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Putting a Price on Polar Bears

Polar Bears Stephanie Jue McCombs TexasHow much would you pay to save a polar bear? A thousand dollars? A million? According to experts, each polar bear is valued between $27,000 and $13 million, but how was that dollar value determined? Business, Government and Society lecturer Stephanie Jue says the answer is far from simple. Jue’s research applies economic theory to the environment to determine not only the monetary value of nature, but human impact on ecosystems. Jue discussed the process of valuating plant and animal life and the importance of recognizing and honoring that value with students as part of the Undergraduate Business Council’s Faculty Research Series last month.

According to the U.S. Fish and Wildlife Services’ Endangered Species Program, there are 448 endangered animal species in the United States, and 559 outside of the United States. An additional 227 species are classified as “threatened.” That all adds up to a total of 1,234 animal species in need of recovery worldwide. According to the International Union for the Conservation of Nature, 22 percent of plant life is endangered.

“Species will die and new species will come to life without our input, but we feel guilty,” Jue said. “If we’re killing them off, whether intentionally or not, we’re the only ones that can think about that, and consider that, and do something to counteract that. We know that there is some intrinsic value to having these animals out there in the world.”

That intrinsic value is determined in part by considering true cost economics. “True cost” refers to the negative costs of an object and is difficult to ascertain. The true cost of a bottle of water, for example, includes the costs associated with water filtration and the creation and disposal of the plastic bottle.

“True value” refers to the positive aspects associated with an object. It’s equally difficult to ascertain. For example, the honeybee pollinates one-third of American food crops, valued at about $15 billion. The true value of the bee could be determined by subtracting the outside costs associated with those crops, such as chemicals, water, and labor. However, the value also includes the service that the bee provides, the pollination, and how much it would cost to replicate that service.

Polar Bears Stephanie Jue McCombs Texas

“There are so many variables that factor into this,” Jue said. “It isn’t simple at all. If you look at it from Mother Nature’s perspective, everything is priceless, and necessary, and valuable. But we have to look at it from the reality of how humans value things, and we value things based on whether or not they do something for us.”

Undervaluing what nature does can have dire consequences. To demonstrate this, Jue discussed the history of the gray wolves of Yellowstone National Park. In the early 1900s, the wolves were systematically removed from the park. With no predators, elk population multiplied, feeding on saplings and other small bushes. As the new trees disappeared, the songbirds disappeared. Beavers could not build dams and disappeared, and the aquatic life that thrived in the small ponds and streams created by those dams also disappeared. The wolves were reintroduced with the Endangered Species Act of 1973, and the unnatural changes began to slowly reverse. Today, more than $50,000 per year is spent to monitor the wolves at Yellowstone.

“Humans made the decision to get rid of the wolves because they didn’t have any value,” Jue said. “After a couple of decades of no wolves, we saw what their real value was. That gives us an indication of what can happen when we misvalue parts of nature.”

It all comes back to the polar bear. Jue said the value of every single species may never be fully determined, nor will the effect that humans have on the planet. However, Jue reminded students that by adopting environmentally friendly habits, they can help remedy any harm caused by human impact.

“The ecosystems as they are, without human interference, run perfectly,” Jue said. “If you look at history and human interference with the environment, we tend to trash everything. That’s unfortunate, but we have the capacity to try and change that and have less of an impact and reverse some of the damages that we’ve caused.”

Reposted from McCombs Today