<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

What's the environment worth?

Money tree

Credit: iStockphoto

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What value should we put on clean air and water, lush forests and biodiversity? Can we put a dollar value on the environment?

It’s not a bizarre question. Whether you like it or not, it's one that will come up more often, with Australia and the rest of the world moving towards an emissions trading scheme, with carbon likely to become the world’s biggest commodity market and with some companies either likely to make a fortune out of carbon trading, or find themselves lumbered with massive liabilities.

The other point is that if governments are not aware of how valuable a forest, for example, might be to tourism, they are more likely to provide permits for logging and mining companies without any safeguards whatsoever. The same applies to fishing zones and water catchment areas.

As reported here, a recent United Nations report says protecting the environment could deliver trillions of dollars in economic benefits.

According to the report, protecting forests is more efficient than spending millions developing new technologies to capture greenhouse gas emissions and bury them underground. Similarly, protecting fishing areas would ensure food supplies and deliver higher profits. And cities around the world, like Melbourne, Rio de Janeiro, Johannesburg, Tokyo, New York and Jakarta, rely on protected areas for drinking water, saving a lot of money otherwise spent on public treatment plants.

So what are these assets worth? If the UN report is right, the annual contribution of coastal and marine ecosystems to the global economy is worth in excess of $20 trillion. And governments would typically under-value these assets.

That’s why one of the hot jobs of the future will be green accounting. You can find a good summary of it here.

Environmental accounting is about risk management. It’s about collecting and analysing information on material flows and pollution controls for the company's executives. Green accountants will report to investors and regulators and analyse how natural resources are used and how the company's environmental impact is being managed.

At this stage, it's a new area. There are no academic programs focusing on environmental accounting, and there is no professional credential for the specialty. But that could change as business and regulators become more environment-focused.

But as part of that, we need to start developing systems that put a dollar value on the environment.

What’s the environment worth? How do we develop systems that actually measure what clean air and water is worth? Or would you say it’s priceless? Tell us what you think.