We cannot solve our problems with the same thinking we used when we created them.’ This quote from Albert Einstein is worth considering in our collective response to the nature and climate crisis. Whether its fires in the Amazon and Australia, Hurricanes in the Bahamas or flooding in Yorkshire and Venice, evidence of the scale and urgency of the climate and biodiversity emergency can no longer be ignored. Business as usual is not an option: we need to reorient our economy towards a more sustainable future, and this needs to happen now.

The UK Government has chosen to respond to the crisis, in part, by producing a 25-year environment plan, setting out the main goals, including to set gold standards in protecting and growing natural capital – leading the world in using this approach as a tool in decision-making’. It makes the case that putting a value on the environment as a natural asset to the overall economy’ will make people more likely to protect it. But is the monetisation and financialisation of nature, fitting it into the capitalist growth model that has led us to this crisis point really what we need?

What is natural capital and what is it meant to achieve?

Natural capital and ecosystem services communicate society’s dependence on nature and aim to capture externalities (environmental degradation, like pollution, not captured in market prices) in economic decision-making. The different elements of this approach are:

  • Natural capital accounts are a register of stocks, which are features of nature underpinning society, the economy and human wellbeing such as trees, fresh water or fish populations.
  • Ecosystem services are benefit flows from nature i.e. goods’ like food and water, and services’ like regulation of floods, or recreational benefits.
  • Nature valuation aims to quantify those parts of nature’s services, which can be considered use values, like timber, fish and tourism, or non-use values like carbon capture, scenery, and sense of place for people.

A natural capital approach’ is a worldview, which includes natural capital accounting, and valuation of ecosystem service flows and natural capital stocks, giving rise to a particular set of economic tools and methods that are in turn meant to inform decision-making. Informed decisions are one thing, who makes those decisions, on what basis and to what purpose is another. If decisions were based on facts, precautionary principles, or legal duties to put nature, the environment and equity first, we wouldn’t be in this crisis.

What are some of the critiques of natural capital?

Some of the strongest arguments against natural capital are that it embeds weak sustainability, which states that human/​manufactured capital’ can fully substitute natural capital’. For example, if you cut down mangroves for shrimp farms you can still stop the negative impacts of storms on the coast by building sea walls. This is opposed to strong sustainability, which says the two are not substitutable and mangroves do much more than just protect the coastline as they also capture carbon and act as fish nurseries where sea walls don’t.

There is also substitutability within natural capital that is equally flawed, like if you want to build a road through an ancient woodland you plant some other trees elsewhere. Natural capital assumes commensurability, meaning that there is a common metric (often money) that all these stocks and flows can be described in, creating a false sense of equivalence between different aspects of nature, as well as changes over space and time.

Framing nature as capital and services is in itself problematic. It’s so much more than that and our survival depends on it. The positively framed language and metaphors of natural capital and ecosystem services are widely used from NGOs to governments and international bodies such as the World Bank and IMF, but the negative equivalent hardly features. As we’ve previously argued, putting a price on something doesn’t necessarily capture its whole worth and valuation alone is not what is going to determine the fate of the natural environment. We need to ask ourselves if this approach works at all, as a recent European Commission report suggested there is little evidence of ecosystem service valuation impacting on decision-making as of yet.

But what is arguably most troubling about the natural capital approach is it doesn’t consider the impact political will and power have on decision-making. What happens to nature is a political choice, determined by who has power to shape laws, regulations and fiscal policy. What we need to know is who is going to benefit from natural capital accounting.

Will a natural capital approach save nature?

Sometimes accounting, valuations and monetisation can be useful. Showing the value of particular habitats, species or sectors makes them visible and can be used to inform decision-making. Valuation may provide relevant information, like highlighting economic consequences under various scenarios, but economic considerations should not be the only or primary criterion for decision-making about conservation and nature restoration.

Economic values, valuation methods and markets mechanisms are not culturally or ideologically neutral. Instead they are embedded in a market-based economy where the dominant economic ideology is one of efficient markets’, privatisation and deregulation.

We use GDP to measure success in the economy – an indicator fraught with problems. Tools such as cost-benefit analysis and natural capital accounting stem from a narrow worldview and are limited economic tools that suit our current economic system. Monetary valuations are often used to establish market based mechanisms, which change the logic of conservation from an ethical obligation or necessary communal regulation, to one of economic self-interest and financial calculus.

A Natural Capital approach is an example of trying to tackle the ecological crisis by sticking to the status quo, but not only will this fail to restore nature, it will also deepen inequality if we don’t think about distribution, democracy and power. So let’s not use the same debunked thinking that created these problems, to try and solve them. Doing more of the same, or adding natural capital to GDP, is not going to bring about the transformation we need. Instead, we need to change the rules of how our economy operates.

A Green New Deal for nature, focusing on restoring and connecting terrestrial and coastal habitats to remove carbon from the atmosphere, will also increase biodiversity and employment. Globally, natural climate solutions could contribute up to 30% of the necessary carbon removal to remain below 1.5 degrees of warming. A Green New Deal can reform and invest in a new energy system, create green jobs, reduce inequality, deliver a just transition, reform finance, green’ the role of the Treasury and Bank of England, and within that the accounting and indicators used to determine what success is. We need to push for collective action to change our approach to nature with a focus on social justice, equity and nature restoration at its heart. Let’s lead the world at that.

Image: Pixabay