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Nature is Being Renamed ‘Natural Capital’ – But is it Really the Planet that Will Profit?

The Conversation

September 13, 2016

by Sian Sullivan

 

China’s Jiangxi mountains: now just an asset? Shutterstock

The four-yearly World Conservation Congress of the International Union for the Conservation of Nature has just taken place in Hawai’i. The congress is the largest global meeting on nature’s conservation. This year a controversial motion was debated regarding incorporating the language and mechanisms of “natural capital” into IUCN policy.

But what is “natural capital”? And why use it to refer to “nature”?

Motion 63 on “Natural Capital”, adopted at the congress, proposes the development of a “natural capital charter” as a framework “for the application of natural capital approaches and mechanisms”. In “noting that concepts and language of natural capital are becoming widespread within conservation circles and IUCN”, the motion reflects IUCN’s adoption of “a substantial policy position” on natural capital. Eleven programmed sessions scheduled for the congress included “natural capital” in the title. Many are associated with the recent launch of the global Natural Capital Protocol, which brings together business leaders to create a world where business both enhances and conserves nature.

At least one congress session discussed possible “unforeseen impacts of natural capital on broader issues of equitability, ethics, values, rights and social justice”. This draws on widespreadconcerns around the metaphor that nature-is-as-capital-is. Critics worry about the emphasis on economic, as opposed to ecological, language and models, and a corresponding marginalisation of non-economic values that elicit care for the natural world.

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Naming nature … but at what cost? Shutterstock

Naturalising ‘natural capital’

The use of “natural capital” as a noun is becoming increasingly normalised in environmental governance. Recent natural capital initiatives include the World Forum on Natural Capital, described as “the world’s leading natural capital event”, the Natural Capital Declaration, which commits the financial sector to mainstreaming “natural capital considerations” into all financial products and services, and the Natural Capital Financing Facility, a financial instrument of the European Investment Bank and the European Commission that aims “to prove to the market and to potential investors the attractiveness of biodiversity and climate adaptation operations in order to promote sustainable investments from the private sector”.

All these initiatives share the UK Natural Capital Committee’s view that “natural capital” consists of “our natural assets including forests, rivers, land, minerals and oceans”. People used to talk about “nature” or “the natural environment” – now they speak of “natural capital”.

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Growing profits. Shutterstock

So what does the word “capital” do to “nature” when they are linked? And should nature be seen in terms of capital at all? One controversial aspect, backed by IUCN’s Business and Biodiversity Programme, is receiving particular attention. This is the possibility of securing debt-based conservation finance from major institutions and the super-super-rich based on the value of income generated from so-called natural capital assets conserved in situ.

Capitalising natures

At the IUCN’s conservation congress a Coalition for Private Investment in Conservation was launched. Led by financial services company Credit Suisse, and backed by the IUCN and the World Wide Fund for Nature, the coalition builds on a series of recent reports proposing capitalising conservation in exactly this way.

In 2016, and following a 2014 report, Credit Suisse and collaborators published two documents outlining proposals for debt-based, return-seeking conservation finance. The most recent is called Levering Ecosystems: A Business-focused Perspective on how Debt Supports Investment in Ecosystem Services. In this, the CEO of Credit Suisse states that not only is saving ecosystems affordable, but it is also profitable, if turned “into an asset treasured by the mainstream investment market”.

The report proposes a number of mechanisms whereby “businesses can utilise debt as a tool to restore, rehabilitate, and conserve the environment while creating financial value”. The idea is that as “environmental footprints move closer to being recognised as assets and liabilities by companies, debt can be used to fund specific investments in ecosystems that lead to net-positive financial outcomes”. Debt-based financing – for example, through tradeable securities such as bonds – is framed as attractive in part because interest received by investors is “usually tax-deductible”.

The Levering Ecosystems report followed quickly from Conservation Finance: From Niche to Mainstream, steered by a small group including the director of IUCN’s Global Business and Biodiversity Programme. This report estimated the investment potential for conservation finance to be roughly US$200-400 billion by 2020.

Of course, investors loaning finance to projects associated with conservation also expect market-rate returns to compensate for investments considered to conserve, restore or rehabilitate ecosystems.

In the documents above, financial returns are projected as coming in part from new markets in payments for ecosystem services and sales of carbon credits. These new markets will supply the potentially monetisable “dividends” of conserved and restored habitats as “standing natural capitals”. Investor risk is proposed to be reduced through mobilising these assets, as well as the “land or usage rights” from which they derive, as underlying collateral.

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Two redrawn graphs representing the design of debt-based conservation finance, as per Credit Suisse reports in 2014 and 2016.

The graphs above present two schematic diagrams redrawn from the Credit Suisse texts to indicate how these flows of financial value may be leveraged from areas capitalised as investable natural capital. The models are based in part on expectations that recent United Nations Framework Convention on Climate Change support for international carbon compensation mechanisms will release new long-term sources of public funding to “balance anthropogenic emissions by sources and removals by sinks of greenhouse gases”, thereby boosting possibilities for financial flows from forest carbon.

Such financialising moves, nascent and clunky as they are, may yet have significant implications if applied to countries in the global south with remaining high levels of “standing natural capital”. Caution is needed regarding the possibility that forest-rich but least developed countries may become indebted to ultra high-net-worth investors who access returns on their investments from new income streams arising from conserved tropical natures in these countries.

What’s in a name?

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Pandas: sending a powerful message. Shutterstock

In 1986, the central secretariat of the WWF decided to change the name of the organisation from the World Wildlife Fund to the World Wide Fund for Nature. The thinking was that an emphasis on “wildlife”, borne of a concern for endangered species, no longer reflected the organisation’s scope of work for the conservation of the diversity of life on earth. It was considered that overall the organisation would be better served by the term “nature”. In other words, it seems that naming and framing “nature” matters.

Given the conversations and debates at IUCN’s World Conservation Congress, it seems important to ask: how exactly does the conservation of natural capital equate with the conservation of nature? Do these terms in fact invoke different things? If they do, then it is worth clarifying whether the conservation of natural capital is always good for the conservation of nature. If they don’t, then it remains worth querying why exactly “nature” needs to be renamed as “natural capital”.

 

 

[Sian Sullivan is Professor of Environment and Culture, Bath Spa University.]

Ecosystem Services for Whom?

A New Nature Blog

November 25, 2017

Darcey, Wanstead Park bluebellsEcosystem Services – the idea that we benefit from goods and services provided for free by nature. To be frank, the phrase is ugly. It’s ugly language to use to describe so much beauty – Nature; the bringer of joy, spirituality, reflection, contemplation, solace, inspiration.

Nature, the wellspring of human creativity, degraded to a service provider – like just another G4S or Carillion.

Language is vital. The words we use to describe things and processes constrain our thinking about the world – this is the main message of research on values and frames.

As it is with Natural Capital, so it shall be with Ecosystem Services.

Ecosystem Services is also a lie. The notion of a service provided conjures in our mind the idea that it is an economic transaction, just like going to the corner shop to buy a pint of milk (see how I framed that example?). But of course it is not a transaction, it is an extraction of resources, of goods, where nature has no choice about whether to provide the service or not. When we look at farm animals providing us with meat, do we call them service providers?

If a human takes a “service” from another human without permission, without payment, there are whole set of words to describe that relationship, none of them are pretty. So let’s avoid being too emotive about it and call it Ecosystem Servitude. A stronger, but equally appropriate word would be Ecosystem Slavery.

In a recent article, which I commented on this Monday, leading Oxford economics professor Dieter Helm described the idea that nature has intrinsic value as “harmless or dangerous”. To start with Helm displays his contempt for the notion of intrinsic value by misdefining it (perhaps through ignorance perhaps for effect). He suggests that intrinsic value means nature provides people with pleasure! What it is to see the world through such a utilitarian frame.

No, nature provides people with pleasure and this is a hugely important benefit for people, but it does not mean that therefore nature has intrinsic value. It may lead people to believe nature has intrinsic value, but that is a different thing. Anyway Helm regards whatever people believe or feel about nature as “harmless”, which is kind of him.

He goes on to suggest that it is dangerous for people to think nature has some kind of value in and of itself “that nature has value independent of people.” “to claim that there is value without us opens up the possibility that the world might be better off without us.”

Heaven forfend!

Does Helm seriously believe the world was put here for our benefit? Is Helm a christian of that ilk? Note how similar the language is to uber-neolibertarian Andrew Lilico, about whom I wrote yesterday.

I put to you a thought experiment. Take your average nature reserve and consider what “services” it provides, to dogs. (or look at a specific example here)

  • A place to run around
  •  Do a wee and a poo
  •  Chase birds and rabbits (if they’re lucky, even a beaver!)
  •  Follow scent trails
  •  Dig a hole
  •  Social interactions with other dogs

 

There are also incidental benefits for owners.

If an alien arrived from a distant galaxy and landed near a nature reserve in lowland England, taking up an unobserved position to do a spot of nature-watching, what would they conclude? They would see an awful lot of people being led by their dogs to this place, where the dogs would have a great time. They would conclude that these places had been purposefully created to provide benefits for the dogs, wouldn’t they?

Nature Reserves provide ecosystem services for dogs.

Now consider ecosystem services for bees.

Taxpayers pay farmers through agri-environment schemes, to grow flowers (pollinators mixes) instead of food crops. So we are paying farmers to provide ecosystem services, in the form of nectar pollen and places for them to build nests, to bees. Unfortunately, we are also paying farmers to use bee-killing neonicotinoid pesticides on the adjacent crops, which via the soil, inevitably find their way into the flowers, killing the bees, or at least poisoning them.

Clearly we have not thought through this particular provision of ecosystem services for bees.

Add together the services for dogs, for bees and for every other living thing on the planet. This is one way of looking at the intrinsic value of nature. Perhaps Prof Helm could explain exactly why that is a dangerous concept. Perhaps it’s dangerous because it challenges the neoliberal frame which Prof Helm and his Natural Capital devotees wish the rest of us to adopt.

 

[Miles King has worked on British nature conservation for nearly 30 years. He has led conservation work at Plantlife and the Grasslands Trust as well as stints with English Nature, Dorset AONB and as a freelance conservation consultant. He writes about nature, society and politics at www.anewnatureblog.wordpress.com. In 2015 he is starting a new charity called People Need Nature, focussing on the importance of nature to people as a source of inspiration, joy, solace and contemplation.]