Joe Roman

When the Endangered Species Act was passed, in 1973, traditional economics, which looked to self-interest and endless growth as the predominant drivers of the economy, was pretty much the only game in town.

But several developments in economics and epidemiology show just how dependent we are on biodiversity for our well-being. Such studies are part of a new economic paradigm.

There are now alternative measures of economic health and well-being that incorporate nature into the economy. Wetlands and reefs protect communities from storms. Wild habitats, including those set aside for rare and endangered species, provide clean air and fresh water and regulate the climate—all for free.

Whereas many seventeenth and eighteenth century thinkers, from Linnaeus to Adam Smith, saw economic relationships as a reflection of the natural world, to the Victorians of the nineteenth century and to neoclassical economists of the twentieth century, the economy became a product and symbol of human deliberation, divorced from nature, denaturalized. Ecology sat on the bench for more than a century, while economists battled on the playing field.

A few rogue economists, including Nicholas Georgescu-Roegen and Herman Daly, emerged in the 1970s and ’80s. They pointed to the limits of economic growth. The economy couldn’t expand beyond the laws of thermodynamics or the ecological carrying capacity of the earth.

When he was an economist at the World Bank, Herman Daly drew a big circle around the economy and labeled it ecosystem to make it clear that the inputs taken from the natural world became the outputs returned to it as pollution.

Daly called this early attempt to get beyond the idea of endless economic growth “steady state.” In short: don’t use resources faster than they can be replenished; don’t emit waste faster than it can be absorbed.

The World Bank wasn’t ready for it. Even though the 1992 report Daly was working on was dedicated to sustainable development, his diagram was dropped from it.

These ideas have become part of the emergent school of ecological economics.

One of the branches of ecological economics attempts to value the benefits of nature.

You can call those benefits nature’s services, natural capital, or ecosystem services. Economists, ecologists, and conservation biologists have been trying these terms out for years to see what sticks with the public.

Whatever it’s called, this is capital.

This capital can be cultural: a bison on an old Sioux hunting ground, a bald eagle flying over the Potomac, a wolf pack in Yellowstone. It can be recreational, ranging from whale watching to a hike out your back door. In Yellowstone, one study found that wolves are now a $35-million-a-year tourist industry. In fact, Americans spend more than $120 billion a year hunting, fishing, and wildlife watching. That’s more than the Super Bowl. It’s more than professional football. It’s more than was spent on all spectator sports, amusement parks, casinos, bowling alleys, and ski slopes combined. And it’s much more than just tourism.

When you protect dunes for endangered mice, you also protect the homes behind them from storms and erosion. There are tradeoffs in all our policy decisions, of course, but endangered species should be seen as sentinels for a healthy environment and their protection can help all of us.

Natural capital can even save lives—ecosystems provided a new drug for breast cancer, thanks to the Pacific yew— and restructure the tree of life. A heat-loving bacterium discovered in Yellowstone catalyzed the molecular revolution and helped decode the human genome.