Archives

Tagged ‘Natural Capital‘

The Most Valuable Players of the Natural Capital League: Part 2

Wrong Kind of Green

October 19, 2017

 

 

The Natural Capital League (NCL) has gained it’s power and influence steadily over time and through it’s extensive networks.

After 35 years of the development of ecological economics two senior foundational figures have emerged who are utterly worthy of the title MVP.

One of these senior figures is a revered economist and the other is a lawyer, networker, manager, author, and academic.

Herman Daly

Herman Daly is not only a most valuable player, he has defined the game itself while developing the other talented players who’ve pushed the league forward. His great conceptual achievement is the idea of the ‘steady state’ (1977). He has been a very active proponent of the ‘polluter pays principle’. In 1991, while he was at the World Bank to work on sustainable development policy, he argued for the idea of ‘rights to pollute’. In 1992 he co-wrote a paper containing one of the earliest usages of the term ‘natural capital’ titled ‘Natural Capital and Sustainable Development’. In this paper a definition of the term ‘natural capital’ was provided based on a ‘functional definition’ of capital – “a stock that yields a flow of valuable goods and services into the future”.

Herman Daly was the 1996 winner of the Right Livelihood Award, the 2008 Adbusters ‘Man of the Year’ and the 2014 Blue Planet Prize winner. He co-founded the journal Ecological Economics, was closely involved in the founding of the International Society of Ecological Economics and is currently on staff at the Centre for the Advancement of Steady State Economics (CASSE). In 2012 he was a featured interviewee in the documentary ‘Four Horsemen’ directed by Ross Ashcroft who is also known as the Renegade Economist.

“Instead of maximizing returns to and investing in man-made capital (as was appropriate in an empty world), we must now maximize returns to and invest in natural capital (as is appropriate in a full world).”

Herman E. Daly (1994) in: AnnMari Jansson. Investing in Natural Capital: The Ecological Economics Approach To Sustainability. 1994. p. 24

***
‘Rights to Pollute’

Allocation, distribution, and scale: towards an economics that is efficient, just, and sustainable. Ecological Economics

http://www.uvm.edu/~jfarley/EEseminar/readings/sus%20jus%20eff.pdf

***

CASSE – Meet our staff

http://www.steadystate.org/meet/our-staff/

***

Natural Capital and Sustainable Development

http://www.life.illinois.edu/ib/451/Costanza%20(1992).pdf

“The SSE will also require a “demographic transition” in populations of products towards longer-lived, more durable goods, maintained by lower rates of throughput.”

http://www.sd-commission.org.uk/data/files/publications/Herman_Daly_thinkpiece.pdf

***

Gus Speth

James Gustave Speth is all about networking and was once dubbed the “ultimate insider”. He’s an MVP because his whole contribution is much greater than the some of the parts he has played, and he has played so very many parts. His list of fellowships and board appointments stretches to every corner of the sustainable development project. He is the highest ever American office holder at the united nations. He was the administrator of the United Nations Development Program, and he went on to become the Special Coordinator for Economic and Social Affairs under UN Secretary-General Boutros Boutros-Ghali, and chair of the United Nations Development Group. He cofounded the Natural Resources Defense Council (NRDC) and founded the World Resources Institute (WRI). Crucially he knows how to reposition his career to the advantage of sustainable development.

Gus Speth got arrested with climate justice movement leader Bill McKibben in an anti-KXL pipeline protest for the first time in 2011 shortly after moving on from the NRDC and WRI. He responded to the threat of climate change by joining the US advisory board of climate justice organization 350.org and followed up on his vision for the future laid out in his book ‘America the Possible: Manifesto for a New Economy’ through his various networks and positions held in the new economy movement. He is a senior fellow of the Democracy Collaborative, associate fellow at the Tellus Institute, co-chair of the NextSystem Project, board member of New Economy Coalition, former dean Yale School of Forestry and Environmental Studies, Professor at Vermont Law School and was chairman of the U.S. Council on Environmental Quality (Carter Administration). He has a string of other fellowships and advisory roles all relating to sustainable development and new economy issues.

It’s Gus Speth’s role as consultant to the Capital Institute that ties all his networks to the Natural Capital League. The Capital Institute could be called the home of ‘regenerative capitalism’ which connects natural capital flows to the restoration of nature to improve the value of ‘ecosystem services’. Several natural capital economists from organisations such as the Gund Institute with which he shares a close relationship are involved in the Next System Project which he chairs. The Next System Project is focussed very much on social enterprise, support for communities and democratic process. We can expect that Gus Speth will continue to refine his networks and position himself to see sustainable development and the Natural Capital League flourish.

“CHILDREN CENTERED, NOT GROWTH CENTERED. Overall economic growth will not be seen as a priority, and GDP will be seen as a misleading measure of well-being and progress. Instead, indicators of community wealth creation — including measures of social and natural capital — will be closely watched, and special attention will be given to children and young people — their education and their right to loving care, shelter, good nutrition, health care, a toxic-free environment, and freedom from violence.”

America the Possible: A Manifesto, Part II

https://orionmagazine.org/article/america-the-possible-a-manifesto-part-ii/

***
Measuring What Matters: GDP, Ecosystems and the Environment

http://www.wri.org/blog/2010/04/measuring-what-matters-gdp-ecosystems-and-environment

***

Review of America the Possible by John Fullerton

https://capitalinstitute.org/blog/crb_book_review/gus-speths-america-possible/

***

Gus Speth Returns to WRI, Inspires

http://www.wri.org/blog/2014/11/gus-speth-returns-wri-inspires

 

Further reading:

 

The Most Valuable Players of the Natural Capital League: Part 1

 

 

The Most Valuable Players of the Natural Capital League: Part 1

WKOG

August 30, 2017

 

The Natural Capital League (NCL) traces it’s roots to the 1982 Wallenberg Symposium titled ‘Integrating Ecology and Economics’.

35 years later we can share with you the 8 MVPs who have made the biggest contribution to the final capture of nature to under-write the “new economy”, an achievement of unprecedented scope under neoliberalism.

Here are the first 2 of the well networked and high performing NLC MVPs.

Gretchen Daily

Bankers love Gretchen Daily, and we can see why. When she was a research scientist at Stanford in the late 1990’s she edited a journal called ‘Nature’s Services: Societal Dependence on Natural Ecosystems’. She later went on to become a board member of The Nature Conservancy and a founding director of the Natural Capital Project (a joint effort with WWF) where she deals with governments and financiers. She recently received the Blue Planet Prize for her work to harmonize people and nature.

The Natural Capital Project has been working in China with funding from the Ministry of Finance of China, the Paulson Institute, and the National Science Foundation (NSF) to develop eco-mapping software to assess available and potential ecosystem services.

Here’s a quote from Gretchen Daily that shows how she sees the significance of her work.

“The future of human civilization depends on getting this right,”

[source] http://news.stanford.edu/2017/02/02/china-protect-areas-high-ecological-importance-identified-stanford-researchers/

(ALL RIGHTS, ALL USES) Gretchen C. Daily; conservation biologist, Department of Biological Sciences and Woods Institute for the Environment at Stanford, co-lead of the Natural Capital Project, member of TNC board, photographed at her home on the Campus of Stanford University in California. PHOTO CREDIT: ©Mark Godfrey/TNC

 

Links:

Mark Tercek, CEO of The Nature Conservancy interviews Gretchen Daily

http://marktercek.com/dialogues-on-environment/gretchen-daily/

Mark Tercek on Hank Paulson and Gretchen Daily

https://www.naturalcapitalproject.org/natural-capital-symposium-sets-new-agenda/

Gretchen Daily honored with Blue Planet Prize for her work to harmonize people and nature

http://news.stanford.edu/thedish/2017/06/14/gretchen-daily-honored-with-blue-planet-prize-for-her-work-to-harmonize-people-and-nature/

Bob Costanza

Nobody has done more to advance the objectives of the Natural Capital League than Bob Costanza.  He was there at the 1982 Wallenberg Symposium and he contributed the practice of ‘shadow pricing’ for corporations and non government organisations who want to prepare for implementation of the natural capital agenda. He co-founded the journal Ecological Economics and co-founded the International Society for Ecological Economics. He also founded the journal Solutions and along with several of his colleagues is associated with the Next System Project which works on ‘new economy’ issues.

In 1997 he published a paper called ‘The value of the world’s ecosystem services and natural capital’. It is the best known attempt to put a monetary value on the earth’s systems. It was widely reported that the figure Costanza came up with was 33 trillion USD per year.

Here’s a quote from Bob Costanza that shows where his priorities lie.

“I do not agree that more progress will be made by appealing to people’s hearts rather than their wallets.”

[source] https://thebreakthrough.org/index.php/journal/past-issues/issue-2/the-rise-and-fall-of-ecological-economics#body54

Links:

Bob Costanza – ‘The Early History of Ecological Economics and the International Society for Ecological Economics (ISEE)’

http://isecoeco.org/pdf/costanza.pdf

NY Times 20/05/1997. ‘How Much Is Nature Worth? For You, $33 trillion’

http://www.nytimes.com/1997/05/20/science/how-much-is-nature-worth-for-you-33-trillion.html

Nature is Priceless, Which is Why Turning it into ‘Natural Capital’ is Wrong

The Conversation

September 21 2016

by Bram Büscher and Robert Fletcher

 

Natural capital a dangerous illusion that masks the way capitalist growth undermines conservation itself. Shutterstock
An increasingly popular line of argument is that, by turning nature into capital, it is possible to reconcile a capitalist growth economy with conservation. In this way, proponents assert, conservation can be expressed in a language that economists, policy-makers and CEOs understand.

But this strategy is not just self-defeating. It is a dangerous illusion that masks the way capitalist growth undermines conservation itself.

The concept of natural capital is hot. Over the past decade a growing network of actors and organisations has banded around promotion of this concept as the key to the future of sustainable development. At the recent World Conservation Congress, natural capital was front and centre, with a launch celebration of the Natural Capital Protocol and announcement of yet another new coalition to develop private finance for conservation.

These, and many other initiatives, describe natural capital in simple terms as the nature, water, or the air that we live with on a daily basis. The Natural Capital Forum, for example, says the concept refers to

the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines.

This example – and indeed most others are premised on the fundamental assumption that “natural capital” can become the basis for a sustainable economy.

Clearly, things are not this simple, as even many proponents of these initiatives acknowledge. What’s worse is that the two main assumptions in this agenda (nature can become capital and provide services, and this could be the basis for a sustainable economy) are based on fundamental fallacies. They will not reverse the negative effects of our global growth-economy. They will in fact make them worse.

What “capital” really means

The fact that the food we eat and the water we drink apparently need to be labeled “natural capital” only becomes meaningful in the context of capitalist growth. In this context everything should, in principle, become “capital”.

It is therefore vital to be clear on what “capital” really means. In daily conversations and some economic theory, the term is frequently defined as a “stock” or as “assets”. More accurate, however, is to see capital as a process, a dynamic. It is about investing money (or value) in order to make more money (or value). In short, capital is “value in motion”.

Capital in a capitalist economy is therefore never invested for the sake of it. The aim is to extract more money or value than had been invested. Otherwise it would not be capital.

It follows that the move from “nature” to “natural capital” is not an innocent change in terminology, another word for the same thing. Rather, it constitutes a fundamental reconceptualisation and revaluation of nature. Natural capital is about putting nature to work for capitalist growth – euphemistically referred to as green growth.

The move from nature to natural capital is problematic because it assumes that different forms of capital – human, financial, natural – can be made equivalent and exchanged. In practice – and despite proponents’s insistence to the contrary – this means that everything must potentially be expressed through a common, quantitative unit: money. But complex, qualitative, heterogeneous natures, as these same proponents acknowledge, can never adequately be represented in quantitative, homogenous money-units.

And even if we try, there is an untenable tension between the limitlessness of money (we can always generate more money) and the limits of natural capital (we cannot exchange evermore money-capital into natural capital, for all eternity).

Natural capital is therefore inherently anti-ecological and has little to do with giving value to nature, or rendering this value visible. It is the exploitation of nature to inject more value, and seeming legitimacy, into a faltering capitalist growth economy.

Natural capital is inherently anti-ecological and has little to do with giving value to nature. Shutterstock

Failing capital markets

Another assumption is that natural capital can form the basis for a sustainable society. In practice, however, it has become clear that investing in natural capital is not all that attractive for most companies, investment firms or even governments. So, even if a price tag has been put on nature – which can never adequately capture its total value – recent research shows that markets for natural capital and ecosystem services are mostly failing. In practice they are usually not even markets at all. Rather, they are subsidies in disguise.

Further, actual private investments in natural capital are negligible compared to investments in unsustainable economic activities. This is because these are much more profitable, and hence a much better form of capital or “value in motion”.

When Ecuador, for example, asked government and private actors to invest in conservation of the Yasuni protected area, the promised investments stayed far below what was hoped for. Actual donations were much lower still. As a result, the country is now allowing companies to drill for oil in the park.

The common argument made by proponents of natural capital, namely that it helps to make the value of nature visible, is therefore deeply flawed. The value of nature is perfectly visible to investors. They know that destroying it is far more profitable than saving it.

Destruction for protection?

An even more fundamental point is that destruction of nature is increasingly becoming the basis for the conservation of nature. Programmes built on natural capital are usually geared towards offsetting the destruction of nature, which becomes the main source of the money needed for investing in conservation. In the logic of natural capital, investments in unsustainable economic activities are therefore “compensated” by equal investments in sustainable activities.

This practice, which in theory should lead to no net loss of – or better yet, net positive impact on – nature and biodiversity, leads to an untenable contradiction. It means that nature can only be conserved if it is first destroyed.

But as indicated above, this is still mostly a virtual problem since actual investments in conserving natural capital have remained insignificant. Even worse, companies generally invest much more in strong lobbies to keep environmental regulation to an absolute minimum. If they really believed that conservation would be profitable, there would be little incentive to pursue this lobbying any more.

From quantity of growth to quality of life

The conclusion is clear: natural capital is no practical or realistic solution to integrate nature into the economy or make its values visible. It is a dangerous illusion that will not only worsen but also legitimate the environmental crisis. And while some probably really believe in its potential, most of those at the helm of the current economic system must see on a daily basis that natural capital is illusory.

But by participating in it, they also know that more fundamental questions about the logic of our economy and who benefits from it are not asked. And hence they do not have to provide any answers.

But we do have to ask these questions: should we not start weaning ourselves off an economy predicated on an unsustainable quantitative growth-fetish? Should we not build an economy focused on people, nature and equality rather than one based on putting forth money only to ultimately make more money? Most especially, should we not build an economy focused on quality of life rather than quantity of growth?

With some imagination, the answers are not only straightforward but also practical, logical and truly sustainable.

 

[Bram Büscher: Professor of Geography, Environmental Management and Energy Studies, University of Johannesburg; Research Associate, Stellenbosch University; Professor of Sociology of Development and Change, Wageningen University]

[Robert Fletcher: Associate Professor, Sociology of Development and Change, Wageningen University]

 

Bringing Liquidity to Life: Markets for Ecosystem Services and the New Political Economy of Extinction

Research Gate

January 2016

by Jeremy Walker

 

John_Gledhill_painting_21

The Last Rhino. Artist John Gledhill [Source]

Abstract

This chapter attempts to situate the rise of market-based conservation policy, and its associated theoretical and policy frameworks such The Economics of Biodiversity and Ecosystem Services within a wider history of what might be termed financialisation. Outlining a new chapter in the long history of ontological adjustment of ecological science to dominant accounts of political economy, this chapter explores the emergence of a novel political economy of extinction. This can be analysed in the transformations of theory: the reframing of the sixth extinction crisis within the neoliberal idiom of ‘natural capital’ and ‘ecosystem services’ reflects a history of the reprocessing of political and scientific ecological discourse in order to better accommodate it to reigning economic doctrines. TEEB and other articulations of market-based conservation do little to question the dominant economic theory that has licensed the financialisation of social, political and economic life and led to our current global economic crisis. As a species of power, it can also be analysed in the social connections of the corporate boardroom: where the professional authority, executive expertise, epistemic frameworks and political projects of senior conservation ecologists increasingly converge with those of the worlds most powerful bankers.

Bringing Liquidity to Life: Markets for Ecosystem Services and the New Political Economy of Extinction

Download full-text PDF

[Jeremy Walker is Lecturer in Environment, Culture and Society in the Social and Political Sciences Program. He holds a Bachelor of Fine Arts  from  the University of New South Wales,  a BA Communications (Social Inquiry, Hons) from UTS, and a PhD (History and Philosophy of Science) from UTS. Prior to his appointment at UTS he taught at the Dept. of Government and International Relations at the University of Sydney.]

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.

image-90160912-19269-1r24dco

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”.

image-80160912-19222-1a7ha8x

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.

image-70160912-19262-znlcdj

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?

image-60160912-19228-kul098

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.]

The Bankers at the Helm of the ‘Natural Capital’ Sector

January 26, 2017

by Michael Swifte

 

bankers-at-the-helm

Let’s put a spotlight on four bankers who positioned themselves in the ‘natural capital’ sector around the time of the Global Financial Crisis (GFC). Let’s have a look at some of their networks.

The reason these bankers have positions at the intersection of big finance and the conservation sector is because of their intimate knowledge of financial instruments and what some call “financial innovation”. They follow the edict ‘measure it and you can manage it’. They are the perfect addition to decades of work – as part of the sustainable development agenda – aimed at quantifying the economic value of nature in order to exploit it as collateral to underwrite the new economy.

Banker 1

fullerton_pes_small

John Fullerton is a former managing director at JPMorgan, he founded the Capital Institute in 2010, in 2014 he became a member of the Club of Rome, he has written a book called Regenerative Capitalism.

“No doubt the shift in finance will require both carrots and sticks, and perhaps some clubs.” [Source]

The first of Fullerton’s key networked individuals is Gus Speth who consults to the Capital Institute, he sits on the US Advisory Board of 350.org and the New Economy Coalition board and is good buddies with the godfather of ‘ecosystem services’ Bob Costanza. He has a long history supporting sustainable development projects and has some seriously heavy hitting networks. He founded two conservation organisations with which he was actively engaged up until 2o12, both organisations continue to support ‘natural capital’ projects among other diabolical efforts.

The second networked individual is Hunter Lovins, an award winning author and environmentalist who heads up Natural Capital Solutions and is an advisor to the Capital Institute. She is a long term cheer leader for green capitalism, climate capitalism, and sustainable development.

Banker 2

tercek_pes_small

Mark Tercek was a managing director at Goldman Sachs and became the CEO of The Nature Conservancy in 2008, he has written a book called Nature’s Fortune: How Business and Society Thrive by Investing in Nature.

“This reminds me of my Wall Street days. I mean, all the new markets—the high yield markets, different convertible markets, this is how they all start.” [Source]

One of Tercek’s networked individuals is conservation biologist Gretchen Daily, the person Hank Paulson sent him to meet when he accepted the leadership of The Nature Conservancy (TNC). Daily co-founded the Natural Capital Project in 2005 with the help of  WWF, TNC and the University of Minnesota.

Another prominent figure in TNC is Peter Kareiva, senior science advisor to Mark Tercek and co-founder of the Natural Capital Project, he is also the former chief scientist of TNC and its former vice president.

Taylor Ricketts is also a co-founder of the Natural Capital Project, at the time of founding he was the director of conservation science at WWF. He’s now the director of the Gund Institute for Ecological Economics which was founded by Bob Costanza.

Banker 3

tall-paulson-misconstrued

Hank Paulson is the former CEO of Goldman Sachs, he was US treasury secretary during the GFC, he’s a former chair of the TNC board and the driving force behind the 2008 bail out bill. In 2011 he launched the Paulson Institute which is focussed on China, he has written a memoir called On the Brink: Inside the Race to Stop the Collapse of the Global Financial System.

Even before he was made treasury secretary by George W Bush, Paulson had an interest in conservation finance and greening big business. He was a founding partner of Al Gore and David Blood’s, Generation Investment Management which operates the “sustainable capitalism” focussed Generation Foundation. He has worked with Gus Speth’s World Resources Institute and the Natural Resources Defense Council to develop environmental policy for Goldman Sachs. In 2004 he facilitated the donation from Goldman Sachs of 680,000 acres of wilderness in southern Chile to the Wildlife Conservation Society and in 2002-04 he and his wife Wendy donated $608,000 to the League of Conservation Voters. He has also worked with the second largest conservation organisation on the planet Conservation International.

“The environment and the economy have been totally misconstrued as incompatible,”[Source]

 

“[…] It is is clear that a system of market-based conservation finance is vital to the future of environmental conservation.” [Source]

Banker 4

pavan-maxresdefault

Pavan Sukhdev is a former managing director and head of Deutsche Bank’s Global Markets business in India, he was the study leader of the G8+5  project, he founded the Green Accounting for Indian States Project, he co-founded and chairs an NGO in India called the Conservation Action Trust, he headed up the United Nations Environment Program – Green Economy Initiative which was launched in 2008, he has written a book called  Corporation 2020: Transforming Business For Tomorrow’s World 

Sukdev’s work cuts across more than a dozen UN agencies and scores of international agencies and initiatives. Here are just some of them: IUCN, ILO, WHO, UNESCO, IPBES, WEF, IMF, OECD. Every kind of commodity and economic activity has been covered through his work.

“We use nature because she’s valuable, but we lose nature because she’s free.” [Source]

There are only a one or two degrees of separation between these bankers and the environmental movements with which we are very familiar. Looking at key networked individuals connected to the representatives of the financial elites – bankers – helps to highlight the silences and privately held pragmatic positions of many an environmental pundit. “Leaders” of our popular environmental social movements don’t want to be seen or heard supporting the privatisation of the commons, but they remain silent in the face of a growing surge towards collateralization of the earth. Perhaps they too believe that using nature to capitalise the consumer economy is preferable to the toxic derivatives that precipitated the GFC. Either way the underlying motivation – for anyone who might feel that ecosystem services thinking is useful for the earth – is the desire for the continuation of our consumer economy.

 

nature-bar-code

LISTEN: The Lies They Tell. The Pitiful State of Environmentalism and its Neoliberalization

Wrong Kind of Green

October 29, 2016

The “New Economy” is Not Inclusive

“The route for real change is not via those who are already totally vested in the growth economy and have gained power through it. Rather look for power amongst those who are disenfranchised by the capital accumulating system. Give them voice. Look to organisations that care for them and if they do not exist, create them. Remember that the vast majority are disenfranchised by the current economic system.”

Professor Clive L. Spash holds the Chair of Public Policy & Governance at WU in Vienna and is Editor-in-Chief of Environmental Values. He has conducted research on climate change economics and policy for over 25 years and his work in the area includes the book Greenhouse economics: Value and ethics as well as numerous articles. His critique of carbon trading was the subject of attempted censorship while he was a senior civil servant at the CSIRO in Australia. More information can be found at www.clivespash.org.

[Filmed by Nemnövekedés – Degrowth – Published September 9, 2016]

 

 

Commentary: Greenwash! Now in New Improved Formula [Economic Valuation & Payment for Environmental Services]

The Heinrich Böll Foundation

December 3, 2015

by Clive Spash

 

+++

Comment on Jutta Kill’s “Economic Valuation and Payment for Environmental Services

This report is an excellent overview of the pitiful state of environmentalism and its neoliberalisation.  The issues raised are important and should be taken seriously.  However, I would like to suggest a few areas in which the argument could benefit from some further reflection.

In opening the paper the introduction emphasises the idea of a “paradigmatic change” (p.2) in terms of what is happening with economic valuation of the environment.  There is no further definition of this concept or its relevance, and I think this suggestion of substantive novelty is in fact misleading.  The ongoing push for incorporating aspects of the social and environmental world into an financial and economic one has been ongoing for at least 200 years.  Some seventy years ago, Karl Polanyi (1944), who is mentioned (p.16), identified the creation of the fictitious commodity as being a necessary part of the industrialisation starting in the early 1800s.  He also recognised the extension of this from labour and land to the environment.  The more recent push of the economics profession, for extensive valuation allied to financial regulatory instruments, goes back to the 1960s.  The role of economic valuation in its modern form had already been successful promoted politically under the Reagan administration, which in 1981 institutionalised the use of cost-benefit analysis for evaluating proposed environmental legislation (Presidential Executive Order 12291).  What is new is only the extent to which economic valuation of the environment, and fictitious commodity creation, have since been pushed, and the readiness of various actors to keep pushing ever further.

costanza_meme_pes_small

For the financiers, bankers and corporate capitalists the drive is the necessity of finding new means of exploitation to capture surplus value, as the old ones become exhausted and/or regulated (hence the need to also roll back regulation as Jutta Kill rightly notes as part of the valuation/market instrument game).  However, what about the environmentalists?  Why do the big environmental non-governmental organisations, such as the Nature Conservancy, back this?  Why do so many ecologists back Natural capital, ecosystems services valuation and biodiversity offsets?  Some notably examples are the likes of Gretchen Daily, systems ecologist Bob Costanza (who many now think is an economist!), and the Nature Conservancy’s chief scientist Peter Kareiva.  What about ecological economist Herman Daly who advocates Natural Capital and tradable permits markets, another financial instrument of exploitation?  (For a critique of emissions trading see Spash, 2010.)  One answer is that all the aforementioned are from the USA and all apparently support the existing corporate model of market capitalism, including prices as efficient means of resource allocation.  Of course they demand some side constraints on the existing systems, but they do not advocate any systemic change or conduct any analysis of the political economy.  Their politics appears to be classic American liberal and, despite the contradictions, their economics maintains core tenets of orthodox belief (e.g. prices allocate resources and do so efficiently).

Yet, there is, in addition to this American camp, another group, of what I term new environmental pragmatists (Spash, 2013), that is more broadly based and geographically widespread.  These are the ones Jutta Kill rightly recognises as advocating instrumental valuation of species, such as bees.  They are often also ecologists, but not necessarily in favour of the American way of life or its inherent political liberalism.  Their concern is to be pragmatic because the desire for material wealth and financial affluence now seems to dominate all systems of political economy, and so they believe the expression of value must be as instrumental to those ends.  Their training in an instrumental natural science may be in part to blame, but their political and economic naivety also plays a key role in their belief that they can win the numbers game in a battle with bankers, financiers and big corporations.  Still, once again, I would emphasise that core aspects of this monetary valuation game, for ‘saving’ the environment, are quite old in content.  In the period from 1880 to 1920 over 1000 studies calculated the monetary value of services provided by birds as a means to show their value and aid their conservation, but the new insecticides made the birds’ services (and the valuation exercises) redundant.  The positive “externalities” of birds had evaporated due to technological innovation.

kareiva_pes_small

In the report, the term “externalities” is used repeatedly and highlighted as a key aspect of the economic approach.  This is a highly problematic concept (as the report notes), but also one that is totally misleading as to the issues involved.  There is nothing about pushing costs on to others that is external to the modern economic system of capital accumulation (whether based in Europe, USA, China, Russia, India, Brazil, Australia or anywhere else).  Indeed this is an essential aspect of how the modern economy operates and maximises the surplus that accrues to the minority.  The powerless, women, poor and the environment are there to be exploited as an internal operation of the political and economic system.  There are no errors or need for systems correction.  This is why Karl W. Kapp (1950) called such activities cost shifting exercises, not externalities.  In our critiques, improving the accuracy and meaningfulness of terminology and conceptualisation would help.  So let’s stop using the neoclassical economists’ term “externalities” for something that is internal to the capital accumulating economic system.

tercek_pes_small

Indeed in other places this accuracy of conceptualisation is exactly what is argued for, e.g. with respect to the need to stop calling Nature “capital” and ecosystems functions “goods and services”.  Jutta Kill correctly identifies the capture of the environmental movement by corporate interests and how this has been matched by the conversion of language and concepts in key areas of the natural sciences informing that movement.  Thus ecology and conservation biology have lost their own scientific terminology (Spash and Aslaksen, 2015).

Along the way I would like to note the importance of the point about the impossibility of ever “internalising externalities”.  As the Laws of Thermodynamics make clear, the materials and energy that we put into our economic systems will come out the other side as waste in equal amounts (but different form).  In short all our production and consumption of energy and materials creates problems for the model of perfect resource pricing so beloved by economic textbooks and neoliberal politics.  If we take the economists at their word, then they must admit that all the prices in the economy are wrong and need to be changed, i.e., price ‘correction’ to account for “externalities” would result in full scale technocratic economic intervention, or what used to be called a planned economy.

The links between offsetting pollution and biodiversity loss through markets, or market like mechanisms, also needs to be linked to the model of development that is now prevalent.  That is a model of resource extractivism come hell or high water.  The backing for the extractivist regime, that maintains the resource supply chains for the consumerist society, is the military.  Fear is a key tool of control now widely deployed in our supposed democracies of the West.  Ours is a world of military intervention and domination in which violent destruction of the ‘other’ is totally legitimised daily in the news, media and entertainment.  Nature is no different, if it gets in the way, just wipe it out and explain to those who benefit the necessity of this for maintaining the political and economic system.  As long as the imperial mode of living (Brand and Wissen, 2013) is enjoyed by enough key people, in the right power structure and sections of the segmented society, nothing needs to change.

After having made these provisos, I would like to note that the report hits many nails squarely on the head.  Not least of these is the fallacious concept of Green Growth and its associated Green Economy.  In the end, selling monetary valuation as saving the planet goes along with the current advocacy of economic growth as the solution to human induced climate change (Spash, 2014).  Both are clearly just, a new improved formulae of that good old favourite corporate product, Greenwash.

rebrand 4

 

References Cited
Brand, U., Wissen, M., 2013. Crisis and continuity of capitalist society-nature relationships: The imperial mode of living and the limits to environmental governance. Review of International Political Economy 20, 687-711.
Kapp, K.W., 1950. The Social Costs of Private Enterprise. Shocken, New York.
Polanyi, K., 1944. The Great Transformation, 1st edition ed. Rinehart & Company Inc., New York/Toronto.
Spash, C.L., 2010. The brave new world of carbon trading. New Political Economy 15, 169-195.
Spash, C.L., 2013. The shallow or the deep ecological economics movement? Ecological Economics 93, 351-362.
Spash, C.L., 2014. Better Growth, Helping the Paris COP-out?: Fallacies and Omissions of the New Climate Economy Report. Institute for Environment and Regional Development, Vienna.
Spash, C.L., Aslaksen, I., 2015. Re-establishing an ecological discourse in the policy debate over how to value ecosystems and biodiversity. Journal of Environmental Management 159, 245-253.

 

[Professor Clive L. Spash holds the Chair of Public Policy & Governance at WU in Vienna and is Editor-in-Chief of Environmental Values. He has conducted research on climate change economics and policy for over 25 years and his work in the area includes the book Greenhouse economics: Value and ethics as well as numerous articles. His critique of carbon trading was the subject of attempted censorship while he was a senior civil servant at the CSIRO in Australia. More information can be found at www.clivespash.org.]

The Political Economy of the Paris Agreement: Preserving the Existing Social & Economic Order

Real-world Economics Review, Issue no. 75

The Political Economy of the Paris Agreement on Human Induced Climate Change: a Brief Guide

By Clive L. Spash [Vienna University of Economics and Business, Austria]

 

truth

 

Excerpt:

Technological optimism is at the core of the IPCC projections and the assumptions that inform the Paris Agreement. On publication of the IPCC 5th Assessment report the official press release quoted the Chair, R.K. Pachauri, as stating that:

“To keep a good chance of staying below 2ºC, and at manageable costs, our emissions should drop by 40 to 70 percent globally between 2010 and 2050, falling to zero or below by 2100.”

The latter is the new rhetoric of negative emissions that relies on imagined future technologies (e.g. biotechnology, geoengineering, carbon capture and storage). The press release also reports the findings of Working group III as showing that:

“…mitigation cost estimates vary, but that global economic growth would not be strongly affected. In business-as-usual scenarios, consumption – a proxy for economic growth – grows by 1.6 to 3 percent per year over the 21st century. Ambitious mitigation would reduce this by about 0.06 percentage points.”

This major transformation of the energy basis of the economy in fossil fuels is floated in the press as having no real impact on economic growth without anyone raising a qualm. In fact Lord Stern and colleagues have been arguing that economic growth will be boosted by the energy transformation to a “new climate economy” (GCEC, 2014). Elsewhere, I have discussed some of the many fallacies of this Green Growth argument and noted the connection to a power elite (Spash, 2014). Yet this is now the dominant international position and hope of the Paris Agreement.

The whole of Article 2 is qualified by the phrase: “…in the context of sustainable development and efforts to eradicate poverty”. As I have noted elsewhere (Spash, 2016), the Paris Agreement cannot be read outside the context of the, October 2015, UN Resolution A/RES/70/1 “Transforming our world: The 2030 Agenda for Sustainable Development”, which promotes economic growth, technology, industrialisation and energy use. Goal 8 is to sustain per capita economic growth at a rate of “at least 7 per cent gross domestic product per annum in the least developed countries”. The environmental devastation this would entail is meant to be addressed by the “endeavour to decouple economic growth from environmental degradation”, which is meaningless unless undertaken in absolute terms and that is simply impossible for the industrial economy being promoted in Goal 9. The Paris Agreement follows suit and claims that: “Accelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development” (Article 10).

The ultimate concern is the threat to economic growth and this is a perspective that has been heavily lobbied for by advocates, such as Stern, of the new climate economy under the banner “better growth, better climate”. As they state: “In the long term, if climate change is not tackled, growth itself will be at risk” (GCEC, 2014a, p.9). The climate can and will be changed, but growth must not be threatened.

The negotiations around human induced climate change reveal the tensions and contradictions of the resulting policy. There are those who argue for more and better growth spurred on by new technologies to be developed via innovative corporations (GCEC, 2014). This is to be funded, as usual, by massive public investment that will ‘leverage’ private finance, or in plain terms subsidise corporate profit-making while pretending to remove market imperfections. Advocates are heavily invested in preserving the existing social and economic order as evident by the elite networks of the 1% within which they operate (Spash, 2014). The hope is for new miracle technologies to allow moving pollutants from the air to the soil and water, and reliance on treating the Earth as a mechanical toy for boys to (geo)engineer. The economics profession with its macroeconomic obsessions over jobs and growth is living in a fantasy world without any biophysical reality and merely plays along with this techno-optimist tune, and unfortunately the heterodoxy has so far done little to alter this.

The targets of Paris are not some simple internalisation of an externality that is messing-up the perfectly functioning market system. If taken seriously they are a call for a major transformation of the global economy away from its foundation on fossil fuels and energy intensive systems. As the UNFCCC’s Director for Strategy has stated:

“The objective is to put in motion a fundamental transformation in the way we use and produce energy, how we plan our cities, how we manage land and how we prepare for a changing climate and cooperate to minimise its disruptive effect. Transformation takes strategy. You need to know your destination if you are serious about reaching it” (Thorgeirsson, 2015).

Yet, while the need for transformation is now widely recognised, this is generally interpreted as being totally consistent with maintaining the same social ecological and economic structure as today. That is a structure of social inequity, ecological exploitation and an economy promoting hedonistic materialism supplied through a system of corporate and State capital accumulation. The politics of human induced climate change go to the heart of the modern industrialised capital accumulating economy and the rhetoric of growth as supplying development and progress. In the end the Paris Agreement changes nothing. The destination is the same old growth economy and that is in total contradiction with addressing human induced climate change.

Download the paper:

Clive L. Spash, “The political economy of the Paris Agreement on human induced climate change: a brief guide”,
real-world economics review, issue no. 75, xx June 2016, pp. xx-xx,
http://www.paecon.net/PAEReview/issue75/Spash75.pdf

 

[Professor Clive L. Spash holds the Chair of Public Policy & Governance at WU in Vienna and is Editor-in-Chief of Environmental Values. He has conducted research on climate change economics and policy for over 25 years and his work in the area includes the book Greenhouse economics: Value and ethics as well as numerous articles. His critique of carbon trading was the subject of attempted censorship while he was a senior civil servant at the CSIRO in Australia. More information can be found at www.clivespash.org.]