The practice of putting a value on ecosystem services – resources and processes that come from or occur in natural ecosystems – is finding a place in the business world.

In a bold move, Dow Chemical has partnered with The Nature Conservancy (TNC) in an effort to add up the ecosystem costs and benefits of every one of its business decisions. Dow hopes to make environmental factors part of its profit-and-loss statements.

"Protecting nature can be a profitable corporate priority and a smart global business strategy," Dow CEO Andrew Liveris said in a TIME article. As further incentive for companies to start considering the ecosystem costs of their business decisions, Goldman Sachs released a report in 2007 showing that companies considered leaders in environmental policies tended to outperform their peers and the general stock market.

A direct example of how preserving natural ecosystems can directly benefit a business’ bottom line is found in a study that was done by scientists from the World Wildlife Fund (WWF).

They looked at a coffee plantation in Costa Rica and found that coffee flowers grown near forests received twice as many bee visits and twice as much pollen as flowers far from the forest, resulting in increased production from those plants. The extra bee pollination was worth $62,000 a year to the farm – a total of 7% of their income. Plowing down the trees to allow for cattle grazing (a common practice in developing countries) would only earn $24,000 a year.

While leaving the forest intact in the above example results in a direct monetary benefit to the business, it also has the benefit of preserving the ecosystem in its natural state. An example of ecosystem preservation for the direct benefit of an entity occurred when New York City bought and protected 70,000 acres of its watershed in the 1990s to avoid the need for a $6 billion treatment plant. An ounce of prevention is worth a pound of cure.

It is true that the valuation of ecosystem services is still being defined. The value of water to a company can be easier to put a price on than something like biodiversity. But Dow’s initial investment in its collaboration with TNC is one that Liveris sees paying off for the company in the future, with the prospect of stronger environmental regulations and limited natural resources. "The economy and the environment are interdependent," says Liveris. And as WWF’s director of conservation science, Taylor Ricketts, succinctly points out, "We only value something when we measure it."

Do you think that ecosystem services are something worth valuing? Do you agree that they can be worth preserving, if not just for their intrinsic value but for their monetary benefits to businesses and society as a whole? Is it a realistic expectation for businesses to do so?

Australia, along with many other countries, is trying to enact a climate policy that decouples economic growth from pollution.  In a country where eighty percent of the electricity is generated by coal-fired power stations, this is a tough task. 

The Australian government is trying to pass a climate policy that would put a price on carbon.  Giving carbon a monetary value presents an incentive to conserve; the end result should be lower greenhouse gas emissions.  The government has failed to pass the climate policy three times in past years.  It will vote on the issue for a fourth time in 2011. 

Opposition to the climate policy is largely fueled by political and business organizations’ fear of higher power and fuel bills.  Demand for the export of Australian coal and gas is also likely to increase in coming years.  According to the Climate Department, “fugitive emissions from coal mines and oil and gas projects, as well as direct fuel combustion emissions from LNG projects, account for almost half of the growth in Australia’s total emissions from 2010 to 2020.”

Climate Change Minister Greg Combet said, “Our economy as it grows is still very closely linked and drives growth in pollution.  The successful economies of the future are going to decouple their pollution growth from their economic growth, and that’s the challenge we’ve got.”

Recent natural disasters in Australia – extreme heat waves and fires blasted the country in 2009 and 2010, followed by flooding in January of 2011 and category 5 cyclone Yasi in February – have left behind a $10 billion disaster bill and lost revenue from export commodities.  After all of that, it seems that maybe now people are ready to start acting.

When do you think the general population will be willing to accept that economic growth cannot continue at the expense of the environment?  Do you think it’s an all or nothing venture or is there a middle ground?  If so, what is it?

On Friday, February 4^th, Southern California’s South Coast Air Quality Management District (AQMD) approved a controversial plan that will allow small businesses and public facilities to receive free clean air credits.  The plan’s goal is to stimulate the economy by allowing small businesses (those that emit less than 4 tons of smog-forming pollutants a year) and public utilities to expand and create new jobs without the financial burden of having to pay for credits. 

Clean air credits are normally sold on the open market, and are created when polluters reduce their emissions or shut down.  Public entities that could benefit from this decision include sewage treatment plants and landfills.  AQMD spokesman Sam Atwood says that the agency’s plan “allows for some growth and at the same time allows us to meet clean-air standards.” 

Opponents of the decision believe that issuing the credits for free, instead of forcing polluters to buy the credits, will result in even more pollution in already smoggy region.  The impact on public health is also concerning for local residents who may be at risk for developing respiratory illnesses such as asthma. 

The Air Quality Management District encompasses all of Orange County and parts of Los Angeles, San Bernardino and Riverside counties – an area that is home to almost 17 million people. 

Do you think this is an acceptable compromise between economic growth and public and environmental health?  Do you have suggestions for other methods to balance economic growth while safeguarding public and environmental health?

For more information on the free emissions credits plan, visit the South California South Coast Air Management District’s website: http://www.aqmd.gov .