Wednesday, October 8, 2014

Economic Value

When looking at values of nature, one that seems obvious in our globalized economy is the economic power of nature, or simply the monetary value we can extract from our natural places. How does one value a tropical rain forest or put a price tag on a 100 mile-long stretch of coral reef? Cost-Benefit analysis. Simply put, cost-benefit analysis puts economic values on four aspects of the environment and addresses its values and whether it makes more economic sense to keep that wild area the way it is, or to develop it into a more profitable venture. Breaking down this model, we are left with four components; direct use value, indirect use value, optional value, existence value. Direct use value tends to be the heavy hand when these four factors are added up, and tends to favor the cornucopian ideas of developing the environment into profit and sacrificing preservation. India faces this value equation everyday as it brings itself into industrialization. Most of India is not developed and relies on farming as a mean to survive with roughly a quarter of the population being cultivators of the land with over half of the population working in agriculture. 


This is both good and bad for the environment. On the positive, people are invested in their surroundings. They must take care of the land so it takes care of them. This reverts back to the indirect value and the optional value. However, the direct value is the most important. The value of farmland exceeds the value of unproductive wild areas. Tigers killing livestock is not beneficial for the farmer so the former are removed for economic purposes leaving a species to the brink of extinction in less than a century. If the values, such as existence value of tigers, are not weighed more heavily than the equation may just become direct value equals the total economic value since none of the others would exist. 

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