Criticism on the Natural Capital Agenda and Biodiversity Offsets
George Monbiot has presented a detailed (however mostly negative) analysis of his criticism on the Natural Capital Agenda (in the UK) including Biodiversity Offsets as one part of it at his annual lecture at the Sheffield Political Economy Research Institute. The transcript of his speech was published in his weekly column for The Guardian (see below). I will cite some of the main points of his reasoning.
Arguments against the Natural Capital Agenda and Biodiversity Offsets
Monbiot gives the following four arguments (with rising significance) against what he calls the “Natural Capital Agenda” underpinned with different examples, one of them being biodiversity offsets.
- pricing nature is nonsense because the numbers are not reliable
- Unbundling ecosystem services and trading them separately means damaging the holistic system of nature
- the power of the economic system as a whole against the power of nature
- Problem of values and framing: taking the position of the opponent (the monetisation of nature) means loosing the own values (instrinsic vlaue of nature)
The Natural Capital Agenda: the pricing, valuation, monetisation, financialisation of nature in the name of saving it
Monbiot starts off with giving arguments from supporters of the Narural Capital Agenda. He refers to two points: giving a value to nature and raising money to save it:
“Those who support this agenda say, “Look, we are failing spectacularly to protect the natural world – and we are failing because people aren’t valuing it enough. Companies will create a road scheme or a supermarket – or a motorway service station in an ancient woodland on the edge of Sheffield – and they see the value of what is going to be destroyed as effectively zero. They weigh that against the money to be made from the development with which they want to replace it. So if we were to price the natural world, and to point out that it is really worth something because it delivers ecosystems services to us in the form of green infrastructure and asset classes within an ecosystems market (i.e. water, air, soil, pollination and the rest of it), then perhaps we will be able to persuade people who are otherwise unpersuadable that this is really worth preserving.”
They also point out that through this agenda you can raise a lot of money, which isn’t otherwise available for conservation projects.”
“These are plausible and respectable arguments. But I think they are the road to ruin – to an even greater ruin than we have at the moment. Let me try to explain why with an escalating series of arguments. I say escalating because they rise in significance, starting with the relatively trivial and becoming more serious as we go.”
Pricing nature is nonsense because the numbers are not reliable
“Perhaps the most trivial argument against the Natural Capital Agenda is that, in the majority of cases, efforts to price the natural world are complete and utter gobbledygook. And the reason why they are complete and utter gobbledygook is that they are dealing with values which are non-commensurable.
They are trying to compare things which cannot be directly compared. The result is the kind of nonsense to be found in the Natural Capital Committee’s latest report, published a couple of weeks ago(4). The Natural Capital Committee was set up by this Government, supposedly in pursuit of better means of protecting the natural world.
It claimed, for example, that if fresh water ecosystems in this country were better protected, the additional aesthetic value arising from that protection would be £700 million. That’s the aesthetic value: in other words, what it looks like […] It’s just not possible to have meaningful figures for benefits which cannot in any sensible way be measured in financial terms.”
Rare examples where pricing actually works to the benefit of nature
“Now there are some things that you can do. They are pretty limited, but there are some genuinely commensurable pay-offs that can be assessed. So, for instance, a friend of mine asked me the other day, “What’s the most lucrative investment a land owner can make?”. I didn’t know. “An osprey! Look at Bassenthwaite in the Lake District where there’s a pair of ospreys breeding and the owners of the land have 300,000 people visiting them every year. They charge them for car parking and they probably make a million pounds a year.”
You can look at that and compare it to what you were doing before, such as rearing sheep, which is only viable because of farm subsidies: you actually lose money by keeping sheep on the land. So you can make a direct comparison because you’ve got two land uses which are both generating revenue (or losing revenue) that is already directly costed in pounds. I’ve got no problem with that. You can come out and say there is a powerful economic argument for having ospreys rather than sheep.
There are a few others I can think of. You can, for instance, look at watersheds. There is an insurance company which costed Pumlumon, the highest mountain in the Cambrian mountains, and worked out that it would be cheaper to buy Pumlumon and reforest it in order to slow down the flow of water into the lowlands than to keep paying out every year for carpets in Gloucester.
There were quite a few assumptions in there, as we don’t yet have all the hydrological data we need, but in principle you can unearth some directly commensurable values – the cost of insurance pay-outs, in pounds, versus the cost of buying the land, in pounds – and produce a rough ballpark comparison. But in the majority of cases you are not looking at anything remotely resembling financial commensurability.”
Unbundling ecosystem services and trading them separately means damaging the holistic system of nature
“Problem Two is that you are effectively pushing the natural world even further into the system that is eating it alive. Dieter Helm, the Chairman of the Natural Capital Committee, said the following in the same report I quoted from just a moment ago. “The environment is part of the economy and needs to be properly integrated into it so that growth opportunities will not be missed.”
There, ladies and gentlemen, you have what seems to me the Government’s real agenda. This is not to protect the natural world from the depredations of the economy. It is to harness the natural world to the economic growth that has been destroying it. All the things which have been so damaging to the living planet are now being sold to us as its salvation; commodification, economic growth, financialisation, abstraction. Now, we are told, these devastating processes will protect it.
Now nature is to be captured and placed in the care of the financial sector, […] we need to “unbundle” ecosystem services so they can be individually traded.
That’s the only way in which it can work – this financialisation and securitisation and bond issuing and everything else they are talking about. Nature has to be unbundled. If there is one thing we know about ecosystems, and we know it more the more we discover about them, it’s that you cannot safely disaggregate their functions without destroying the whole thing. Ecosystems function as coherent holistic systems, in which the different elements depend upon each other. The moment you start to unbundle them and to trade them separately you create a formula for disaster.”
The power of the economic system as a whole against the power of nature
“Problem Three […] is, of course, power.
Power is the issue which seems to get left out of the Natural Capital Agenda. And because it gets left out, because it it is, I think, deliberately overlooked, what we are effectively seeing is the invocation of money as a kind of fairy dust, that you sprinkle over all the unresolved problems of power in the hope that they will magically resolve themselves. But because they are unresolved, because they are unaddressed, because they aren’t even acknowledged; the natural capital agenda cannot possibly work.
You haven’t changed anything by sprinkling money over the problem, you have merely called it something new. You have called it a market as opposed to a political system. But you still need the regulatory involvement of the state to make that market work. Because we persuade ourselves that we don’t need it any more because we have a shiny new market mechanism, we end up fudging the issue of power and not addressing those underlying problems.
You do not solve the problem without confronting power. But what we are doing here is reinforcing power, is strengthening the power of the people with the money, the power of the economic system as a whole against the power of nature.”
Criticism on Biodiversity Offsets: the example of Smithy Woods
“Let’s start on the outskirts of Sheffield with Smithy Wood. This is an ancient woodland, which eight hundred years ago was recorded as providing charcoal for the monks who were making iron there. It is an important part of Sheffield’s history and culture. It is full of stories and a sense of place and a sense of being able to lose yourself in something different. Someone wants to turn centre of Smithy Wood into a motorway service station.
This might have been unthinkable until recently. But it is thinkable now because the government is introducing something called biodiversity offsets. If you trash a piece of land here you can replace its value by creating some habitat elsewhere. This is another outcome of the idea that nature is fungible and tradeable, that it can be turned into something else: swapped either for money or for another place, which is said to have similar value.
What they’ve said is, “We’re going to plant 60,000 saplings, with rabbit guards around them, in some other place, and this will make up for trashing Smithy Wood.” It seems to me unlikely that anyone would have proposed trashing this ancient woodland to build a service station in the middle of it, were it not for the possibility of biodiversity offsets. Something the Government has tried to sell to us as protecting nature greatly threatens nature.”
Protest against plans to build a motorway through Smithy Wood and use biodiversity offsets
Photo: Sandra Bell
If nature is valued at £x, development will be valued at
“Say we decide that we’re going to value nature in terms of pounds or dollars or euros and that this is going to be our primary metric for deciding what should be saved and what should not be saved. This, we are told, is an empowering tool to protect the natural world from destruction and degradation. Well you go to the public enquiry and you find that, miraculously, while the wood you are trying to save has been valued at £x, the road, which they want to build through the wood, has been valued at £x+1. And let me tell you, it will always be valued at £x+1 because cost benefit analyses for such issues are always rigged.
The barrister will then be able to say, “Well there you are, it is x+1 for the road and x for the wood. End of argument.” All those knotty issues to do with values and love and desire and wonder and delight and enchantment, all the issues which are actually at the centre of democratic politics, are suddenly ruled out. They are outside the box, they are outside the envelope of discussion, they no longer count. We’ve been totally disempowered by that process.”
Problem of values and framing: taking the position of the opponent (the monetisation of nature) means loosing the own values (instrinsic vlaue of nature)
“But the real problem, and this comes to the nub of the argument for me, is over the issues which I will describe as values and framing. […] In other words, we are trying to make a case to people who just don’t care about the natural world. How do we convince them, when they don’t share those values, to change their minds? To me the answer is simple. We don’t.
This, in effect, is what we are being asked to do through the natural capital agenda. We are saying “because our opponents don’t share our values and they are the people wrecking the environment, we have to go over to them and insist that we’re really in their camp. All we care about is money. We don’t really care about nature for its own sake. We don’t really believe in any of this intrinsic stuff. We don’t believe in wonder and delight and enchantment. We just want to show that it’s going to make money.”
The alternative to the Natural Capital Agenda is mobilisation
George Monbiot concludes with his alternative to the Natural Capital Agenda — action and activism:
“So you say to me, “Well what do we do instead? You produce these arguments against trying to save nature by pricing it, by financialisation, by monetisation. What do you do instead?”
Well, ladies and gentlemen, it is no mystery. It is the same answer that it has always been. The same answer that it always will be. The one thing we just cannot be bothered to get off our bottoms to do, which is the only thing that works. Mobilisation.”
About George Monbiot
George Monbiot is an environmental expert who studied zoology in Oxford. He is environmental and political activist who writes a weekly column for The Guardian and is the author of a number of books. His articles are also published and archived in his blog http://www.monbiot.com/. The mentioned speech is available as a transcript here: http://www.monbiot.com/2014/07/24/the-pricing-of-everything/ and as a video here: https://www.youtube.com/watch?feature=player_embedded&v=ni1tX0bpTR8
About the Natural Capital Initiative in the UK
To find out more about Natural Capital and the Natural Capital Initiative, please visit: http://www.naturalcapitalinitiative.org.uk/
“NCI’s mission is to support decision-making that results in the sustainable management of our natural capital based on sound science. We aim to do this by:
- Initiating and facilitating dialogue between people from academia, policy, business and civil society who make or influence decisions to find shared solutions and approaches; and
- communicating independent, authoritative synthesis and evaluation of the scientific evidence base.
Our aim is to be the UK’s leading forum through which decision-makers from academia, business, civil society and policy can engage in meaningful cross-disciplinary and cross-sectoral dialogue on how to embed natural capital thinking in policy and practice based on the best available evidence from across the natural and social sciences.
The NCI champions:
- Policy– and decision– making based on scientific evidence.
- Interdisciplinary, cross-sector engagement.
- A whole-systems perspective that seeks to develop our resilience to change.
- A positive approach that aims to identify pragmatic solutions.
To read more about our strategy for 2014 – 2018, please click here.
What is natural capital?
‘Natural capital’ is an increasingly popular metaphor for the features of the natural environment that underpin society, the economy and wellbeing. The concept of natural capital is attractive to business and government alike. It puts the natural environment on an equal footing to financial, manufactured, human and social capital.”