The Worth of the Earth: Does Your Economics Curriculum Know?

The Worth of the Earth: Does Your Economics Curriculum Know?

Earth Day is around the corner, and environmental lessons will take center stage in many science courses. But what about economics? You might be wondering what economics has to do with Earth Day. After all, isn’t consumption—a driver of the economy– harming the environment? That’s the conventional narrative. And it’s often true. But ironically, the economics curriculum itself can help change that. All it has to do is acknowledge and account for the worth of the earth. You might not have thought about it, but nature provides multiple life-sustaining functions.  Plants produce oxygen and absorb carbon, wetlands filter water, and bees pollinate food crops. Together, theses functions are called “ecosystem services.” Ecosystem services are inherently invaluable. But have you ever wondered what they would be worth in monetary terms? The global value of ecosystem services is estimated at $145 trillion per year. That’s almost double the total global economic output of $75.59 trillion. The ecosystem services figure comes from research led by economist Robert Costanza. The purpose of his work is not to commodify nature, but to ensure the true worth of the environment is counted in economic and policy decisions. This is a key principle of the field of ecological economics. Here’s an example: In ‘mainstream’ economics, a forest has no worth until it is cut down and the timber is sold. The services provided by the forest—providing habitats and oxygen, and preventing erosion, just to name a few—don’t figure into accounting systems.  Environmental damage is written off as an “externality” (an outside cost). But what if the value of these services was counted in business decisions? What...