A couple of weeks ago I was invited to a seminar, organized by UofT’s School of the Environment, on the 33rd floor of the TD Tower in Toronto. Given the nature and content of the lecture I gave for the Robert Hunter Memorial lecture last April Fool’s Day, I was a bit mystified as to why I would be invited to a seminar on natural capital. Here’s what the invitation said, in part:
A bit of background first. The idea of Natural Capital actually has its origins in the ecology and conservation movements. The original idea was that calculating GDP based only on what we humans earn and produce doesn’t account for an enormous part of the total value of a given economy. Things that are not included in that calculation but are nonetheless a source of GDP 
value, are called externalities. Calculating and including natural capital was a way of putting the role that nature plays in overall wealth and well being into consideration. This generates a conversion from nature to dollar value. That value is at best a projection and was not intended as a market based financial value. And while I get that we need to be able to speak a common language if we are to get anywhere on the environment, I am not so sure that the wholesale adoption of the language of corporate domination is the right way to go. This point was made clear to me when, as happened in the seminar on the 33rd floor, the call rang out: “I’m a broker, I get the point about Natural Capital, but where’s my cut?”
Here’s what the invitation to the seminar said:
Natural Capital is an emerging topic gaining great interest with the business and accounting communities. The academic community has long advocated that society is not according appropriate value to the wide range of ecological goods and services provided by Nature – services such as water regulation, air quality, carbon storage, habitat, and food production, among many others.
This seminar is designed to give a broad overview of the many types of goods and services provided by Nature and approaches to placing a financial value on them. Innovative approaches to financially valuing the natural world is already underway and affecting the way that many businesses manage their supply chains and create social license to conduct their operations. It is hoped that by establishing more formal ways to both holistically value and account for Nature’s services, society may be better-positioned to understand the true costs and trade-offs associated with managing and sustaining so many of the world’s finite natural resources.
I think it is important that we get the order of things clear here. First comes the business and accounting communities, then, on their well tailored coat tails, academia. Business understands value, goods and services. Academia thinks we are not according appropriate value to Nature’s stock of goods and services. Not to get too technical on this, but in logic this is known as an equivocation. Nature does not provide goods and services — companies do that. And value, in the financial and corporate sense being used here, has nothing to do with the value of nature. One of the presenters asked what the value of a sunset in Gatineau Park was. An audience member said, “priceless”, which was met with a chuckle, a dismissal and then an accounting of the cash required to drive your car to the park, take time off work if you want to see it at a particular time, etc.
The value of nature is its unique ability to create and sustain life, which is a quality, not a quantity. The value of goods and services are market driven, based on supply and demand. Nature ‘provides’ only what can be used appropriately for the maintenance of life, “[the forces of nature] converge to strike a rough but effective balance”, Bob once wrote. The supply is pretty much equal to the demand, and where the demand outstrips supply the law is brought to bear. And let’s keep in mind that, as Bob points out in The Enemies of Anarchy, ”Natural laws are not open to interpretation, there is no recourse to a higher court, and no species can violate biological law without paying by the death penalty.” David Suzuki put a similar sentiment forth, 44 years later, in a 2014 interview with Bill Moyers.
Suzuki said:
The idea of capitalism, free enterprise, corporations, markets, these are not forces of nature for heaven’s sake. But you talk to a neo-liberal and you say economy, the market and they go: oh, the market! Praise the market! Free the market! It’ll do — we invented the damn thing… [We] act as if these are forces of nature. You know, there are some things in nature we have to live with. Physics, chemistry, biology…
But why is it [that] we bow down before human-created ideas? We can change those things. We can’t change our dependence on the bio-sphere for our wellbeing and survival. I just, I don’t get it. If it ain’t working, change the darn thing.
There was and is no doubt in my mind that the people presenting their ideas at the seminar are in earnest about nature. This is part of a dialogue that has been going on for a long time. Their intent is not at issue — they believe, to a person, that we need to place monetary value on nature in order to get nature to become an important consideration in our world. But my fear is that once the value has been set, the market manipulators and financial wizards will begin the task, equally earnest, of wringing every last cent out of nature. David Suzuki is right here, ‘the market’ is not free — it has its dependencies as well. It depends, for example, on complicit governments bailing out industries when they manage to screw up their own work so badly that it threatens everyone’s well-being. ‘The market’ depends on subsidies funded from the public coffers to make the manufacture of goods viable in ‘the market’. Planes just cannot fly if the cost of the fuel they use is not ‘gifted’ to the airline companies with a huge subsidy and tax ‘incentives’ (read: tax breaks). We too are complicit here, we want to go to Florida, Six Flags, the Rockies, Banff. And why? To forget the damage we are doing at home I imagine. The free market is a myth that helps economists, environmental or otherwise, accountants, brokers and dealers stay in business. If it were truly free, not even the 1% could afford the actual cost of what they consume, externalities included.
And this was the crux of it — Nature is being cast as an externality in economic productivity. One example illustrates the point. The environmental economist from the TD Bank explained that the Fraser Valley in British Columbia, Canada, has a natural capital value of 500 million dollars per year. How this number is arrived at is telling and should serve as a warning against the practice. All expenditures in terms of recreation, tourism, site seeing and the like (the goods) are part of the number, but more importantly, the eventual cost of repair to damage caused by the destruction of the environment are also included. What this means is that if the trees that help regulate and control run off from winter snows and spring rains (the services) were removed the cost of repair due to the resulting flood damage is a calculable number, and I dare say that it is a larger number than the ‘goods’ side of the equation. The warning herein is that we live in a world where those with the greatest share of the financial resources fully believe in the total privatization of the natural world ‘for its protection’. They are also the people and organizations that are the guiltiest of environmental degradation — that’s where the money came from in the first place. Now if these people and organizations own the forests and waterways, they will have no qualms about holding them hostage once the society deems natural destruction unacceptable. If it is worth 500 million a year, they will want their 10 or 15% per year to ‘manage’ the resource.
Yes, it is alarmist, but it is time to sound the alarm. In 1968, Lyndon Johnson sent a report to congress pointing out that the U.S. comes some 315 billion gallons of water per year, and that population and industrial increase and expansion will require 4 to 5 times that amount by 2020, but he was actually wrong in this. It’s just past mid-2015 and the U.S. currently consumes 355 billion gallons, not per year, but per day! Lyndon was probably pretty worried about his projection. We should be terrified about the reality. Today, of the 37 largest aquifers on the planet, 21 have broken the sustainable tipping point according to a report out a couple of weeks ago from NASA. But let’s not get bogged down in stats. I have been updating the information in Bob’s book lately, and it is not fun. The point is that unless we stop consuming so much of the world’s production, the demands on resources will only increase, especially if we don’t talk about it openly. If we keep quiet, if we let the corporations and their representatives, sometimes called our elected governments, take over the language of environmentalism, they will. This conversation needs to be conducted across society, not from the top down, or rather, from the back room out.
We depend on Nature for our survival, Nature does not depend on us for its survival!