Introduction

There is increasing recognition that the economic rate of return to sustainable forms of natural resource use is both positive and capable of exceeding the returns to alternative forms of land use, such as agriculture and clear-felling for timber (Peters et al., 1989: Swanson and Barbier, 1992; Pearce and Moran, 1994). Where the rate of return analysis does favour the conservation of biological resources and biological diversity, the requisite land use will still not be realised if either: (1) the benefits of conservation have no marketable dimension (a form of ‘market failure’), or (2) governments intervene in the market place to distort economic signals in favour of exploitative land use that involves biodiversity loss. Clearly, then, two stages in the economic case for biodiversity conservation are: (1) demonstrating the economic value of biodiversity conservation, and (2) implementing mechanisms whereby those values can be appropriated and captured. We refer to these stages as the demonstration and appropriation stages in the process of conserving biodiversity.

This paper is concerned with the first stage of the argument: demonstration. It is concerned, moreover, with only one aspect of economic value: the form of use value reflected in the actual or potential and direct application of plants in the production of pharmaceuticals.