How much is land really worth? What about wind? Sunlight? How can we value the natural resources that we access every day?
It has been said that “everything is worth what someone is willing to pay for it. So how much would a person pay for a sunny day? The answer is that it depends on how long they have gone without one. (American Indians have a saying which encapsulates this problem succinctly: “Only when the last fish has been caught will the white man realise that he can’t eat money”.)
If the world progressed to a point that pollution covered the globe, then people would be willing to pay a high price to live in a place where there was still access to the sun. The problem is that people do not realise that all resources, even something as pervasive as sunlight, should be treated as scarce. Failing to do so has caused some of the problems that we experience in the world today.
For example, no one is able to claim ownership of the Yarra River. As a result, over time the river has variously been used as Melbourne’s main source of fresh water, as a dumping ground for waste products associated with manufacturing, and as an outlet for sewerage. Millions of litres of untreated sewerage are still sent into Port Phillip Bay every year because of the same situation – no one owns it, and as such there is no financial charge associated with using the bay in this way. The question then becomes, how much would you pay to ensure that Victorian rivers and the bay are kept clean? And would you be willing to meet that cost if it increased, and you had to pay more to have the plumbing services to your house structured so that the sewerage did not find its way into the bay?
Over time, the government has slowly taken control of the natural resources that are within our borders. This is because leaving them to individuals or businesses was seen as a way of ensuring that they would not survive for future generations. However, in making this choice the government is also saying that either it is impossible to place a value on these things, or that people would not be willing to pay the true cost associated with maintaining them.
Their argument seems to be a strong one. Almost every Victorian home has access to so called “green energy”. Energy generation is generally one of the most environmentally damaging activities; fossil fuels such as coal are burned, and this creates millions of tonnes of greenhouse gases every year. Clean energy sources such as wind power, solar power and geo-thermal power can all be accessed, but they cost more. The cost of these energy sources represents a better estimate of the true cost of having both energy for your home and a clean environment. The problem is that even though these options are available, very few people have decided to use green energy. People don’t seem to be willing to pay this extra cost.
