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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

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

January 26, 2017

by Michael Swifte

 

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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

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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

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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

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

The Heinrich Böll Foundation

December 3, 2015

by Clive Spash

 

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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.

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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.

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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.

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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.

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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 Dying Planet Index: Life, Death and Man’s Domination of Nature

The White Horse Press

Environmental Values 24 no.1: 1-7, 2015

by Clive Spash

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Excerpt:

During my time working in Australia for the Commonwealth Scientific Industrial Research Organisation (CSIRO) I visited a nondescript building on the rural work site outside Canberra. This restricted access building held the Australian National Wildlife Collection. What the building in fact held was the preserved dead bodies of species, some of which were extinct. The curator was especially pleased at having collected rare specimens. He told of finding one such for sale in a rural market and how he proceeded to order more from the vendor so other collections around the world could have a specimen as well. That this egalitarian act on behalf of collectors would have wiped out the last remnant of a species did not seem to have crossed his mind. Looking at the bottles of rare pickled amphibians and drawers of compressed and preserved bodies of birds was for me a bizarre experience. In this mortician’s chamber the careful cataloguing of decline was ongoing but with some kind of abstraction from the reality of it all. There was nothing wild here and certainly no life. The Australian National Dead Animal Collection would certainly have been a more accurate and truthful description.There was nothing wild here and certainly no life. The Australian National Dead Animal Collection would certainly have been a more accurate and truthful description.

I was reminded of this incident by publication of the Living Planet Index (LPI) measuring the abundance of more than 10,000 representative populations of mammals, birds, reptiles, amphibians and fish. In the most recent report this had decline by 52 per cent since 1970; that is, ‘in less than two human generations, population sizes of vertebrate species have dropped by half’ (WWF 2014: 4). The statistical decline of species on Earth is another reminder of how humanity watches, observes and statistically enumerates the ongoing destruction. Like the CSIRO collection, the LPI is not a measure of life but rather the death toll relating to human appropriation of resources for human ends. Presenting death as life seems to fit well with the optimistic messages in the rest of the WWF report, which finds an organisation that was once concerned with wildlife now stating ‘we love cities’ because urbanisation is becoming the dominant form of human lifestyle. Meanwhile they treat Nature as capital that is valued for supporting production to provide new greener consumption possibilities and financial rewards. This is the economic discourse now common amongst the environmental non-governmental organisations (ENGOs). The contradictions of supporting extractivist capital accumulation and consumerism while wanting to conserve Nature are reconciled as easily as calling death life.Like the CSIRO collection, the LPI is not a measure of life but rather the death toll relating to human appropriation of resources for human ends.

The ongoing decimation of the natural world is now reaching such heights that the term Anthropocene is being put forward as encapsulating the overwhelming influence of man on natural processes. You might expect this to raise concern over stopping abusive and unthinking advance of economic growth and technology and promoting the need for precaution. However, Baskin opens this issue by describing how the urgency of problems is being used by an elitist expert grouping to promote the rapid implementation of global management and high-tech ‘solutions’ bypassing democratic institutions. This same approach is reflected in the Better Growth, Better Climate report (GCEC 2014), which recommends strong economic growth stimulated by public investment in new technologies and deregulation to aid corporate innovation (Spash 2014).

In a strange twisted logic the dominance of man and his destruction of the environment via technology and industrialisation changes from a negative to a positive. Rather than ignorant and unthinking innovation risking life on Earth this becomes man controlling everything. Here man may be taken as meaning male because this discourse strikes me as highly patriarchal, with the overt goal of dominating and controlling all that Nature represents. As Baskin explains, the Anthropocene is for many a modernist triumph signalling the final dissolution of Nature because everything is now man-made.

Download the full editorial here.

 

[Clive Spash is an economist who writes, researches and teaches on public policy with an emphasis on economic and environmental interactions. His main interests are interdisciplinary research on human behaviour, environmental values and the transformation of the world political economy to a more socially and environmentally just system.]

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