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  Letters to The Straits Times, 28 Feb 05
Impossible to put a price on nature

DR EUSTON Quah Teong Ewe highlights the need to assess nature with quantifiable tools ('Economy v environment: Let's talk dollars and sense'; ST, Jan 31).

However, attempts to place a dollar value on a habitat are fraught with subjectivity. It is also dangerously reductionist to seek to subsume the worth of complex and irreplaceable systems in a monetary scheme of value.

Economic assessments of nature that rely solely on 'marketised' notions of value overlook two vital concepts: externalities (where consumption of a good entails gains or losses not factored into its price) and public goods.

There is a pressing need for rigorous study of positive externalities generated by intact ecosystems, as well as negative externalities their loss may incur. Possible links include fishery losses from degraded mangroves and reefs; the role of dense tree cover in mitigating ambient temperature and improving air quality and health; and the psychological significance of retaining natural areas (for example, lowering stress, sense of belonging and family-bonding activities).

Are the shrinking green niches of Singapore also a substantial factor in the minds of 'quitters' who seek lands with more open space and less manicured parkland? What will the cost be to Singaporeans who may one day have to fly farther afield for respite from the endless towers of development?

Economic development and the preservation of natural spaces should not be a zero-sum game. As conservationist Ria Tan has remarked, where else can one find rainforests, mangroves and rich coral reefs within 20 minutes of each other? Many tourists come from lands where biodiversity is prized. But not every traveller is able to traverse Sarawak's jungles. Why not pitch Singapore's reserves and waters as a safe stopover where less able visitors can enjoy a morning walk through a mangrove or rainforest, with time for afternoon tea at Raffles?

Public goods such as street lighting, defence, basic education and health care are supplied by the state, as private provision is hindered by the free-rider syndrome. That is, the good benefits everyone, so there is no incentive for a rational individual to pay for what he can enjoy for free, thanks to a less calculative person.

Nature areas share this feature, with the tremendous and underestimated externalities associated with their existence or demise. Rigid econometric models are likely to underrate nature's true utility as well as ignore the unquantifiable human values accorded to the sustaining of native biological diversity. Human welfare is linked to nature's health, and 'development' does not have to be at nature's expense.

Cost-benefit analyses can help gauge the utility of a choice, but using too narrow a definition of value is likely to result in decisions that sacrifice long-term well-being for more immediate (and not necessarily sustainable) gains.

Besides, should this approach be prescribed universally? Whether to marry, have children or pursue a hobby? Should we seek to assign a price to everything, and so forget the value of it all?

Marcus Ng Fu Chuan
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