GreenBiz recently ran an article on the potential pitfalls of putting a price on nature. It’s often argued that assigning a cash value to nature undermines the intrinsic value of the natural world and the multitude of resources and benefits it provides, turning it into a “subsidiary of the corporate economy.”
On the other hand, assigning a value to different aspects of the natural world (imperfect though they may be) also has the potential to help ensure main stream economic policies do a better job of accounting for nature. The question becomes, as the article puts it, “If we say that nature is priceless, do we end up in effect treating it as valueless? Or is being unwilling to price nature the best protection we have against it being packaged up, owned, bought, sold or used up?”
The social costs associated with the built environment are related to this. These are the costs associated with construction, renovation, building operations and demolition that impact the quality of the “natural” environment (including impacts on climate change), the availability of natural resources in the short and long term, and the productivity, health and happiness of building occupants as well as the general population.
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Assigning a value to such items typically doesn’t capture their full intrinsic value – it’s difficult to fully quantify the positive emotional impact that views of the natural world have on building occupants and how that translates into increases in productivity. Or the full range of individual physical and psychological benefits that result from bike friendly policies and infrastructure, and how those translate into longer term societal benefits, such as reductions in healthcare costs. Or the long term impacts that building greenhouse gas emissions (relative to climate change) have on such things as agricultural productivity and flooding.
But providing such estimates and incorporating them within life cycle cost analyses have the potential to lengthen the timeframe from a 2 to 10-year simple payback, to potentially generational or longer in nature. And it helps expand the focus from just a narrow set of costs/benefits, such as shareholder profits, annual organizational operating costs or market capture, to also include such things as employee health and well-being, as well as carbon footprint reductions.
For example, the Forte Building Science division of M.E. GROUP has developed an Occupant Impact Estimation Tool for estimating the impacts that different aspects of indoor environmental quality have on occupant productivity and health. We did this using a great deal of previously conducted research on the impacts of various aspects of the built environment on productivity and health, combined with the knowledge gained from our own master planning, post occupancy evaluation (POE) and retro commissioning case studies.
We use this tool to help expand the focus of the decision making process during planning and design to include impacts on the building occupant (and potentially society as a whole) in addition to the more traditional considerations of initial construction costs and building operational costs. Recently this helped us convince the design team and the building owner of a new bank corporate headquarters to require a ventilation rate at least 30% above the minimum required by ASHRAE 62.1.
Our estimation of the improvements this would have on employee cognitive functions, based on recent research conducted by the Harvard T.H. Chan School of Public Health, SUNY Upstate Medical University and Syracuse University that we incorporated into our tool, was worth the small increase to the building’s operational costs that the ventilation increase would have. The story grew to include employee productivity and health – the positive impacts this would have on the owner’s bottom line as well as employee health and well-being. You can find additional examples of this in some of my previous posts, as well as at An Anthropologist in Engineer’s Clothing.
Looking at this from an evolutionary perspective, part of the reason this expansion in focus occurs is because the process of accounting for these social costs of the built environment or assigning value to aspects of the natural world, helps shift the level that evolutionary forces are primarily acting on from the individual or small group (i.e., corporate entity, or just their shareholders) to the larger group (employees, community, nation or species as a whole). In the former case, shorter time frames dominate the decision making process but in the latter, the longer time frames associated with realizing the benefits being discussed receive greater weight.
Research has also shown the more people involved in a decision making process (even indirectly), the less likely short term, localized costs/benefits will dominate the process at the expense of longer term, much broader formulations of costs/benefits. Further, treating natural capital as common pool resources, common to the group you want the benefits shared among, offers an opportunity to manage those resources for the longer term benefit of the group. David Sloan Wilson, Elinor Ostrom and Michael E. Cox have previously provided an overview of eight design principles, rooted in foundational evolutionary principles and applicable to a wide range of groups and situations, for effectively managing such common pool resources.
For more in depth discussions of evolutionary theory relative to business and economics, I recommend the Business and Economic sections of the This View of Life magazine, as well as Evonomics and Prosocial. I’ve also discussed much of the above discussion in more detail in the following posts:
- The Built Environment’s Social Costs, Part 1: Quantifying Productivity, Health and Larger Societal Costs
- The Built Environment’s Social Costs, Part 2: The “Shortsightedness” of Homo Sapiens
- The Built Environment’s Social Costs, Part 3: Managing Common Pool Resources and the City Energy Project
- Why do We Decide to Build Sustainably?
So yes, assigning a dollar value to aspects of nature and the social costs of the built environment can be controversial and limited in its ability to capture the relevant intrinsic values. But embedding the process within a solid evolutionary framework and involving multiple voices and perspectives in the process of assigning those values, will help ensure that natural capital and the built environment’s social costs/benefits aren’t treated as merely “subsidiaries of the corporate economy.”
Originally published here.
2016 July 18