Much has been written about BP's staggering liabilities for cleanup, compensation and fines for the Gulf of Mexico oil spill.
But few have noted that BP, like Exxon and other oil companies implicated in past spills, will likely pay nothing for perhaps the most important consequence of its mishap: Damage to hard-to-quantify but essential natural benefits provided free of charge by a healthy Gulf of Mexico.
What some call "environmental services" flow from nature to the economy, and ultimately to people. In the gulf, these services begin with the rich primary productivity of marine ecosystems and coastal marshes — the plankton, algae and sea grasses that support the shrimp and fish that are the primary diet for myriad marine animals, birds and land animals. Including us.
The gulf's other environmental services range from the buffering of temperature and climate to the absorption of carbon dioxide from the atmosphere to water cleansed of pollution by wetlands. This storied body of water is also the source of many cultural services. For example, the comfort, spiritual solace or intellectual inspiration that draw so many visitors.
The various projected costs from the gulf spill have ignored these services because in a purely economic sense, there is no market for them, so they have no economic value. But ecologists have worked out a widely accepted method to reveal and translate their value — a method that suggests the real costs of the BP spill will be far higher than even the most jaw-dropping figures floated so far.
In 1989, at the invitation of Jacques and Jean-Michel Cousteau, I was a member of a team of scientists from the University of Florida, led by the renowned ecologist Howard T. Odum, that investigated the environmental costs and natural resource damages of the Exxon Valdez oil spill in Alaska.
We used the late Odum's method of Emergy Synthesis — that's "Emergy" with an "m" — a system of environmental accounting that can evaluate natural resources and ecosystems despite their lack of market, ultimately assigning them economic values. Emergy synthesis is a scientifically derived valuation method that is based on ecological principles and thermodynamics of living systems, rather than economic valuation based on willingness-to-pay.
Our best estimate for the Valdez loss: $1.2 billion. That figure accounted for all plant and animal organisms that were killed, estimates of the losses in primary production, and the longer-term impacts such as the depressed fish populations that would take years to recover.
Given all the complexities involved, the total loss of environmental services from the Deepwater Horizon leak are difficult to project, especially since even the amount of oil is disputed. But we can make some educated guesses.
On July 19, NPR reported that BP has said it has already spent over $4 billion dealing with the spill, which dwarfs the costs of the Valdez spill of $2.1 billion, even as the cleanup continues. If the average loss to environmental services approaches those of the Valdez spill, those losses could easily exceed $36 billion, since up till the July 15 capping of the well between 92 and 328 million gallons — depending on whose flow rate one uses — had discharged into the gulf. That amounts to between eight and 30 times the Valdez spill.
Unfortunately, it is unlikely that BP will pay even a dime for these damages. Fishermen, hotel owners, local, state and federal governments and many other parties can all seek compensation from BP through the court system. But though our entire biosphere is an injured party, there is no legal plaintiff in what ecologist Garrett Harden popularized as the "tragedy of the commons" four decades ago.
That's too bad. BP owes much to our commons, to all of us, in addition to the billions owed to those whose lives were lost and whose income was destroyed. We could use the payment for loss of environmental services for restoration of the gulf, for research on its creatures and ecosystems, and ultimately to reveal and protect the true service value — as opposed to only the consumer value — of our oceans.
Mark T. Brown is professor of Environmental Engineering Sciences and director of the Center for Environmental Policy at the University of Florida.