http://www.nature.com/nature/journal/v465/n7301/full/465985b.html
Nature 465, 985-986 (24 June 2010) doi:10.1038/465985b
Published online 23 June 2010
On 14 June, BP promised to put US$20 billion into an escrow account to pay for damage caused by the 22 April sinking of its Deepwater Horizon drilling platform off the coast of Louisiana – an event that has left a geyser of crude oil gushing into the Gulf of Mexico for two months, at a rate currently estimated as high as 60,000 barrels (9.5 million litres) a day. The beneficiaries of this fund are expected to be fishermen, hoteliers, charter-boat operators and other Gulf-coast business owners who have lost income, as well as states and other entities with clean-up costs.
Left unclear, however, is whether payment will ever be made for the loss of ‘ecosystem services’ that benefit everyone but are owned by no one. One such service is the carbon sequestration provided by marsh plants and ocean plankton. How will BP make good the value lost if the oil kills enough of them to hasten climate change? Another service is the buffering that coastal marshes provide to nearby communities from the Gulf’s many hurricanes. Who pays if the oil destroys the marshes entirely?
The 1989 Exxon Valdez oil spill in Alaska raised similar questions, and sparked a flurry of research in the once-obscure discipline of ecological economics, which seeks to estimate quantities such as the ‘replacement cost’ of an ecosystem – or even an individual organism. (Killer whales cost $300,000 at the time; cormorants were a bargain at $310 apiece.) The Gulf oil spill seems likely to inspire another surge of research in this field. Indeed, ecological economist Robert Costanza at the University of Vermont in Burlington has already estimated a $34-billion to $670-billion price tag for the loss of Gulf ecosystem services.
Costanza also has a suggestion for how to avoid such harm in the future: force companies that want to drill, dig or otherwise extract resources to take a more serious account of environmental risks before they start. He and his colleagues have argued that the best way to do this is to demand that each company put up an “assurance bond”: a sum of money large enough to rectify damages if things go wrong (see http://go.nature.com/styAyz). The amount of the bond would be set by an independent government agency or government-chartered body, and be based on the total value of the ecosystems at risk. In BP’s case, Constanza says, the company would have had to put up something like $50 billion to get permission to drill in the Gulf, or about two to three times the $20 billion they are having to pay now. The very size of that bond, in turn, might have made the company more likely to invest, say, $500,000 in a functional blowout preventer.
Other experts favour a variant of this idea in which large, risky enterprises would be required to carry insurance against ecosystem services claims – an approach that would essentially put the insurance companies in charge of policing safety practices.
These and other variants seem well worth exploring as a way to bring ownerless ecosystem services into the marketplace. Congress and the US administration should take the idea seriously. But the science behind putting a price on nature must also improve.
After all, any attempt to extract a multi-billion-dollar compensation for ecosystem damage seems likely to wind up in court. So scientists’ cost estimates will have to be sound enough to convince judges and juries, not just make for an interesting journal article.
Such an increase in rigour is hardly bad news for research. If ecosystems services science gets a boost from the spill, that may be one of the few silver linings to the dark plume that continues to gush in the Gulf of Mexico.
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Comments
1. 2010-06-23 03:15 AM
2. Report this comment #11363
3. Anurag Chaurasia said:
4. Any damage done to environment is priceless. Money can not return a life to any living creature. We should inculcate this priceless feeling for environment in each one of us. Oil spill culprit should be put behind the bar instead of asking for monetry compensation in order to minimize such accidents in the future. If accident is becouse of nonhuman factor certainly then editor idea of ecological economics is very promising.
Anurag chaurasia,ICAR,India,anurag@nbaim.org,anurag_vns1@yahoo.co.in,+919452196686(M)
5. 2010-06-23 08:44 AM
6. Report this comment #11369
7. David Julian said:
8. Environmentalists have long been arguing that ecosystem services needed to be accounted for. Its a pity that it required such a visible disaster to make this flaw in our economic system apparent. Remember also that Nigeria, and other countries, have been suffering at the hands of the oil industry for decades, with massive quantities of oil destroying ecosystems there, largely beyond the scrutiny of all but those directly impacted by it. Yet these cumulative attacks on the ecosystem have a global impact, in terms of loss of biodivesity (essential for healthy ecosystem function), impacts of the carbon budget and other natural systems. Just because an ecological disaster occurs in a rich western country does not mean it has a greater ecological impact that those that occur under the radar, in poorer countries with less regulation and less scrutiny. Ecosystems needed to be valued globally and the difficulty is building a global monitoring and regulatory frame work.
Special thanks to Richard Charter