I am in two minds whether to buy Tony Juniper’s new book, What nature does for Britain. On the one hand I think it will be well written and entertaining with lots of good examples of positive action for nature. On the other I will struggle to get past the fundamentals, that we need to place an economic value on nature, in order to “save” it.
The development of Natural Capitalism is making me feel increasingly uncomfortable, the more so when I hear so many stating that we have no choice, we must adopt the language of economists (especially free-market economists) in order to be able to persuade those economists, or Treasury civil servants, or politicians, or whoever, that nature is important.
I am still struggling to put a rationale together to justify (post hoc) what is a visceral feeling. But here are couple of things I have come across, which I wanted to share. The first is from Classical Economics: Gresham’s Law. Gresham Law states that bad money will push good money out of circulation. It’s similar to the “race to the bottom”, whereby without regulation, cheap unsafe products will drive out more expensive, better products that are safe and have been produced under better conditions for workers, society and the environment.
Gresham’s Law applies specifically to the amount of precious metal in coinage; without regulation (coins with less eg Silver in them than they should have (bad coins), eventually completely replace the coins with the right amount of Silver in them, because it is more profitable to keep the “good” coins, melt them down and sell the Silver.
Can this law be applied to the notion of natural capital? Well, radical thinker Gregory Bateson sought to apply it to the evolution of ideas, arguing that simplistic ideas would drive out sophisticated ones. I would suggest that the risk with Natural Capital approaches is that delivery of ecosystem services will be achieved by the lowest necessary value ecosystem. While an ancient woodland might be a very good carbon store, a newly planted conifer plantation stores more carbon more quickly, and so will outcompete the ancient woodland for carbon credits, or whatever monetary system is being used. The non-use value of the ancient woodland (its history, its meaning, its beauty) will be undervalued.
The second thing is the Tainted Altruism Effect. This is best examplifed by the story of Daniel Pallotta who was reviled for raising $300M AIDS research. Reviled because he was paid $400,000 a year. Our psychology seems to treat people like Pallotta who appear to be acting altruistically, while actually creating significant benefit for themselves, as immoral, even though he raised massive amounts of money for an altruistic cause.
People support the conservation of nature because they believe nature is essential to our lives, for all sorts of reasons. I believe, generally, people do not value nature from an economic perspective, in their everyday lives. Who hears a Robin sing and thinks either a) that is worth a lot of money or b) it’s important that we place an economic value on that Robin so we can help prevent it from being killed/displaced. No, people value it for a wide variety of reasons, but not economically.
The Tainted Altruism Effect suggests that the introduction of economic value into a system which depends far more on aesthetic, spiritual or cultural values, taints those values and diminishes them. Using arguments about the economic (monetary) value of nature may actually put people off supporting action for nature, because they feel that action is tainted by the idea that someone is going to make a profit from it; and nature is not something that should be considered as just another asset class.
Now of course people make profit from nature all the time – arguably all profit is derived from nature. But the difference between a farmer deriving profit from nature by producing a crop, even if that crop is damaging to nature, and a charity encouraging profit to be derived from nature, in the name of conservation, is the Tainted Altruism Effect.
Interesting post. Made me think about biodiversity offsetting, which straddles (rightly or wrongly) both concepts.
All the best,
thanks Jason. Yes Biodiversity Offsetting sits at the dark heart of Natural Capital.
We do not need to place an economic value on nature in order to ‘save it’
How about bashing a few heads together…knock some sense into humankind…ggrrrr
Thanks Miles 😉
thanks Penny. It’s certainly a tempting approach to adopt….
I think anyone worth their salt will be asking questions about the validity of natural capital – and it isn’t dyed in the wool environmentalists. Check out Richard Spencer’s talk at the Valuing our Life Support Systems Summit – https://www.youtube.com/watch?v=umWiR3LWMnA I think you will find a lot of common ground and food for thoughts within Richard’s speech.
Having worked briefly in this field, I am open to it being regarded as a cul de sac in due course, but the person who takes us beyond natural capital thinking, will need to address the issues Schumacher raised in Small is Beautiful. He identified that businesses (and in fact it is all of us) operate their balance sheets blind to the natural world. Businesses which trash the environment are currently seen as successful, whilst those that don’t are failing.
All arguments I have yet seen that dismiss Natural Capital effectively give a pass to damaging businesses to keep on damaging.
You need to move beyond the visceral dislike – Paterson’s decision on killing Badgers is visceral-based decision making. What matters is what works – I don’t think we can yet judge this on Natural Capital.
Where I think Natural Capital will face its biggest challenge, is over social justice. At its heart Natural Capital is about issues of Prisoner Dilemma, and Prisoner Dilemma is one of social injustice. The Natural Capital field needs strategies for dealing with Prisoner Dilemma more than it needs it a very detailed inventory of our resources and benefits.
thanks David. I think I am moving beyond the visceral dislike into the rational reasons for objecting to Natural Capital, hence this post on some general principles which have already been developed in other fields.
I won’t attempt to teach you to suck eggs, but as you say, all nature has an economic value. Whether we like it or not. that value is more usually expressed as the cash received for the tradable value of the raw materials (timber, stone, minerals, food, horns, skins) or the value of the space occupied by nature so we can replace it with something else (solar farms, roads, houses etc).
I see no reason why we can’t use that system when it suits us, and then make a different argument when we know the economic one won’t work. For instance, keeping 1000 sheep happy on a moorland involves draining and damaging millions of tonnes of peatland. We can argue (without risking an appreciation of the inherent and priceless aspects of moorland) in a straightforward way that it is simply bad economics to damage the carbon worth £Ms stored on moorlands to yield a few thousand in lamb sales each year. This argument has been used successfully to change agri-env policy.
Other examples exist too, and I’m sure everyone involved in the nature game can cite a few. But that doesn’t mean we always have to place an economic value on nature. In fact, valuing many ecosystem services is nonsense and counter productive, as no-one is ever going to pay for something we get for free or going to be convinced not to trade common services for private profit.
I think the trick is to use natural capital and values for nature when it suits us and will achieve better protection of nature (e.g.influencing wider policy), and then stop using it when its not going to affect the outcome (e.g. individual planning decisions). I have no problem with being inconsistent. The war of attrition against nature is so embedded in our societal system that I’m happy to use every tool available. I’m not sure we have the luxury of maintaining a system of conservation ethics and logic when we live in a profoundly illogical world.
Thanks – I can see your argument, but the danger is that the tainted altruism effect comes into play, when we do try and cherry pick the times and places to use conflicting ethical positions. The risk is that we are the ones that are having the trick played on us, and not vice versa.
Makes me think of a conservation charity that has public fund raising and non-voting membership, but also has a corporate sponsor with planning / development interests in protected public asset sites. The charity becomes tainted by not speaking out against their corporate sponsors adverse commercial interests that are at odds with the charity objectives…
thanks Daniel – did you have a particular charity in mind?
The next World Forum on Natural Capital will be held on 23-24 November 2015 in Edinburgh. The World Forum on Natural Capital is run through Natural Capital Scotland Ltd, a wholly owned trading subsidiary of the Scottish Wildlife Trust. I guess there is money to be made by the Scottish Wildlife Trust in just talking about Natural Capital.
thanks Mark – that’s interesting.
I know Jonny Hughes, who I see is now Chief Exec of Scottish Wildlife Trust, is a big advocate of natural capitalism.
I suspect there is some sort of parallel to be drawn here with “Art For Art’s Sake”, public realm art and the economic benefits that, apparently, arise from that (at least when it’s appreciated!), and the “Emperor’s New Clothes” absurdities of the global art market; but I’ve too much on at the minute to think it through. I raise it in case someone out there has a better knowledge than I do – currently at least.
‘Natural Capital’ spawns its poisonous offspring ‘biodiversity offsetting’. Herefordshire Council wants to build a controversial bypass around Hereford (to be paid for partly by selling planning permission to volume builders) that will transform the countryside to the south and west of the city. The county wildlife trust “in partnership with EA and NE” is promoting a “Living Landscape” project to restore the lower river Lugg on the north and east of the city. One of the “anticipated benefits” of the project’s scoping document is stated as follows: “habitat improvements could mitigate and offset biodiversity losses caused by the Hereford western bypass”. This wording implies that road scheme has already been approved when it is scarcely at the design stage! Conservationists have never been good at politics. I’ve ask the Trust to remove this piece of poison but whether their ‘partners’ with agree remains to be seen.
Thanks David. I would agree – biodiversity offsetting and the consquential introduction of a market in tradeable offsets is a very good example of where natural capitalism takes us.
Miles, you point out, quite rightly, a couple of reasons why natural capitalism will not work perfectly. But then, ‘capital capitalism’ doesn’t always work smoothly either (2008-2013 anyone?). So on the one hand, yes, natural capitalism is likely to be a very imperfect approach. But on the other it seems to me that nature and biodiversity currently suffer badly from the lack of some kind of common language that enables our political process to better evaluate the pros and cons of development projects versus the biodiversity destroyed. In principle, and in theory, natural capitalism could help with this.
On top of your concerns I would chuck in that of adequate definition and measurement. In many, if not most, markets for products and services it has proved necessary for society to make considerable efforts to define standard units of quantity (e.g. paces to millimetres) and quality (e.g. BSI standards) to facilitate prices to be set and accepted with confidence. Solving the problem of debased coinage was a relatively straightforward example of this. But these markets deal with entities that are considerably simpler and more tangible than the long term value to mankind of nature. (Even if you couch the issue in such a self centered way, which ignores our responsibility to not trash the planet.) To me, this is a fundamental challenge to overcome.
thanks very much Steve. I agree – as traditional capitalism has so evidently failed to prevent mankind from creating our very own Mass Extinction event, one wonders who could imagine that it would be a good idea to apply the same principles to protecting nature.
As to whether we have solved the problem of debased coinage or not, Gresham’s Law appears to be alive and kicking, not least in the way that Quantitative Easing has led to banks printing money to prop up devalued collateral http://systemicriskandsystematicvalue.blogspot.co.uk/2013/09/unwinding-of-qe-and-collateral-problem.html. At least I think that’s what it said!
I am currently conducting academic research on tainted altruism and wether perceptive altruistic actions are affected by environmental factors. and whether they are harsher in judging their actions. the link will take you to the questionnaire it will only take 5 min and is anonymous
Could you let me know the findings of the study, as it’s something I’m very interested in.
hey yea of course, if you could possibly help spread it further i need another 50 participants that would be great.
ok well I’ve tried to convey it in 140 characters on twitter. Not sure how well it came across!
great thank you i will get back to you once ive collected the necessary data 🙂