Nature for sale. Because trade in ecosystem services can save our planet

A few years ago, International Monetary Fund economist Ralph Chamy was on the Cortez Sea on the same ship with researchers studying blue whales. Before that, he knew nothing about whales, but meeting them in the wild was on his wish list – and when Chami saw the first blue whale live, something changed forever inside him. It was a large female, 30 or 35 meters long, with a mouth so large that it could easily fit an elephant. This kite could throw Tsami and explorers into the sea with a single blow of its fin. But he was feeding peacefully next to their small boat. For a successful economist, however, this experience was what he lacked all these years he spent in the meeting rooms and behind the computer screen and had difficulty controlling his emotions.

In the evening, Chami listened to the researchers’ stories about the huge amount of carbon that whales consume during their lifetime. Ralph wondered: why is this information still unknown to the general public? In his opinion, the scientists spoke a language that humans could not understand with enough money and power to save the whale populations. This led Chami to express the value of individual whale populations and entire ecosystems in dollars. In 2019, he and his colleagues published their thoughts on the economic value of whales in the IMF’s iconic magazine Finance & Development. Chami listed all the services that a whale offers to mankind: during its lifetime (about sixty years), the animal absorbs about 33 tons of carbon dioxide, attracts tourists who spend money, produces useful substances with which other fish feed. – and it turned out that a whale costs about $ 2 million.

But why consider the whale, as well as the ocean where it lives, as service providers? Chami happened that most of the benefits of biodiversity are not at all obvious to those who make decisions about the use of natural resources. However, if a living whale is actually much more expensive than a whale killed for meat and fat, then why not evaluate other ocean dwellers and even entire ecosystems? In 2019, Chami launched the Blue Green Future, whose mission was to assess the market value of ocean life, from whales to grasslands.

Of course, nature as a whole can not be fully expressed in economic terms. As with life insurance policies, for example, purchases can only take into account those aspects that can be converted into money. The value of a person’s life is far greater than his assets and income – in the same way, the assessment of nature’s benefits does not reflect its non-economic values, that is, everything that can be considered the basis of the transcendental and spiritual on our living planet.

I recently spoke with Chami and Dina Nyburg, psychologist and co-founder of Blue Green Future, about how a “nature-based economy” can save the world’s oceans, the limits of science-based and risk-based environmental care, and the benefits of using markets to combat climate change and biodiversity loss.

– First of all, I wanted to ask why do you consider it important to evaluate living beings, whether it is an ecosystem or an individual animal, in terms of money?

DN: If we want to survive as a species, we must change our relationship with nature. Instead of a resource, it should be seen as a purchase of services. We argue that humans can create a market for ecosystems. This will increase our commitment to nature conservation and bring benefits to local and indigenous peoples who, in this way, will also be able to contribute to both the protection and restoration of their habitats. Otherwise, we will just continue to destroy, exploit and destroy ecosystems.

R. Ch .: On the other hand, we all appreciate the vibrant and rich nature. The ocean is valuable because it is extracted from it. This means that if you catch and kill a whale for food, you will earn from $ 40,000 to $ 80,000. So when people say, “Oh, you put a price on nature,” I say, “No, you put a price on nature, and it’s zero for you.” I try to say that nature costs us much more.

– How much would you value the ocean, given that much of both the biodiversity of the oceans and the structure of the deep-water world have not yet been discovered?

DN: As in any ecosystem, we start with the known scientific data, from which we create economic estimates. In the case of an entire ocean, scientists usually know how much carbon it absorbs, and since we have a carbon market, we can get a great price for the “services” the ocean provides. Then the parameters of the ecosystems in the ocean must be measured.

So what is the approximate number?

R.Ch .: The value of maritime services is in the tens of trillions, if not more. For example, if we talk only about carbon sequestration from 1870 until today, the cost of this service is close to 30 trillion dollars. Another example is marine plants. In a report presented at UNEP / GRID-Arendal, we estimated the algae carbon sequestration worldwide at over $ 2.3 trillion.

How will these “natural” markets work and how do they differ from existing efforts to reduce carbon emissions or preserve the environment?

R.Ch .: All of these “living systems” – whales, elephants, trees, mangroves, marine plants, salt marshes, algae, peat bogs – can capture carbon from the atmosphere and absorb it. And then there is the deep ocean, which we are currently working on for evaluation, and it could absorb more carbon than you think.

The value of the carbon capture provided by the forest far exceeds the profit from its timber cutting. The same is true of salt marshes, marine plants, mangroves, but no one knows, because no one has ever valued these ecosystems in terms of money. We are used to a large number of natural resources.

Many countries and companies have committed to becoming carbon neutral by 2050, creating demand for carbon offsets. In this way, carbon sequestration can be sold, for example, to mangroves. If you have a community that has mangroves that it protects, it can sell carbon offsets to companies that need it. The company compensates for its carbon footprint by paying money to the community to help maintain mangroves and provide them with income and employment. So it’s not just a game. In fact, you are investing in biodiversity.

“Why not invest more money in traditional coal conservation methods?

R.Ch .: Maintenance has always been very expensive. You reach out and beg for money to take care of the planet. But money is never enough, which is why it is so rare to save elephants or whales – or nature in general, for that matter. Our idea overturns the whole system: nature conservation becomes profitable. Before that, conservation was a concern for activists, scientists and politicians, but not markets. We have opened up a world where $ 16 trillion can be invested and progress will be made very quickly – faster than any government could do.

“However, valuing nature in terms of money involves some risks. How, for example, can the privatization of public resources be avoided?

R.Ch .: Yes, there is a risk. If natural capital is privatized, global inequality will become a hundred times worse than it is now, and that worries us. It would be disastrous. The so-called carbon cowboys go to countries with weak governments and buy nature – land, mangroves, marine plants. Then they wait for the price of coal to rise and sell it. So they rob the locals. Both local communities and indigenous peoples should never sell their assets – they should charge rent to take care of their physical assets.

What else needs to be done for the natural economy to work?

R.Ch .: Three things are needed: science, proper valuation and a policy that will provide the legal ownership of a natural good. Why invest in stocks and bonds? Because they are legally recognized instruments. How do I invest in a whale? Is it valuable? Yes, it costs $ 2 million. But is it recognized by law? Political action is needed here. Once you do this, it will become an economic asset of the countries or communities that own it.

Imagine a ship passing through a protected sea area and suddenly a magnificent thirty meter whale closes its path. The captain is late with the delivery of his cargo and thinks: “Should I stop? What will happen to me for this? If nothing stops him, he will inject the whale and kill it. Now imagine that the country where the whale swims has imposed a fine of $ 3 million for its murder. Then the captain will say: wait, maybe I can change direction or at least slow down, and it will cost less than a dead whale.

But that is not all. The ship’s insurance company will add: “Hi, when we drafted the contract, there was no $ 3 million worth of water in the water that you could destroy – which means we did not know the whales were an asset. And now we will either terminate the contract or install a device on your ship that will prevent you from colliding with a whale. So when you make a political decision to value nature, the market takes it and scales it.

Critics warn that coal markets do not guarantee the protection of ecosystems everywhere, nor do they guarantee the systemic changes needed to move away from fossil fuels. For example, a mining company that wants to pollute a particular river can “compensate” for the damage by paying someone to repair another river. Or a fossil fuel company could encourage consumers to maintain carbon-neutral emissions and start paying for carbon credits to offset emissions from their gas-powered aircraft or car. How can you ensure that the introduction of physical economics will not make things worse?

R.Ch .: We would not have this discussion if nature were okay. Unfortunately, this does not happen and we do not love nature enough to take good care of it.

Does your bathroom have a bathtub? Tap water drips into the tub and fills. Your bathroom is the atmosphere, it is full of carbon dioxide and more is thrown out of the tap. So, even if all the companies stop burning fossil fuels tomorrow and we all turn to solar energy, the bathtub will be full – and in the end we will all burn to death. Nature is designed simply to drain water from this bath. Closing the tap is another problem. These two problems must be solved with different strategies designed to address each of them individually.

DN: It is clear that we have not reduced our emissions sufficiently. We need all the possible mechanisms to reduce the levels of carbon in the atmosphere. Countries and companies must begin to reduce their emissions, and great efforts must be made to restore our planet’s atmosphere. Until we make every effort to preserve the world’s largest ecosystem, the world’s oceans – alive, functioning, full of marine life, we will simply watch the development of an economy that depletes and destroys the natural basis of our lives.

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