Market mechanisms for nature lead to disaster

Instead of being subtitled "securing the value of nature", the government's new environment White Paper should be called "securing profits from nature".

Disguised by many thousands of pious words, it simply underlines the importance to capitalism of the commodification of the eco-system.

Adopting a profit-driven interpretation of last week's interesting report, The Economics of Ecosystems and Biodiversity, it confirms that the government will have no active role in nature conservation. Instead it is handing it over to the private sector.

There is no more than a nod to new networks of local partnerships, with no funding and no statutory powers. A paltry £7.5m is being made available for local partnerships to "compete" to create one of 12 new-style conservation areas.

The ConDem coalition had already let the cat out of the bag on their true perspective when they announced plans to privatise the Forestry Commission’s holdings.

You might say, it isn't just about money – but isn't that exactly what last week's report said it was about? That nature has a value, which must be accounted for in land use and economic planning?

But the White Paper makes clear that the national planning policy framework to be published later this year will focus on growth, growth and more growth – at any cost.

This underlines the inherent weakness of the whole concept of leaving the conservation of nature to the tender mercies of the capitalist market. Nature may have a value but you can't make it profitable! Quite the opposite, in fact.

As nature (or as the White Paper calls it "natural services") becomes “scarcer” it must, by definition, become more profitable. That is why the global market in agricultural land is booming and the mineral and timber commodity markets soaring.

The White Paper states: "The Economics of Ecosystems and Biodiversity study shows that protected natural areas can yield returns many times higher than the cost of their protection. There are multi-million pound opportunities available from greener goods and services, and from markets that protect nature’s services."

What this will mean in practice is that the government will try to find ways to ensure that private business uses opportunities for profit taking. Ministers will "publish an action plan to expand markets and schemes in which payments are made by the beneficiary of a natural service to the provider of that service". Landowners are rubbing their hands with glee!

And they will also set up a “business-led Ecosystem Markets Task Force to review the opportunities for UK business from expanding the trade in green goods and the market for sustainable natural services".

They are not talking here about supporting exports of charming wood furniture or eco-friendly clothes - and they have already destroyed the UK's chance of leading in renewable power technology. They are talking about nuclear power, shale gas, and the trade in carbon credits.

This idea of using “green economics” – the valuation of nature – as a foundation for protecting the eco-system was being discussed at the UN in New York this week. Bolivia's ambassador Pablo Solon summed up the problem perfectly:

The creation of new market mechanisms for nature, the development of a market for environmental services, will bring us toward a collapse. We believe it is wrong to break down nature into simple environmental services subject to economic valorization and market exchange. The laws of the market, of supply and demand, are in conflict with the laws and natural cycles of the Planet Earth.

The concept of building "whole earth costs" into planning can only contribute to the protection of eco-systems when it is part of a global not-for-profit economic system.

Penny Cole

Environment editor

The cost of losing nature

The annual cost of global damage to the natural environment has been put at $4,500 billion. This is greater than the annual cost of coping with the financial crisis, according to a European Commission-backed study group.

The Economics of Ecosystems and Biodiversity (TEEB) puts a value on forests, wetlands, grasslands and ocean habitats, and then costs the damage to, or loss of, this ‘natural capital’. They launched their findings at the 10th meeting of signatories (COP10) to the UN Convention on Biological Diversity held in Nagoya, Japan this week.
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1359&format=HTML&aged=0&language=EN&guiLanguage=en

Pavan Sukhdev, a former banker who leads the programme, said his team measures ‘the multi-trillion dollar importance to the global economy of the natural world’, including forests, which it calls ‘the GDP of the poor’, coral reefs, ocean habitats, wetlands, rivers and even the value of pollinating insects.

He called for ‘a new era in which the value of nature’s services is made visible and becomes an explicit part of policy and business decision-making.’ The report suggests that in future, national measures of GDP and company accounts, should include these costs, which would ‘reset the economic compass’.

‘The time for ignoring biodiversity and persisting with conventional thinking regarding wealth creation and development is over. We must get on to the path towards a green economy,’ Sukhdev stated.

Unfortunately, governments and corporations are heading in the opposite direction. In Britain, Osborne’s Comprehensive Spending Review, launched on the same day as the TEEB report, specifically attacked measures to support bio-diversity. The Con-Lib Coalition has removed up to £1bn a year by 2014-15 from the development of green energy and other initiatives, by putting income from the Carbon Tax into reducing the deficit instead.

Environmental Stewardship schemes that pay farmers to support bio-diversity have been cut. The 20% budget cut for Department for Environment, Food and Rural Affairs (Defra) will lead to funding cuts and possible privatisation for England’s 224 National Parks and for the botanical gardens at Kew.

Globally, the economic crisis is driving reckless and uncontrolled destruction of habitats. Oil drilling in deep water causes constant leakage; tar sand extraction wrecks forests and rivers; the extraction of uranium for the new generation of nuclear power stations is poisoning land, animals and people. Far from ‘internalising’ these ‘externalities’, the corporations do everything they can to avoid taking responsibility, and paying.

However, the work of TEEB is extremely important in looking to the future, beyond capitalism. This kind of economic management will support new concepts of growth that include the costs of extraction and of recycling products at the end of their (very much extended) useful life. Such concepts of course will exclude the capitalist premise that shareholder profit is the sole measure of success.

Penny Cole
Environment editor