Our Environment - Mining and the Environment: From Ore to Metal - page 326

this is because the importance of ecosystem processes is not traditionally captured in finan-
cial markets. Partly also this is because many costs associated with changes in levels of eco-
system functions may take some time to become apparent or may be apparent only at some
geographical distance from where the change occurred. Partly again, this may be because
some changes involve thresholds or changes in stability that are difficult to measure. This
further hinders the assessment of the real and complete value of an ecosystem and its serv-
ices. Finally, this is because private and social values of conserving biodiversity and eco-
system services often differ widely. The private use value of biodiversity and ecosystem
services will typically ignore the external benefits of conservation that accrue to society in
general. Consequently, if private decision-makers such as mining companies are not given
the incentive to value the larger social benefits of conservation, their decisions will often
result in inadequate conservation. To summarize, while we routinely measure ecological
direct use values, the economic value of most supporting, cultural, and regulating values
are rarely considered. Consequently, many decisions continue to be made in the absence
of a detailed analysis of the full costs, risks, and benefits resulting from associated changes
within ecosystems.
Economists trace the underlying problem of missing full costs and benefits to something
called market failure - the failure of markets to reflect the full or true cost of goods or
services. The calculation of the economic value of mining does not, in most cases, include
environmental costs such as reduced water quality, loss of biodiversity, or loss of option
values because these values and services do not have readily available dollar values such
as those available for minerals. In fact, ecosystem services are provided for free - they do
not need to be purchased. Only when these services are lost, are actual monetary costs
incurred. Paradoxically, the zero price for nature services is of very high value to society.
Various factors contribute to market failure when it comes to the environment.

While we routinely measure
ecological direct use values,
the economic value of most
supporting, cultural, and
regulating values are rarely
considered.

Paradoxically, the zero price for
nature services is of very high
value to society.

Distribution of Benefits between Owners and Non-owners

Stating that ecosystems are valuable begs the question 'Valuable to whom?' The benefits
provided by a given ecosystem often fall unequally across different groups and so do the
costs of resource development. Ecosystem uses which seem highly valuable to one group
(e.g. mineral use directly benefiting mining company and host government), may cause
losses to another (e.g. host communities that need to be relocated to allow mine access).
Answering the question about the economic value of an ecosystem from the aggregate
perspective of all groups would thus give very different answers to answering it from the
perspective of a particular group. The mining company upholds the economic value of the
ore body and the development right. Anti-mining advocacies uphold the property rights
of host communities and the intrinsic values of ecosystems.
There is yet another consideration. Unlike most assets, an area supporting a valuable
ecosystem may deliver more benefits to society than to individual land owners. Individual
owners may receive only a small proportion of benefits, and therefore will tend to under-
value these benefits. A case in point is carbon sequestration, a benefit for the entire world
population rather than an exclusive benefit for owners of forest land. In fact, individual
owners may even feel economically penalized for preserving the ecosystem for the good
of society and may see more immediate value in developing land, for which society as a
whole will bear most of the costs in terms of lost benefits. Since it is difficult for an indi-
vidual owner to receive direct monetary benefit for those benefits which nature provides
to others, the true value of such benefits is generally not taken into account in land use
decisions.

The benefi ts provided by a given
ecosystem often fall unequally
across different groups and
so do the costs of resource
development.