Book Review: The New Economy of Nature: The Quest to Make Conservation Profitable

by Gretchen C. Daily and Katherine Ellison

Island Press, 2002

260 pages, $25

Hell hath no fury like a pent-up river. Or at least that’s what residents in the city of Napa learned after living for so many years on the floodplain of the Napa River—a body of water that frequently rebelled against its many dams and levees with calamitous floods, including a 1986 doozy that caused $100 million in damages and left three people dead. So, they decided to do something novel. Voters approved a half-cent sales tax hike to tear down the dams and levees, move homes and businesses located on the floodplain, and let the river return to its natural course. The result: a revitalized downtown, higher property values, and fewer costly floods.

The Napa River case lies at the heart of The New Economy of Nature. Written by Gretchen Daily, a distinguished Stanford ecologist, and Katherine Ellison, a Pulitzer Prize-winning investigative journalist, the book examines what happens when a society attaches a financial value to an ecosystem and to the benefits that system provides. “We lack a formal system of appraising or monitoring the value of natural assets, and we have few means of insuring them against damage or loss,” Daily and Ellison write. But because of the work of a few visionaries, we are a step closer to a global economic system in which a healthy ecosystem is reflected positively on the balance sheet.