Geoscience Reference
In-Depth Information
of extinction for many groups will rise from the current rate of extinc-
tion or 0 to 0.2 percent per century to 10-50 percent of species in the
the IPCC concluded that about 25 percent of species on a global scale
will be at high risk of extinction with unchecked climate change. To this
outlook we should add the dangers to marine organisms from ocean
acidifi cation, which are generally not included in these calculations.
5
While these numbers are frightening, I must emphasize that the
estimates are also subject to many qualifi cations, as we will see below.
THE CHALLENGE OF VALUING NONMARKET SERVICES
Oscar Wilde once remarked that a cynic is a man who knows the
price of everything and the value of nothing. This saying has sometimes
been incorrectly applied to economists because they study primarily
market processes—stock prices and interest rates, food and housing—
those areas that can be measured in hard cash.
Before discussing why this stereotype is dead wrong, we must ac-
knowledge that food and housing are not inconsequential. Just ask the
10 million American families who lost their homes during the recent
recession, or the 46 million people on food stamps in 2012. Perhaps
money can't buy happiness, but it can buy food.
Economists have long recognized that people do not live by bread
alone—there is a defi nite value of nonmarket activity. Many things
that people care about are not produced and sold in markets. Some of
these are close to the market, such as home-cooked meals or do-it-
yourself carpentry. Others are intrinsically nonmarket, such as caring
for our families or visiting the Grand Canyon.
To illustrate this point, do the following exercise: Take out a piece of
paper. Write down ten activities that are most precious to you. Then ask
how many of them you can buy at a local store or on the Internet.
Typically, many things of value are not available in markets, and this is
exactly the challenge we confront here because they do not carry mon-
etary price tags.
Understanding the economics of nonmarket activities is impor-
tant because many of the impacts of climate change fall outside the
