Calculating the Value of the Commons
* Article: Calculating the value of the commons: Generating resilient urban futures. By Doina Petrescu, Constantin Petcou, Katherine Gibson et al.Environmental Policy and Governance, May 2020.
URL = https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890
Abstract
"In this article, we present a method for valuing the multidimensional aspects of urban commons. This method draws from and contributes to a broader conception of social or community returns on investment, using the case and data of a vibrant project, strategy, and model of ecological resilience, R‐Urban, on the outskirts of Paris. R‐Urban is based on networks of urban commons and collective hubs supporting civic resilience practices. We use data from 2015, the year before one of the hubs was evicted from its site by a municipal administration that could not see the value of an “urban farm” compared to a parking lot. We combine estimates of the direct revenues generated for a host of activities that took place in R‐Urban, including an urban farm, community recycling centre, a greenhouse, community kitchen, compost school, café, a teaching space, and a mini‐market. We then estimate the market value of volunteer labour put into running the sites, in addition to the value of training and education conducted through formal and informal channels, and the new jobs and earnings that were generated due to R‐Urban activity. Finally, we estimate the monetary value of the savings made by an environmentally conscious design that focused on water recycling, soil and biodiversity improvement, and social and health benefits, breaking them down by savings to the organization, participants and households involved in R‐Urban itself, as well as savings to the state and the planet. Although our article is built on specific quantities from a concrete project, the method has wide applicability to urban commons of many types seeking to demonstrate the worth and value of all their many facets and activities."
Excerpts
Methodology for Calculating the Value of an Urban Commons
By Doina Petrescu et al. :
"Community Economy Returns are calculated in four stages: first, in terms of direct financial revenues generated for individuals and for the collective; second, in terms of the estimated value of unpaid labour generated by R‐Urban activities; third, in terms of the estimated value of increased individual capacities that were generated; and fourth, in terms of saved costs to the commons and commoner households, the state, and the planet. Figure 5 shows the (sometimes overlapping) relationship between these methods of calculation and Community Economy Returns. In most of the accompanying tables, returns are grouped into different areas of activity of the project: “Architecture & Construction,” “Gardening & Environmental Care,” “Research, Training & Education,” “Small Business & Jobs Training,” “Care & Governance of the Commons,” and “Human & Social Wellbeing.” These categories all contribute in different ways to the Community Economy Returns shown on the left of Figure 5. Our CEROI calculations are complemented by qualitative data on subjectivity changes with the emerging commoning community." (https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890)
Full-Cost Accounting
By Doina Petrescu et al. :
"A whole subfield of environmental and ecological economics, for instance, argues for “full cost accounting.” Calculating the full costs of any project involves considering the life cycle of a project and cost effects along the entirety of the supply chain and waste streams (Epstein et al., 2011). Epstein et al. (2011), for example, have produced a full cost accounting of coal mining in Appalachia that includes producing both conservative, average, and high cost estimates for land disturbance, public health problems, climate damage, excess mental retardation for those living near coal production sites, acid precipitation, local water contamination, and so on.
By the same token full benefit accounting would involve estimating the social value produced by any project beyond the creation of paid employment or improvements in individual wellbeing. Determining full benefit requires identifying improvements in household, community and ecological health, social and psychological well‐being, as well as improvements in civic involvement and participatory democracy. A more comprehensive method of full cost–benefit analysis attaches a price to as many of these external and indirect effects as possible, but in so doing, brings into relief a constitutive contradiction: that which is excluded by conventional financial accounting (as indirect or external) is actually internal to the analysis, not external. Discomfort with conventional accounting has led many to seek going beyond GDP, such as the Index of Sustainable Economic Welfare (England, 1998), with Bandura (2008) listing 178 different indices that actually subtract measures that reduce well‐being such as pollution, disaster recovery, etc. And despite this proliferation of academic interest in measuring well‐being more broadly and sustainably, there has been little take‐up of these indices when making municipal or national level fiscal decisions." (https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890)
Community Economy Return on Investment
Gibson‐Graham et al. :
"A community economy is built upon ethical investments—in surviving well, distributing surplus, responsibly encountering others, consuming sustainably, and sharing our planetary commons, all with a view to the wellbeing of future more‐than‐human generations (Gibson‐Graham, 2006). In Take Back the Economy: An Ethical Guide for Transforming Our Communities, Gibson‐Graham et al. (2013) proposed the Community Economy Return on Investment (CEROI) as a mechanism for tracking and valuing the creation of ethical economies. Community economy “returns” include both social benefits such as increased forms of individual, household and community well‐being, as well as ecological benefits such as a reduced ecological footprint. They also include increased collectively controlled surplus, increased ethical trade, and expanded commons.
The CEROI tool provides a guide for the method we devised for calculating the value of the R‐Urban commons. This tool provides a way of distinguishing how the R‐Urban intervention specifically enabled commoning and the emergence of ethical economic and ecological relations. We use actual and estimated amounts of money, admittedly the dominant metric of value in the capitalist economy (Dyer‐Witheford in Bollier, 2016a, p. 23), to represent the value of urban commoning (Bauwens in Bollier, 2016a, p. 2). Our innovation is to deploy this metric to account for the incredible volume of value that can be returned on an investment in commoning."
(https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890)
Overview of similar research
From Urban Farms to Forests: Calculating the Value of the Commons Across Sectors
The challenge of making the multifaceted value of the commons visible and measurable has spurred innovative research across diverse sectors. Building on the foundational work of the R-Urban study in Paris, which applied a Community Economy Return on Investment (CEROI) framework, similar methodologies have been adapted to quantify the social, ecological, and economic returns of commons-based initiatives elsewhere. These studies share a common goal: to demonstrate that the value generated by the commons extends far beyond direct financial revenue, encompassing volunteer labor, increased community capacities, ecosystem services, and savings to the state and the planet.
Comparative Studies Across Sectors
The table below summarizes several key studies that apply comparable "value accounting" frameworks—such as CEROI, full-cost accounting, or ecosystem services valuation—to commons in different sectors.
| Sector / Focus | Study/Project & Location | Key Methodology / Framework | Core Findings on Value | Source / Reference |
|---|---|---|---|---|
| Urban Agriculture & Food Commons | Cultivate, Christchurch, New Zealand | Community Economy Return on Investment (CEROI) | Documented non-monetary returns of urban farms, including therapeutic benefits for youth, changed lives, social connections, and a renewed sense of the post-disaster city, beyond just food production or job training. | Report: "Delivering Urban Wellbeing through Transformative Community Enterprise" (2019) |
| Urban Agriculture & Social-Ecological Impact | Flemo Farm, Toronto, Canada | Community Economy Return on Investment (CEROI) combined with theory of 'metabolic rift' | Analyzed the values, investments, and returns of a small urban farm, revealing its role in mending social and ecological ruptures and creating "something more" than conventional metrics capture. | Master's Thesis, University of Toronto (2023) |
| Forests, Pastures & Wastelands (Land Commons) | State of Odisha, India | Ecosystem Services Valuation (analyzing provisioning, regulating, supporting, and cultural services) | Valued the annual economic and socio-cultural benefits of 5 million hectares of community-held land at approximately ₹36,890 crore (approx. $4.4 billion USD). This includes tangible products like non-timber forest products, as well as climate regulation, soil formation, and spiritual value. | Study by Foundation for Ecological Security, et al. (2024) |
| All Land Commons (Forests, Grazing Lands, etc.) | National-level study, India | Ecosystem Services Valuation (using a standardized valuation matrix) | Estimated that India's 66.5 million hectares of land commons provide ecosystem services worth an astounding ₹6.6 lakh crore (approx. $79 billion USD) annually. The study emphasizes that 350 million rural Indians depend on these commons for their livelihoods. | Report by Common Ground, et al. (2024) |
Key Insights from Cross-Sectoral Application
These studies reveal powerful trends in how communities and researchers are making the value of the commons legible:
- The CEROI Tool is Transferable: The method pioneered in the R-urban study has been intentionally adapted for other urban contexts, such as the Cultivate project in New Zealand and Flemo Farm in Canada. It provides a language to articulate the "something more"—the social, psychological, and ecological returns—that conventional accounting misses.
- Large-Scale Valuation of Natural Commons: At a much larger scale, ecosystem services valuation is being used to make the economic case for protecting land commons. The India studies are prime examples, translating the immense, often invisible, contributions of forests and pastures into figures that policymakers and markets can recognize. This echoes the "full-cost accounting" principles which seek to account for life-cycle costs and benefits, including those to the planet.
- A Shared Goal: Making Value Visible: Across all these examples—from a small urban farm to millions of hectares of forest—the common thread is a struggle for "value sovereignty." These studies provide communities and advocates with evidence to counter narratives that see land only for its exchange value (like a parking lot) and to argue for its multifaceted contribution to human and ecological well-being.