In the United States, where conservatives do, skepticism remains about including environmental considerations in economic and financial decision-making disparaged investment guidelines that prioritize a company’s environmental, social and governance performance. The social price of carbon, another measurement tool for assessing the economic impact of regulations through their effect on carbon emissions, was set close to zero it was significantly increased during the Trump administration and under President Biden.
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Benjamin Zycher, a senior fellow at the right-leaning American Enterprise Institute, expressed concern Thursday that the new approach would introduce a degree of subjectivity.
“I think there’s a real danger that if they’re actually trying to put environmental quality values into the national accounts, there’s no direct way to do it and it’s impossible for it not to be politicized,” said Dr. Zycher in an interview. “It will be a process deeply fraught with problems and dubious interpretations.”
However, few economic statistics perfectly depict reality, and all need to be refined to be consistent and comparable over time. Measuring the value of nature is inherently complex as there is often no market price to consult, but other sources of information can be equally informative. The Bureau of Economic Analysis has undertaken other efforts to measure the value of services that are never sold, such as housework.
“This is exactly why we need this kind of strategy,” said Nathaniel Keohane, president of the Center for Climate and Energy Solutions, a research and advocacy group. “To really develop the data that we need to make it not subjective and to make sure that we really put the same quality control and focus on integrity that we have in other areas of economic statistics.”
The strategy does not pretend to cover every aspect of nature’s value, nor does it address environmental justice issues simply by fully incorporating nature’s contribution, particularly for indigenous communities. Those concerns, said Rachelle Gould, associate professor of environmental studies at the University of Vermont, will have to be prioritized separately.
“There are many other ways nature matters that can’t be quantified,” said Dr. Gould. “He’s reasonably cautious about what might be possible.”