Putting price on nature
Putting price on the ecosystem services means that services offered by nature will be passed from one party to the other on price agreement. The main problem with the pricing concept is that the ecosystem services goes beyond the tangible aspects, a factor that makes it difficult to derive the actual value of the ecosystem. Nature provides essential benefits including food and water. The nature also provides intangible benefits that are psychologically and culturally important to human well-being. The intangible benefits include recreational purposes, tourism, learning, biodiversity and cultural practices.
According to Comberti et al (2015), examining the actual value of nature can be very difficult because of the complexity of coming with an effective and workable formula. Economists argue that nature can be valued just like any other capital investments such as buildings and land. However, the problem is coming up with the right formula to calculate the actual value of nature. It is very difficult to put a monetary value on nature when some of its benefits are indirect.
Pricing the ecosystem does not directly mean that all the services of ecosystem will completely be solved. There are some functions of nature whose market is inaccessible. For example, the market for ecosystem services such as refining of air, soil formation and water purification cannot easily get the buyer. Pricing of ecosystem will only attract buyers who can forecast the future monetary benefits of nature. According to the economic principles, the buyers will only spend their money with return motives. Therefore, pricing of nature does not give the………