By Lambert Strether of Corrente
Which of you, if your son asks for bread, will give him a stone? Or if he asks for a fish, will give him a snake? –Matt 7:9-10
Readers familiar with Betteridge’s Law need read no further! For those still reading: Today’s perambulation into the biosphere will be even more of a high-wire act than usual: Normally, I know nothing of the topic before beginning my research. Today, although we have had occasion to write on soil before (see here, here, here, and here) that which I do not know today involves both ecology and economics. I hope readers will be kind and suggest more sources I should look at (particularly around the concept of “ecosystem services,” which I’ve been muttering about for some time).
We linked to this article from Quanta — “A Soil-Science Revolution Upends Plans to Fight Climate Change” — back on 7/28. I will begin by quoting great slabs of it to make its thesis clear, or at least those parts of the thesis necessary for a pivot to the question in the headline. (As a spoiler alert, it seems to be that only the most sociopathic of market makers — “an undertaking of great advantage, but nobody to know what it is” — will attempt to price goods whose nature is not known. If the Quanta article is correct, carbon markets, and markets for ecosystem services generally, will have turned out to be such markets made by such makers).
First, let’s look at the Quanta article (and kudos to Quanta for finally producing an article I can extract from):
[Carbon sequestration] plans depend critically on the existence of large, stable, carbon-rich molecules that can last hundreds or thousands of years underground. Such molecules, collectively called humus, have long been a keystone of soil science; major agricultural practices and sophisticated climate models are built on them…. But over the past 10 years or so, soil science has undergone a quiet revolution, akin to what would happen if, in physics, relativity or quantum mechanics were overthrown. Except in this case, almost nobody has heard about it…. A new generation of soil studies powered by modern microscopes and imaging technologies has revealed that whatever humus is, it is not the long-lasting substance scientists believed it to be. Soil researchers have concluded that even the largest, most complex molecules can be quickly devoured by soil’s abundant and voracious microbes. The magic molecule you can just [sequester and] stick in the soil and expect to stay there may not exist.
“I have The Nature and Properties of Soils in front of me — the standard textbook,” said Gregg Sanford, a soil researcher at the University of Wisconsin, Madison. “The theory of soil organic carbon accumulation that’s in that textbook has been proven mostly false … and we’re still teaching it.”
Note the similarity to the long-taught droplet paradigm as applied to Covid transmission, slain or at least severely wounded by a new paradigm produced by the aerosol thought collective (Wired, “The 60-Year-Old Scientific Screwup That Helped Covid Kill“). I find such paradigm shifts encouraging; to me, they’re a sign that science is “popping,” as William Gibson has it. Back to soil:
[B]y the mid-20th century, the humus paradigm was “the only game in town,” said Johannes Lehmann, a soil scientist at Cornell University. Farmers were instructed to adopt practices that were supposed to build humus. Indeed, the existence of humus is probably one of the few soil science facts that many non-scientists could recite.
What helped break humus’s hold on soil science was physics. In the second half of the 20th century, powerful new microscopes and techniques such as nuclear magnetic resonance and X-ray spectroscopy allowed soil scientists for the first time to peer directly into soil and see what was there, rather than pull things out and then look at them.
What they found — or, more specifically, what they didn’t find — was shocking: there were few or no long “recalcitrant” carbon molecules — the kind that don’t break down. Almost everything seemed to be small and, in principle, digestible.
“,” said Jennifer Pett-Ridge, a soil scientist at Lawrence Livermore National Laboratory. “.”
Lehmann, whose studies using advanced microscopy and spectroscopy were among the first to reveal the absence of humus, has become the concept’s debunker-in-chief. A 2015 Nature paper he co-authored states that “the available evidence does not support the formation of large-molecular-size and persistent ‘humic substances’ in soils.” In 2019, he gave a talk with a slide containing a mock death announcement for “our friend, the concept of Humus.”
Over the past decade or so, most soil scientists have come to accept this view. Yes, soil is enormously varied. And it contains a lot of carbon. But there’s no carbon in soil that can’t, in principle, be broken down by microorganisms and released into the atmosphere. The latest edition of The Nature and Properties of Soils, published in 2016, cites Lehmann’s 2015 paper and acknowledges that “our understanding of the nature and genesis of soil humus has advanced greatly since the turn of the century, requiring that some long-accepted concepts be revised or abandoned.”
Old ideas, however, can be very recalcitrant. Few outside the field of soil science have heard of humus’s demise.
Including people who own capital, and those in the political class who service them:
Beyond the Salk project, momentum and money are flowing toward other climate projects that would rely on long-term carbon sequestration and storage in soils. In an April speech to Congress, for example, President Biden suggested paying farmers to plant cover crops, which are grown not for harvest but to nurture the soil in between plantings of cash crops. Evidence suggests that when cover crop roots break down, some of their carbon stays in the soil — although as with suberin, how long it lasts is an open question.
Now, it looks to me like the author of the Quanta article may have gotten some pushback:
It does mean that scientists don't fully understand *how* and *why* some carbon persists long term. Some people in the soil/climate/ag world feel there's still enough knowledge to support certain carbon-sequestering practices. Others want more certainty and understanding.
— Gabriel Popkin (@GabrielPopkin) July 30, 2021
To me, the key point is that we had soil all wrong and for many years. We did not know what soil was. We thought humus was a thing. It wasn’t. It was as if we thought we were doing astronomy, when in fact we were doing astrology. And — to pivot toward the second part of this post, the economics part — the value of an astrological chart is very different from the value of a star chart. Especially if you’re on the bridge of a spaceship called Earth.
Now let’s turn to the other thing I don’t understand, economics. I’m going to take it as read that the concept of “ecosystem services” was devised so that the biosphere could be commoditized and sold for a price. But how is the price to be determined? The seminal article on pricing and ecosytem services (at least according to Wikipedia, sorry) is from 2002. I’ll quote a great slab from Stephen C. Farber, Robert Costanza, and Matthew A. Wilson in “Economic and ecological concepts for valuing ecosystem services. They provide a helpful history of use value and exchange value, leading up “the end of history,” neoclassical economics:
The history of economic thought is replete with struggles to establish the meaning of value; what is it and how is it measured…. The diamond–water paradox observed that while water has infinite or indefinite value, being necessary for life, its exchange value is low; yet unessential diamonds bear a high exchange value. Following this observation, there was widespread recognition of the distinction between exchange value and use value of goods.
[The utilitarian H.H.] Gossen proposed that in order to maximize satisfaction from a good, such as labor or money, an individual must allocate that good across different uses to equate their marginal utilities in each use. Hence marginal utility would provide a basis for explaining exchange value. . While the diamond–water paradox had been solved many times, the classical economists, such as Smith and Ricardo, could not resolve it using their labor theories of value. It was resolved only by recognizing the importance of utility and scarcity in determining exchange values, and the role of margins in value determination.
While the classical theorists sought a standard physical commodity unit for measuring exchange value, neoclassical theorists did not need such a commodity. As value was assumed to be determined by utility on the margin, and consumers were assumed to allocate money optimally across uses, the marginal utility of money was the same for an individual in all its uses. Money thus became the standard unit of measure. . The general optimization model of labor/ leisure and consumption/saving given time and wealth constraints would yield equivalencies of goods for money, goods for time, and time for money. Time or money can thus be used as a standard of measure of use value; how much time or money will a person willingly sacrifice to obtain commodity X? In sum, as the pursuit of an economic theory of value traversed the broad metaphysical terrain of economic thought, the answer appears to have been found in the concept of value in use. The utility-based values of goods and services are reflected in people’s [willingness to pay (WTP) to attain them], or their [willingness to accept (WTA)] compensation to forego them. WTP and WTA become measures of these values.
The fundamental issue: We did not and do not know the use value of soil. We thought soil contained humus, and hence would be useful for carbon sequestration. Not only does soil not contain humus, there’s no such thing. And soil may be useful for carbon sequestration, but as the Quanta author points out, we don’t know. In the words of the epigraph, bread turned out to be a stone, and a fish a snake. This makes a nonsense of willingness to pay (for what?) and willingness to accept (why?). Now, it may be objected that now science has told us the use value of soil, so pricing can proceed as before (retrofitting all the prices we got wrong). First, no, it hasn’t. Second, why would we believe that it can? Perhaps the use value of soil is so complex that it’s not determinable by systems available to us (or not in time). Third, now do the use value of the ocean. After that, the use value of air. Then go back and do the use value of soil all over again, because both
I conclude that the entire ecosystem services project is flawed, because only the use values of services so small as to be toys — for example, a coral reef — can be priced. The project is a mad endeavor to create the institutional certainties of a smoothly-trading market where no such certainty is to be had. What to do? From Norman, Read, Bar-Yam, and Nassim Nicholas Taleb, “Climate models and precautionary measures“:
[W]e should ask ““
We have only one planet. This fact radically constrains the kinds of risks that are appropriate to take at a large scale. Even a risk with a very low probability becomes unacceptable when it affects all of us – there is no reversing mistakes of that magnitude.
. Push a complex system too far and it will not come back. The popular belief that uncertainty undermines the case for taking seriously the ’climate crisis’ that scientists tell us we face is the opposite of the truth. Properly understood, as driving the case for precaution, uncertainty radically underscores that case, and may even constitute it.
Now, I don’t know where the institution is that can ask the question Taleb is asking, or in what forum they would be answered. I do have two intuitions: First, only something with the power of a religion, possibly a new one, could have the desired effect (as religion did, for example, with the Abolitionists, who were remarkably effective in a short space of time). Second, profit should always be treated with at a minimum with hermeneutic of suspicion and better with a sense of taboo and revulsion, as usury once was, given that — all the jury rigging of carbon taxes and markets in ecosystem services aside — profit during an ecological crisis will tend to reinforce the institutions that are creating the crisis (exactly as has been happening during the pandemic).
Comments from those actually knowledgeable in neoclassical economics and ecosystem services welcome.
 “These are not eating
sardines carbon credits, they are trading sardines carbon credits.”
 If you are an NGO seeking funding for your coral reef project, for example, being able to put a dollar value on the reef is helpful.
 That won’t be easy. From Quanta:
In the 1960s, scientists began writing large, complex computer programs to predict the global climate’s future. Because soil both takes up and releases carbon dioxide, climate models attempted to take into account soil’s interactions with the atmosphere. But the global climate is fantastically complex, and to enable the programs to run on the machines of the time, simplifications were necessary. For soil, scientists made a big one: . Instead, they basically divided soil carbon into short-term and long-term pools, in accordance with the humus paradigm.
More recent generations of models, including ones that the Intergovernmental Panel on Climate Change uses for its widely read reports, are essentially palimpsests built on earlier ones, said Torn. They still assume soil carbon exists in long-term and short-term pools.
I would imagine that models for the air and the ocean are just as over-simplified, if not more so.
 That’s before we consider the well-known flaws in markets that the last 2021 – 2017 = fourteen years have shown as, as fraud, rigging, phishing, and so forth.
An awful lot of the worlds “soil” is also called “muskeg” or peat bog.
And it is almost pure carbon.
And we are in for a hell of a ride if/ when it goes from being a CO2 sink to a source.
AEL, My understanding is that permafrost, which seems akin to a frozen peat bog, as it melts becomes a source of methane – an even much more destructible gas than CO2.
‘destructible’? I don’t understand.
I am not Mantid, but I will guess that Mantid means that methane is a more powerful greenhouse gas than carbon dioxide is.
Perhaps we are discovering the basic amoral and submoral depravity of economics as a discipline and a concept.
Perhaps the concept of ” use-value” of soil is a window into the depravity of economics and financialnomics rather than a window into understanding anything about soil.
Perhaps a better concept would be the ” life-value” of soil in the support of life living life beyond the realm of civilizational and economystic depravatism.
A new religion – like MaddAdam maybe?
I’ve been kind of queasy about the fact that it appears that we’re heading down that timeline. I’m ready to be a God’s Gardener though.
I shall join you….
I believe that soluble humic acids can leach downward, and if they get deep enough, they might last longer (though I think that there is microbial life quite deep in the crust).
This probably is not a significant means by which to sequester carbon.
On an almost completely unrelated point, I wonder whether humic acids in percolating groundwater might be a means by which “modern” Carbon (with, IIRC, 10^-12 C14 per C12 atom) might contaminate deep old carbon deposits that are completely depleted in their original C14.
Wonderful source: the film Banking Nature by Delestrac/Feydel. It’s about the ecosystem-services formulation. I can’t recommend it highly enough. They talk about the mitigation bonds. A couple of people in the film – Jutta Kill of World Rainforest Movement then Geneviève Azam of Toulouse point out something that made me say aha. The idea that markets will be enlisted for a goal and not its opposite disregards the possibility of shorting. Capital prefers actual outcomes to float, along the lines of “no picking winners and losers.” Even if the outcomes would seem to be something pretty freaking universal and the winner is life on the planet, somebody may want to shrug and act like Magnetar if the returns are higher for betting against mitigation and people getting together to NOT develop something. Perhaps they’re violating fiduciary if they don’t. I could be overextrapolating but that’s what K&A say with regard to endangered species. Disturbing.
I wrote up a few minutes of JK and GA.
Narrator: What is the guarantee that this so-called green finance will benefit the planet?
JK: The likelihood that banks, traders will be developing the hardware and software of this new market in a way that benefits them rather than benefits nature will be the same as was the case in the financial crisis 2008-9. These financial derivatives, financial products that were being traded very rapidly were not helping house owners to safely refinance their home. No, they were developed and used to increase the profits that banks could make. … It’s not that big a stretch of an imagination to use the same logic of dividing up the biodiversity credits and dividing up biodiversity in a sense and saying you can now speculate on the future date of extinction of that species.
GA: Important propositions are growing in the US, to develop on a large scale, a whole system of derivative products which are insurance products meant to preserve species and habitats. Let’s say I purchased a security from an insurance company which insures me against the risk that I cause the disappearance of a species. Well, I can resell this security on a secondary market which has nothing to do with the original purpose of the security. And it doesn’t matter if the derivative is linked to birds, rice, petrol or a share. The nature of what the derivative is based on isn’t important, what is important is the return at the end. So if a better return is possible by speculating on, say, the disappearance of a species, then why not?
Depravonomics, biznomics, financeonomics . . . depravity on parade.
> the film Banking Nature
Thank you so very much. I fought my way to the conclusion that “ecosystem services” were conceptually a giant pile of [family blog] pretty much in isolation — so dense is the propaganda — so it’s good to have a little reinforncement.
Kinda difficult to both exploit and benefit nature at the same time. Since time immemorial we have extracted profit from nature and nature has bounced back. And we actually thought that “profit” was something we created by our “industriousness”. Lunacy. Now with a population pushing 9 billion and a polluted planet things aren’t working out so well. We might be too ignorant and delusional to even approach sustainability. And sustainability is renewability. So, Lambert’s “…profit during an ecological crisis will tend to reinforce the institutions that create the crisis” means we can no longer extract profit from the environment and we can no longer over-consume (also for profits). That really knocks the stilts out from under both capitalism and socialism. Which are each some degree of environmental usury. When it comes to risk and uncertainty there’s no room left for speculation. We need to protect the planet asap. So one other little thing… that link yesterday, “I, token.” If we allow a secondary form of exchange using “unlicensed” currencies farmed aggressively at crypto farms it will make a mockery of any attempt we make to curb our enthusiasm for “profits”. A secondary transactional medium of exchange between consenting parties will gobble up natural resources faster than sovereign spending ever could. Markets will be out of control, literally. So just a thought: profit should be taboo, usury should be taboo including over-consumption, and any creation or use of cryptocurrency should be a capital felony.
I believe our pedologist commenter is named subboreal. I hope he offers some thoughts on this new paradigm of ” humus does not exist”.
” What’s that grinding noise? ”
” Someone shifting paradigms without the clutch”.
Brother . . . can you paradigm?
Dirt guy checking in:
Gracious me, NC is giving us yet another 15 mins of fame!
Like everyone else who studied soil science in the ’70s and ’80s (and earlier), I learned all about humic materials in my soil chemistry and soil biochemistry courses, and depending on how keen the prof was about this stuff, we might learn how to do the extraction / fractionation procedure for getting this goo out of a soil sample. It was pretty simple – just shake up a few grams in a strong alkaline solution (usually sodium hydroxide), and you got a black extract that looked a bit like crude oil. Then you added acid to the extract, and a good portion of it would precipitate on the bottom of your centrifuge tube. The precipitate was called “humic acid”, and what remained dissolved was called “fulvic acid”. (Nostalgic memories …) There was some organic matter which couldn’t be freed from the soil by this procedure, and it was called “humin”. At the time, I couldn’t help feeling that this had a bit of an alchemical flavour to it – as a vestige of a Jungian phase way back, I still have a copy of “Psychology and Alchemy” – searching for the key to transmute the dark foul matter of earth into something more refined.
During the glory days of humic substances research, Canadian soil scientists took particular pride in the fact that one of the leading authorities in the field, Dr. Morris Schnitzer, was based at the federal agriculture labs in Ottawa. (Obit here: https://link.springer.com/article/10.1007/s00374-020-01496-3 ) Schnitzer used just about every available tool of modern organic chemistry to try to figure out what these materials were made of, and how they related to organic substances present in plants, as well as those synthesized by microbes.
Although it wasn’t my area of research, I was aware that significant revisionism was occurring by ~ 10 years ago, and that the new consensus was that humic substances weren’t really a distinct chemical tribe in themselves.
So I thought that the Quanta article did a pretty nice job of laying out what’s happened in the soil organic matter world in recent years. The Lehmann & Kleber article that he cites is one of the sources that helped me revise the organic matter lecture for my introductory soils course. Lehmann is one of a dozen co-authors on an earlier (2011) review article which also helped me get up to speed. I managed to find an open access version, and I think it gives a good round-up of what these newer ideas mean for the suddenly sexy topic of why organic matter hangs around (or doesn’t) in soils: https://escholarship.org/uc/item/49r8v2b5
Some key excerpts:
About a decade ago, a fundamental conundrum was articulated: why, when organic matter is thermodynamically unstable, does it persist in soils, sometimes for thousands of years? Recent advances in physics, material sciences, genomics and computation have enabled a new generation of research on this topic. This in turn has led to a new view of soil-organic-carbon dynamics—that organic matter persists not because of the intrinsic properties of the organic matter itself, but because of physicochemical and biological influences from the surrounding environment that reduce the probability (and therefore rate) of decomposition, thereby allowing the organic matter to persist. In other words, the persistence of soil organic carbon is primarily not a molecular property, but an ecosystem property. (my emphasis)
However, using compound-specific isotopic analysis, molecules predicted to persist in soils (such as lignins or plant lipids) have been shown to turn over more rapidly than the bulk of the organic matter … Furthermore, other potentially labile compounds, such as sugars, can persist not for weeks but for decades. We therefore cannot extrapolate the initial stages of litter decomposition to explain the persistence of organic compounds in soils for centuries to millennia—other mechanisms protect against decomposition.
The Schmidt et al. review has some really terrific graphics, which make its main messages pretty accessible.
However alchemical some parts of my own field may have felt when I first encountered them in school, my brief acquaintance with the notion of “ecosystem services” has left me able to keep holding my head high…
‘However alchemical some parts of my own field may have felt’
Had to smile at that one. There was a British author named James Herriot who was a veterinarian in Yorkshire, England. He wrote highly popular books and earned much renown. In one of his books, he was describing how he and the vet he was learning under were looking proudly upon a room full of shelves of potions and chemical mixes that were used in their practice and were quite commonly used. There was the art of the alchemist about it and this must have been in the early 40s when he was still learning his trade. He reflected in his autobiography in later years how modern science revealed that they were not much use at all – junk in fact – compared to what science learned later on. Sigh.
what does all of this mean for Tiera Prieta?
I’m currently attempting to get my ducks in a row to experiment with a method to counter persistent herbicides in manure and compost using activated charcoal(from bamboo and cedar elm trimmings, using a yet to be built retort)
from what i can tell, seems clear that the charcoal will sequester these compounds.
but what about the other use-values of charcoal in soil…as evidenced by all those Amazonian forest gardens discovered in the last 20-30 years?
I’ve been aware of…without delving too deep…the alchemical pseudoscienc-ey nature of what we think we know about soils for some time…early intuition, backed up by various random contradictory things i’ve come across.(and, to be clear, I like Popper’s “all knowledge is provisional”, and enjoy contemplating just how much we don’t know about almost everything)
and all the wall street rah-rah surrounding this doesn’t help with that assessment, at all,lol.
nevertheless, i admit that i was looking forward to a little bit of USDA $ for sequestration…perhaps in the next farm bill.
I’ll still take the money if it’s on offer without too much fuss…but I’m saddened that the whole concept appears to be closer to Enron than to actual science.
About carbon bio-sequestration, under water-surface carbon sequestration is certainly real, as long as the sequestered bio-carbon ( peat/etc.) remains under an oxygen-blocking water-surface. So, wetland/peatland/bogland maintainance to keep the already-sequestered carbon sequestered, and wetland/peatland/bogland restoration and reflooding and expansion to increase the amount of skycarbon suckdown and sub-water sequestration.
Carbon sequestration in soils . . . nonsense? Only if viewed as “able to increase forever” and/or ” set and forget”. If a bunch of soil has been decarbonized from its pre-farming 8% down to its current agribusiness-as-usual 1% level, that’s a lot of soil carbon flooded into the sky. If a new model of farming-business-unusual mediates and drives the re-suckdown of skycarbon and its repacking into the soil back to the former 8%, that’s a lot of skycarbon resuckdown. If there were to be a reality-based system of “carbon suckdown rewards and credits”, such a one-time resuckdown would deserve credit. But there would then have to be a method of charging the farmer involved if herm’s soilcarbon measurably went down again.
That would create a punitive incentive to keep farming in such a way as to keep the soilcarbon level maintained at its high level.
Intelligent high-information farmers wouldn’t need that combination of reward-and-punishment for measured soilcarbon. Intelligent high-information farmers would understand the ongoing operational benefits they derive from getting their soil high in biocarbon and keeping it high in biocarbon. The most intelligent highest-information farmers are already restoring their soilcarbon and then maintaining their restored soilcarbon levels without any such structure of payments and clawbacks for measured carbon level changes up or down.
The whole thing about humus is starting to resemble the old concept about aether. Centuries ago, they could not consider the possibility that space could be empty but there must be some sort of filler that we could not just find. It was a very long time before it became accepted that yes, space was just a vacuum and that there was nothing there to transmit em waves through for example. But I find it bizarre that we have to wait until the third decade of the 21st century before we find that there is no such thing as humus either-
Back in the not too distant past terms like “humus”, “humates” and “humic substances” in soil organic matter were operationally defined – meaning, fractions of organic matter that were either soluble or insoluble in certain laboratory procedures at differing pH conditions were given these categorical labels. I suspect that researchers have refined this since then. To say there is no “humus” is like saying we don’t use these procedures anymore to define categories of soil organic matter – like you can’t call carrots a member of the umbelliferae because now they have been lumped into a different plant family. The “recalictrance” of humus is conditional. SOM in the Chihuahua desert will degrade in a matter of months, but in the muskegs of the Canadian shield it can last centuries or more. I think humus exists, it’s just a matter of what procedures you want to use to classify and categorize decaying plant and microbial carbon. The economic valuation of SOM …well, that’s all voodoo.
Actually, saying humus ” doesn’t exist” anymore is like saying carrots ” don’t exist” anymore because they have been lumped into a “new family”.
Perhaps the new soil paradigmists might want to tighten up their language to say that ” long-term humus recalcitrance in the soil” is what doesn’t exist. Because whatever the physical material that existed at the time we called it humus, still exists and is still the same physical material even if we wish to give it a new name.
And we learn that space is a vacuum, and then along comes quantum foam, Lol…
Is the soil an ecosystem service? Yes.
It has taken thousands of years to create the small, weathered, particles of sands, silts, and clays that make up the physical aggregates that we call soil. Both wind and water (rivers/streams) has transported these materials to locations that have proved fortuitous for natural plant communities and human agriculture alike. The initial natural plant communities have created habitat for a complex interplay of plants and animals that we now call the earth’s ecosystem.
Unfortunately, an apex animal discovered agricultural/economic techniques that have disturbed the ecosystem so rapidly that they are now pushing the ecosystem service of consistent, livable temperature, adequate rain/snow fall for industrial agriculture to the point it impacts existing living locations and infrastructure to the point of collapse.
Whether or not our understanding of soils or economics is flawed, it may not matter.
Sorry for the long, slightly unintelligible sentence that makes up the third “paragraph”. The site didn’t allow me to edit my work.
One thing for sure that any reader can do:
-Do not spray or use poisons of any kind which kill soil microorganisms.
-Retain as much organic material as possible on whatever patch of land that you control. Leaves, cut grass, sticks, kitchen scraps, compost pile it, if fire danger, or just let is rot in place.
‘Soil Depletion and Land Rent’ by Mason Gaffney
For me the problem with ecosystem services is that the values assigned based on the perceived use values of consumers, under an incomplete understanding of exactly what services the ecosystem provides. Ie, “oh here’s a big forest, to find out how much it’s worth we’ll ask these rich city dwellers how far they’d be willing to drive to ‘experience’ a nice forest, then convert that into money”.
Yes, I’m oversimplifying and there are several categories of use that they attempt to price when they work up these models. But at the basic level, that is how each category is valued. And the number of categories is defined by the economists working it up.
So when we don’t know how a system works or exactly what it does, or even when some of us know but not those involved in the model “pricing”, it is impossible to put a high enough figure on these models. They become just a way to undervalue natural resources to enable extraction. Taleb et al came at the same conclusion from a different angle I believe.
It’s not just soil. There are for practical purposes no ecosystems (or any biological systems) that we understand well enough to assign a reasonable price. At it’s heart, this is the same problem that all modern economics has – there is no perfectly aware buyer.
“there is no perfectly aware buyer”
economists want very badly to be understood to be like Physicists…”can’t do anything about inequality/poor people/pollution…because it’s Science!”
but it’s all just a religion…the whole world has been made into Easter Island, and we’re killing ourselves making and moving giant stone heads.
I’m with Polanyi…many things should not be subject to “Market Rules”, or commodified in any way.
> There are for practical purposes no ecosystems (or any biological systems) that we understand well enough to assign a reasonable price.
Yep. No foundation to it. So, ka-ching!
Economics writer Michael Hudson has apparently been retained to advise China about how to value resources held in common. In what I have read, he describes his task as a daunting challenge.
The Enclosure Act(s) that were enacted in Britain between 1604 and 1914, imho, are the basis for what has amounted to the “commodification” of dirt. The latest techno-babble seems to be a re hash of political moves over ~300 years. Cockamamie schemes like iron sulfate atmospheric injection, artificial clouds, reflective orbital particles etc. etc. look like publicity stunts. For profit.
I look to Rudolph Steiner and Alan Chadwick and others of their ilk for insights about what one can do on an individual level as a gardener to counter the destructive forces of greed.
“They (the pricing models) become just a way to undervalue natural resources to enable extraction.
And, why do we believe that we humans (or we Western civilization humans) have the right, if not the obligation, to mine, blast, clear-cut, slaughter, spray with herbicides and pesticides, all to convert every non-human (and, some would say, non-white human) entity on the planet into piles of money?
“And God blessed them. And God said to them, ‘Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.” Genesis 1:28
There you are: from God’s mouth to your eager ear, a religious diktat that legitimizes our destruction of non-living, non-sentient beings. It doesn’t have to be this way. Lambert may be correct: ” … only something with the power of a religion, possibly a new one, could have the desired effect ”
If we don’t change our view of the world, i.e., we humans are just a little, relatively unimportant piece of a gigantic jig-saw puzzle that interconnects for survival in ways that we can only begin to understand, we are doomed to decades of pain. And, the kicker? “Nature” does not care.
I’d have no problems with pricing it, if I was sure they could value it to at least a reasonable approximation. Which means accounting for all externalities, short, medium and long term, including the ones we don’t know about yet, or don’t consider connected yet (but are) etc. etc.
The “there’s a value on everything” stuff is a nice economic gimmick. Because, fundamentally, it is sort of true. But it’s still a gimmick, because it ommits the other part “but more often then not, we have no idea what it is, with error bars that are magnitedes larger than the value we put on it”. And without the second, the first is irrelevant.
Why will globalisation be an environmental disaster?
Western companies couldn’t wait to off-shore to low cost China, where they could make higher profits.
Maximising profit is all about reducing costs.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
Environmentally friendly measures cost money and reduce profit.
The goal is to maximise profit.
Why do firms move to Mexico and export into the US?
Companies prefer Mexico with its cheap labour, lax health and safety standards, and lack of environmental regulations.
They can expose workers to hazardous chemicals and just pump toxic waste straight out into the environment, without incurring the costs associated in dealing with them in an environmentally friendly way.
Every avenue must be explored to reduce costs.
The lower the costs, the higher the profit.
We have created a system where the incentives encourage people to be environmentally unfriendly.
“Show me the incentive and I’ll show you the outcome” Warren Buffet’s partner Charlie Munger
You neglected to mention lax labor standards – no employee protections. Not that there are any in the good old US of A either. One threat employers made (and continue to do so) in situations where workers wish to organize is the threat to close the plant and move the jobs offshore.
If we were to abolish Free Trade, we could pass a law forbidding the import of anything that had used to be made in America at any time in the past. That would nullify the “we’ll move the factory overseas” threat from management.
But we can’t pass any such laws until we abolish Free Trade and abolish every Free Trade Agreement and Treaty.
I did a Masters thesis on this way back in the late 1980’s. It was very clear, even back then, that any attempts to value ecological goods failed on basic epistemological grounds, for two main reasons:
1. You can only correctly call such goods if the values or commensurable – i.e. it can be demonstrated that they can be consistently ‘priced’ using one variable (i.e. money). There was plenty of evidence that this does not hold.
2. The different methods of valuation need to provide some sort of consistent pricing. Quite simply, they don’t. All the various methodologies invariably end up with valuations that differ on orders of magnitude depending on very slight variations in how the studies are carried out. I think the only ones that were in any way consistent were hedonic property valuations (i.e. looking at how, for example, the presence of a park, or street trees, changes property values).
When people ask what I mean about item 2, I usually give them the example of a mobile phone. Ask someone what the ‘value’ is of their Apple X and they will usually tell you what they paid for it. Then ask them how much they would accept to sign a contract not to own or use a mobile for a year. And then ask them similar questions about how much they’d accept, for example, to use a dumb phone only for a year. And then ask them how much they would pay in an auction for a phone if there was only one available. You will get hugely varying answers. And if this is the case for a very well established consumer item like a phone, what chance is there of getting a reasonable answer for the value of soil, or any other ecological ‘service’?
Needless to say, there are also many ethical and practical reasons why the valuation of ecological goods is a terrible idea for decision making. There is no easy answer to how you make decisions on resource allocation when it comes to public goods or intangibles, but the overwhelming evidence is that when people are allowed to make ‘real’ decisions on these issues (i.e. in more openly democratic societies), they choose conservation and a cautious low risk approach, or at least, one much more cautious than is usually followed in capitalist or nationalist/authoritarian societies. A very good way to measure just how democratic a society is, is to just use your eyes to see how much money goes into public goods and preservation over and above private goods and random destruction.
Thanks for this comment PK. That is a much better explanation of why the valuing methods fail than i was able to muster.
The only way to get consisten pricing is to restrict context severely.
But that is a problem in its own, as both price and value are always contextual constructs.
So basically, to get an artificial consistency you remove the real-world background. Welcome to today’s economic.
Reminds me of “risk assessment,” an idea originally put forth by business people to tune up their capital-growth strategies. Very seductive, and a huge deflection in the environmental area, where the game was to control the inputs and the formulas to favor profit and “development” including introducing all those new chemical species into commerce. Huge amounts of energy were and are spent arguing over those points, with bad-faith charges being laid by all sides (with good reason in many cases, like Dow Chemical’s vastly disingenuous “Trace Chemistries of Fire” used to obscure their deadly dissemination of chlorinated dioxins and related compounds, https://www.sciencedirect.com/science/article/abs/pii/0045653588902421). Any kind of pricing approach will of course be captured and dominated by commercial interests, and monetized and turned into “investments” with shorting and derivitization as described in comments above. .
As to a new religion of ecological awareness, I’m reminded of Frank Herbert’s invention of the pre-Muad’dib Fremen. The imperial planetary ecologist Kynes and his father instilled a potent future-driven religion of ecological awareness and fierce determination into the Fremen culture, with a millennial vision of Dune as more of a garden world (though always with great deserts for the sandworms. Nothing like that seems in the cards for globalized, fully “owned” and rentier-dominated Earth…
the first six Dune books(the one’s by Frank) were more influential to my thinking about economics, politics, ecology and on and on, than even Neitzsche.
things like hydraulic despotism,Feufrelichs(sp-2) and..as you say…building out an ecoreligion(that doesn’t involve a consumer ecosystem or pseudohippie bougie prattle.)
i guess i’m saving the exegesis of that last one for my dotage, but the still nebulous generalities inform just about everything that i do.
People and groups might want to work-out and practice and apply whatever counter-rentier behavior they can within the sphere of their reach.
If you pay a shinola price for some shinola food from an eco-correct artisanal shinola food producer, you are supporting less Corporate Globalonial Rentierism than if you pay a shitprice for some shitfood from an anti-eco Rentier Class bigbiz shitfood producer.
A couple of quick items.
On the nature of soil: the realization that soil is a complex, dynamic ecosystem instead of a static growing/carbon sequestration medium is surprisingly recent, starting with research on changes in clearcut forest soils roughly thirty years ago. And it’s true that we are only now starting to understand how that complexity interacts with carbon exchange. But it doesn’t follow that obsolete constructs like humus mean that we don’t know whether healthy soils and restorative agriculture/wildlands can, on balance, sequester lots of carbon. It can and does. Rebuilding healthy topsoil and restoring wetlands is one of the single best things we can do to reduce net atmospheric carbon. Plus, healthier soil grows more biomass, creating another dynamic and complex, but, on balance, significant carbon sink.
On ecosystem services: Costanza has been pimping the idea of ecosystem services for a very long time. It’s a shuck, conflating calculable externalized costs (the failed theoretical basis for “tradable” emissions) with the idea that nothing has value if it can’t be commodified.
A better way to think about it is to imagine being lost in the desert with no water, days from any possible rescue. A man appears with just enough water to assure your survival. For a price.
The question is never going to be what the fully internalized value of the water, or the fair market commodity value, or the value of the ecosystem services deployed to provide that water to you might be. How much is it worth? Everything you have.
Humus was then an economist’s notion?
I thought that farmers and animal husbanders over the millennia figured out that “soil” was that vastly complex ecosystem you describe. And in a lot of different times and places, before the advent of the Haber process and all the halogenating and benzene based industrial processes, those folks knew something about making or enhancing soils. Like the forest gardens in the Amazon and even in pre-Euro-raped North America.
I wonder how they valued and priced their “oikos,” back then. Nothing like the sh!t-for-brainer squillionaires and the markets they force down on the planet and use to loot and oppress and deform us mopes do today.
I cannot claim to be “actually knowledgeable in neoclassical economics and ecosystem services” but I feel compelled to comment anyway. This post and its discussion disturb me. Can the soil be thought of as an “Ecosystem Service”? It provides utility and function similar in the abstract to a service. Can the service that soil provides be priced? A notion like “Ecosystem Service” — so embedded as it is in Neoliberal abstractions — virtually assumes that it can be priced. But should the soil be thought of as an “Ecosystem Service” and should it be priced, and if so why? to what purpose, to what advantage, to whose advantage?
The Neoliberal economic religion is built on the faith that a Market can and should be constructed for controlling the production and allocation of everything in our lives. It is built on the faith that a properly constructed Market will compute an optimal solution that maximizes some measure of ‘utility’. Anyone who rejects Neoliberal religious doctrine, should regard as utter nonsense the notion that soil provides an “Ecosystem Service” that can be priced.
I believe a quick read of “Gardiner Means on Administered Prices”,
might address the problems with Neoliberal religion and its incongruity with any real economy. Quoting from this reference: “Administered price behavior in real world economies really does lead to revolutionary conclusions for economic theory: so much of neoclassical economics and Austrian economic theory simply collapses and must be abandoned once one understands its implications.” The prices of many basic goods in the economy are set by those producing the goods in a manner completely alien to any notions of a Market price.
The various Market schemes, including pricing “Ecosystem Services” are just schemes for continuing to blast ‘net zero’ emissions of CO2 into the atmosphere while extracting as much profit as possible before things get bad enough to justify profits from geoengineering projects.
The cover story of the May Monthly Review, by the brother of one of the former editors, is a good perspective if not terribly chic: https://monthlyreview.org/2021/04/01/repairing-the-soil-carbon-rift/.
Neoclassical economics is a very poor guide to valuing anything. That is because it sorely confuses ‘satisfaction with a benefit’ with actual benefits one obtains, as if it is impossible to be dissatisfied with the level of benefit one can get from what one is able to afford to purchase. Starving persons may benefit by being able to obtain a spoonful of rice, but to say that having the benefit :: so many protein units, kilocalorie units, vitamin units, mineral units, etc. –always with constant returns per consumed unit :: well below what is need healthy functioning/ subsistence is, simply put, to ignore the reality that one can be dissatisfied with how little one obtains at any price because it fails to meet actual needs.
So do not expect neoclassical economics to do anything but offer confusing answers until it ceases to confuse people’s satisfaction with benefits from the benefits themselves. Note also that we may not know what the full range of benefits ever are from having anything at all.
AI and machine learning will for sure figure this all out for us, and we mopes will be charged for every breath of wholly owned air and mouthful of wholly owned water, to be deducted from our mope-buck fee-generating labor accounts…
“Putting land to a higher use”. What does that mean, exactly? Is converting open range land to a field of crops a “higher use”? Are oil and gas wells a “higher use”? Since land use decisions are usually based on ignorance it seems to me that what mother nature intended is the supreme higher use. Anything else leads to trouble, eventually.
All the important land use decisions, like zoning and master plans and soil maps and “support payments” are far as I can see, based on who has the money and corruption.
As Milton Friedman once groaned
“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
Too bad no one thought to ask Milton Friedman on camera the following question: ” We put the federal government in charge of atom bombs. Do we have a shortage of atom bombs?”
Adding biological activity to some measure of soil always provides for a more complete understanding of any value, including carbon. Tests for respiration in soil, like Phospholipid Fatty Acid Analysis (PLFA) are now expanding the understanding of soil. A carbon burst test can be used to determine baseline activity. A complete analysis of biological and chemical properties is now available, yet understanding how to use it a ways off. “ Phospholipid fatty acid (PFLA) analysis Indicates the amount of microbial biomass and proportions of microbial types such as mycorrhizal fungi, gram positive fungi, gram negative fungi, actinomycetes, and saprophytic fungi. PLFA is a snapshot of community structure and abundance at the time of sampling. As environmental conditions such as pH, temperature, and moisture change so does the microbial community. These communities are also influenced by soil type, organic matter, intensity and type of tillage, crop rotations, cover crops, and herbicide or pesticide applications. The ability of microbial communities to change rapidly provides producers with a tool to compare agricultural management techniques with respect to overall better soil health and fertility. There is no baseline for biological testing as there is for chemical analysis. Therefore, this test is most useful in making comparisons between management conditions. “ from https://agcrops.osu.edu/newsletter/corn-newsletter/2019-09/plfa-soil-health-test The short answer is plant diversity, what to grow to improve what is already there. Conceptually it is contained in the idea of a Soil Food Web, Dr. Elaine Ingham. https://e360.yale.edu/features/ecosystem_services_whats_wrong_with_putting_a_price_on_nature gives a little background on the idea and some hope for at least some focus. Placing soil or any ecosystem into some sort of marginal utility matrix is really asking for trouble, intractable unsolvable, problematic conditions that result from pricing to some sort of least common denominator means losses will be externalized until overload happens, which really is the operating system that created the problems in the first place.