assets to local businesses, economists tried to value them for what they are – beaches and dunes and wetlands and forests. It turns out the the environment is worth as much as the development industry. Here’s what the Times reports: The researchers analyzed studies of wetlands, forests and other aspects of the environment. They also assessed the cost of providing artificial equivalents of services the natural world provides, like flood protection. The study also considered the costs necessitated by damage to the environment and the price people would be willing to pay for outdoor recreation…. Dr. Costanza and the other researchers concluded that New Jersey’s total natural capital is worth about $18 billion per year. Nature, he says, turns out to be about as economically valuable to New Jersey as the state’s construction industry. Developers on one side are doing studies showing that development brings jobs and economic growth, and municipal officials are eager for anything that could keep property taxes down,” said William J. Mates, a project manager with the Department of Environmental Protection, who worked on the report. He continued: “What’s been lacking on the other side is a quantified picture of natural resources. We can make the case qualitatively till the cows come home, but now we can say, ‘Hey, there are economic losses if we convert farmland to housing.’ ”