For most of the past century, governments and industry have failed to recognize that tropical rainforests are worth much more than the attractive hardwood timber they contain. They failed to take account of the intricate role rainforests play in hydrological, biological, geochemical, and climatological functioning on Earth. Because all the benefits provided by forests cannot be directly measured and captured, the market under-provides for, hence undervalues, rainforests. True economic analysis should take these indirect values and this economic distortion into account.

Companies that destroy the rainforest should be required to make bioeconomic and cost-benefit analysis a mandatory part of their land-survey routine. Genuine bioeconomic analysis will survey all relevant opportunity costs and determine the presence of species with value as pharmaceutical, food, and other products useful to humankind. In addition, bioeconomic analysis can predict the potential for eco-tourism and ideally, make some assessment for the services (like climate stabilization, recreation value, soil protection, and clean water) a forest area provides. By accounting for these benefits it will help guard against the uninformed destruction of species. Globally, ecosystems and the services they provide are estimated to be worth $33 trillion, according to research conducted by Robert Costanza in the 1990s. The biodiversity of tropical rainforests can provide material benefits beyond simple value as forest products. For example, in the late 1970s, Malaysia imported weevils from Cameroon to pollinate oil-palm plantations, in 1981 saving $120 million in labor costs from hand pollination. Finding this cost-saving species was straightforward: weevils are the natural pollinators of oil palm, which originated in the rainforests of Central Africa. Once a bioeconomic analysis is complete, the decision can be made on how to best use the forests; whether to protect them using their sustainable yield or to destroy them for immediate return and accept the long-term effects.

Some environmentalists say that putting a dollar value on the resource is not the proper way to approach conservation, since ecosystems have intrinsic and aesthetic values that transcend economic value. They worry that saying a square kilometer of Malaysian mangrove forest has a value of $300,000 in flood control alone will justify developers offering $310,000 for the land and turning it into a shopping complex. However, it is clear that money is a prime consideration in today's global economy, and putting monetary value on an ecosystem, even if it is undervalued, provides strong a strong and universally understood argument about the value of protecting biodiversity and the ecosystem.

Even cost-benefit analysis often underestimates the value of the species and ecosystem by failing to factor in the unknown benefits. Bioeconomic analysis may be able to valuate rainforest lands by eco-tourism potential, known, and even some unknown products, but it can hardly account for the services that the rainforest ecosystem performs or the value of unknown biodiversity. How much is a stable climate worth? What would a country pay for clean water or navigable waterways? At what cost should global warming and polar ice melt be avoided? How about functioning hydroelectric projects, working fisheries, and avoiding cycles of flood and drought? These are some items on a long list of services which rainforests provide humanity.

Dismantling rainforests for timber, pasture land, pulp for paper, and palm oil is not maximizing their potential yield: it is like smashing an ancient Roman vase to reach the quarter that fell inside. Razing rainforests for just these simple commodities is a colossal waste of their resources.

Review questions:

• Why is economic analysis of ecosystems important?

Continued / Next: Funding and Organization for Rainforest Conservation