What price a butterfly?

Butterfly Dance

The existence of nature has always vexed developers and transport planners. Desmoulin's whorl snail famously held up the Newbury by-pass, and the massive extra costs of moving protected species has often thrown a monkey wrench into the digger (to mix metaphors). But now a solution for developers may be on the horizon.

Defra have created a process whereby they can assign a figure on nature's existence. From now on all you need do to build an airport is show that you'll get more 'value' from the airport than that provided by the creatures you destroy to build it.

This is all done using transport appraisal - perhaps the most boring subject to appear on this website so far. Appraisal is the magic process by which economists legitimise building airports, roads and other infrastructure. 'Experts' work out the value provided by the new airport, weigh that up against any possible negative impacts and give it their seal of approval. 95% of all transport projects processed through the appraisal process get the rubber stamp of 'value for money'. Why?

Well, economists normally work very hard ascribing big benefits to the result of building the airport but don't spend much time working out what the possible costs might be. An early precursor of this 'cost-benefit analysis' approach was the 1971 Roskill Commission into London's third airport. This infamous report put massive benefits on time-savings to rich air passengers, but placed minute figures on potential costs. Roskill researchers, for instance, valued the cost of demolishing a 1000 year old church to make way for an aircraft hangar by using the church's fire insurance figure of £10,000.

This reductionist approach of the economists – applying a monetary value to every cost and benefit - was undertaken on the basis of a fundamental of economics: that the rational decision, informed by 'perfect information', will maximise utility (or 'goodness') for society.

The problems of this approach is plain. 'Perfect information' will never exist and therefore decisions on, say, the cost of the life of a butterfly, are inevitably subjective. The economist thought up values for noise, for CO2 emissions (this one's really dodgy) and for air pollutants. But those butterflies still proved a problem for the bean counters.

So we return to the clever people at Defra and their value of the natural environment. For Defra, ecosystems are rationalized as "services provided by the natural environment that benefit people". Forgiving the ultimately anthropocentric approach, these 'services' consist "regulation of the climate, the purification of air and water, flood protection, soil formation and nutrient cycling".

Surely, for economists, this monopolisation of the 'natural environment services' market by 'nature' is a classic market failure?

By opening up the market for such 'services' we can ensure that competitive pricing is achieved on the benefits achieved from air purity, clean water and nutrient cycling? Why won't those worms see what a marketable opportunity they're onto and list themselves on the open market?

Economists, eh? They must be nuts.