New Economics Foundation – Chris Williams
‘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 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.
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