Putting a price on polar bears

Ottawa is using a controversial method to find out what its bear population is worth.

Is a polar bear worth more dead or alive? The federal government is prepared to pay $44,000 (plus tax) to find out. Environment Canada recently put out a tender seeking a consultant or academic to study the species’ socio-economic value for eight weeks and prepare a report. “We’re not really putting a price tag on polar bears,” explains Mary Taylor, director of conservation service delivery and permitting. Rather, Environment Minister Jim Prentice will consult the report next spring when deciding whether to list it as a “species of special concern” under the Species at Risk Act. Among other things, the department wants to know how the species’ value changes as its population and habitat dwindles.

Such questions are of particular interest in Canada, home to at least half of the world’s remaining 25,000 or so polar bears. But how to answer them? Environment Canada demands bidders use something called the “Total Economic Value” method, which looks beyond market prices in appraising natural resources. Despite the department’s protestations, this study will likely ascribe highly specific monetary values to the world’s largest land carnivore. Environment Canada even names specific metrics in its tender, including “value per additional unit of polar bear” and “value per additional hectare of habitat.” Previous TEV studies have arrived at strikingly precise figures: one, for example, found a mangrove in Sri Lanka provided services worth US$1,088 per hectare per year.

Dedicated free marketeers might claim a polar bear is worth only as much as someone is willing to pay for the pleasure of putting a bullet between its eyes. But according to TEV, that’s only a component in the species’ “direct use” value, which is relatively straightforward to calculate. Untanned pelts have been known to sell at between $500 and $3,000, and guided hunts can run $20,000.

But where markets fall silent, TEV presses on. It attempts to calculate the value of “indirect use” — which includes water purification and other services performed by ecosystems. One way to do that is to tally the cost of providing those services using existing technology. “Because we get nature’s services for free, we tend to use them wastefully — much like a tenant who doesn’t pay for electricity leaves the lights on,” Stewart Elgie, a University of Ottawa professor, said.

So-called “non-use” value is trickier still. Environment Canada wants to know the so-called “existence value” of polar bears. That’s the pure satisfaction of knowing they still walk the ice floes and are protected from extinction. There’s also “bequest value,” the benefits associated with leaving a resource for future generations. (One TEV study estimated the combined “existence, bequest and experience” value of each African elephant at more than US$4,400.) Environment Canada says the polar bear study will be the largest TEV study it has done, and while environmental economists vigorously debate how such studies should be conducted, Ottawa is under pressure to conduct more of them.