Roundtable

Author's Response to GTI Roundtable "Monetizing Nature"

Barbara Unmüßig


I am overwhelmed by the great number of responses that my essay elicited. Many of the submissions completed, enlarged upon, and enhanced my arguments. I was surprised and gratified by the broad agreement with my main theses.

The debate about "valuing nature" and "monetizing nature" raises fundamental questions about whether, and how, we can protect our planet, nature, and biodiversity, and give people a life of dignity and without hardship, either in line with (or contrary to) the capitalist logic and market-compliant instruments. This is an "old" question of environmental policy and the environmental movement. Many find this discussion wearisome and not conducive to our aims; that much is clear from a few of the comments. Such debates about theories and fundamental principles—it is true—do not protect a single ecosystem or save anyone from poverty. Nevertheless, I cannot accept the conclusion that we should give up debating principles altogether, because that immediately rules out thinking in terms of alternatives and looking for different solutions. Pragmatism is important; it makes possible help and protection on the ground. It must not, however, become the pretext for capitulating in the face of every theoretical concern about practical constraints.

Worldwide, we are experiencing how very rapidly the economization of all spheres of life is advancing, and how public goods and commons are being co-opted by the capitalist market. Everything that the market finds "not interesting" and "unprofitable" remains unprotected. We are seeing this in the health sector (e.g., the dearth of research on Ebola viruses), and we are seeing it in our dealings with nature.

I, therefore, again want to differentiate between appreciation of the value of nature, which requires public and communally organized protection—i.e., political primacy, which must be organized democratically and participatory—and the continuing monetization and financialization of nature.

Valuing nature would, in fact, presuppose a strong policy sector, a polity that is democratically controlled and prepared to protect nature. That is what I am arguing for, and it calls for political alliances.

The reality is just the opposite, however: there is too little money for old, let alone new protected areas, and insufficient staff or equipment to police the ecosystems under protection. Governments lack the political will to accord any political priority to nature and ecosystem conservation over infrastructure projects or resource extraction. And there are too few political alliances among civil society organizations with a core focus on the political. Far too many nature conservation and environmental organizations are, themselves, in the business of monetizing nature.

Given the lack of political will shown by governments, they seem to no longer believe in the primacy of the political realm in finding the right interventions. But surrendering to the market, of all things, surely cannot be the alternative.

I clearly understand that the unavailability of public funds for nature and environmental conservation encourages the acceptance of new economic instruments to compensate for the failure of public nature conservation and biodiversity policy. But to my mind, exploiting nature's services as a source of profit per se, and making them an effective financing instrument in environmental and nature conservation policy in the hope of whetting the private sector's appetite for biodiversity conservation, is a misguided way out of the above dilemma.

On the one hand, the underperformance of state biodiversity and nature conservation policy is a problem. On the other hand, state institutions have long since adopted the protagonist's role in the logic of monetization, because it is a project driven by state policy (like financial market liberalization, to give another example). This will be the focus of my attention in the following.

The real world of monetization

It is helpful to look at the monetization of nature in the "real world"; this is not a mere academic debate. Processes that can be grouped under the heading of monetization of nature (and nature's services) are already a reality, and significant actors like the World Bank and UNEP are working to implement them.

The most comprehensive global approach to valuing an environmental service (the storage of CO2) is undoubtedly REDD (Reducing emissions from deforestation and forest degradation). When this forest-related climate mechanism was launched at the Bali Climate Change Conference in 2007, many environmental activists and the forest policy community were initially electrified. REDD seemed to be a way to fulfill an old hope: that forest conservation rather than logging would be a source of profit. Finally, there seemed to be a feasible prospect of making "conservation profitable," in the agenda-setting words of Gretchen Daily from 2002.

REDD very vividly demonstrates how this could work. The environmental service of CO2 storage is quantifiable (x tonnes), so the environmental service can be valued in dollars and cents. But how will a buyer for this environmental service be found? The verdict is unequivocal: the service is only demanded by actors who want or need to reduce CO2 emissions either voluntarily or on the basis of legal provisions.

Payment for this environmental service is linked to the logic of offsetting. Offsetting in most cases is the flip side of the coin of monetization of environmental services. But it brings a highly problematic dependency into play: payment for nature conservation is tied to the destruction of nature. And this is not just a one-off and negotiable compensation measure: it is the standard mechanism.

This occurs in the practice of biodiversity offsets, which are currently a topic of heated discussion, especially in Great Britain. Under such schemes, environmentally harmful projects find it easier to gain backing. The compensation mechanism suggests that nature conservation is not a problem. What is glossed over is that these compensation payments rely on giving parity to things that are fundamentally different. Is it a fact, for instance, that 100,000 mature trees are equally or less valuable than 10 million saplings? Offsetting is based on treating such equations as meaningful because it is assumed that the "services" of the newly planted trees even exceed those of the old ones. This locks environmental policy into a problematic path-dependency: through offsetting, it ties its financing to the destruction of nature, and to facilitate this, environmental harms must be made commensurable. Quantification and, then, monetization are the logical consequences.

The REDD example is also highly instructive for other reasons. Currently, REDD is considered to be the only promising candidate for a relevant market (or at least financing mechanism) for environmental services, because the quantification of CO2 sequestration is supposed to work relatively well. But this means that the complex functions of the forest are reduced to one function (CO2 storage). That is precisely where the monetization of environmental services (to make conservation "profitable") leads: to the monetization of individual, isolated, quantifiable "services" of nature. Monetization, then, is not just an ideological spectre but a reality, and a close look shows that it usually starts to actually influence actions when it is combined with offset mechanisms and based on oversimplified and dubious quantifications.

Muddled nature of the debate

The fact that different definitions of monetization are in circulation makes the debate somewhat confusing. Alongside REDD, the various other PES systems are a further beacon of hope for a new economy of nature, and are not normally tied to offsets. But more recent studies show that PES systems are not based on the quantification of ecosystem services and corresponding payment for them, as the name suggests. In most cases, they are used as mitigation for not engaging in economic activity or as an incentive for green production; in other words, essentially they are no different from agricultural subsidies based on ecological criteria. They are not so much a "payment for ecosystem services" as a "subsidy in disguise."

Monetization as a communication tool: a new framing?

Many commentaries argued in yet another direction. They oppose the monetization of natural functions for a variety of reasons, but see the economic valuation of nature as a useful bridge, a tool. It is the only way, they reason, that the significance of nature and its services can be communicated visibly, and in a language that political decision-makers and companies understand. This rationale is based on an important assumption: that bad decisions with serious impacts are due to inadequate information. Or, to put it another way, rational decisions are based on the most extensive information available. But is it really true that petrochemical companies will desist from their activities if they are fully informed about the value of marine ecosystems? Will mining companies leave the coal in the ground if the value of the biodiversity being destroyed is made economically visible?

Information is not the only relevant factor in decision-making; it is the economic interests and the promises of profits from resource use and degradation that determine the course of action. If we exclusively make information the central issue (which draws no objections at all), we allow power and profit interests to disappear from our radar screens instead of bringing them into focus to prompt the organization of political opposition. Here, again, we are acquiescing to modes of argumentation that pretend there are no alternatives.

Even a didactically motivated type of monetization must make its case and prove that it makes sense to express the "services of nature" in dollars. Such a view of nature cannot be a pure communication stunt; rather, it implies and consolidates the establishment of an economic framing of nature. Nature and the (capitalist) economy then merge, and nature begins to compete as an economic actor. But this is a specific and by no means uncontroversial view of nature, a new framing, as George Monbiot emphatically states in a recent article on the monetization debate.

What are the consequences of such a new framing? Just that nature's colossal value will be made apparent and comprehensible, even to the biggest dunce or neoliberal hardliner? Or, as is already happening now, that individual services of nature will be recognized as "capital assets" and economically valued? Today, this is already taking place via the CO2 market and for the supply of drinking water. Such specific services of nature (water filtration, CO2 storage) can be monetized with relatively little difficulty. But what are the practical consequences of that kind of monetization? Do they strengthen the right of access to water? Do they secure the sovereignty of local and indigenous communities over their natural resources?

Nature must not be plundered even more by economists

A few commentaries agree with my misgivings about monetization but see it as a necessary step in order to overcome weaknesses in the standard GDP calculations. Negative externalities should and have to be recognized in economic accounting, and this only works via an economic calculation, they say.

"You cannot manage what you don't measure" is the adamant, awe-inspiring dogma that is intended to underpin this line of argumentation. But is it true? This statement, too, is based on the assumption that everything in this world is measurable and can be expressed in GDP-compatible figures. But what if that is not the case? Then what bills will we have to pay? TEEB (The Economics of Ecosystems and Biodiversity) for Business in Brazil calculates that the introduction of genetically modified organisms helped reduce the environmental impact of agriculture by increasing pest resistance and productivity and thereby reducing the demand for pesticides, inputs, and land. Will we have studies that show nuclear power stations having a lower environmental impact than wind power—and will we base our political decisions on them? Economists supply figures, but are these reliable and neutral? In relation to atomic energy, the figures for the external costs vary between 1 and 100 (euro) cents per kWh, for fossil energy sources between 1 and 25 cents, as the German Federal Environment Agency established in a survey on the calculation of external costs. Do such shockingly large ranges perhaps have something to do with different political valuations? In other words, do we really believe that the economists and their "objective" science can or will provide us with reliable figures?

All monetization approaches cannot avoid one fundamental dilemma: the fact that while some specific "services" or functions of nature are unarguably monetizable and economically usable, the overall function of nature, guaranteeing the basis of evolution through diversity, most certainly is not. Nature monetized will always be nature dismembered into specific functions—or else it will only yield figures that are too vast to have any didactic value.

With the attempts to monetize nature's services, we not only set off down a slippery slope, but do so without good cause or any prospect of good outcomes. But the consequences are immense; with the narrative of nature as economically productive, we accept that nature is in competition with human activities. Which stores more CO2: a natural forest or a plantation? In a recent dispute over the establishment of a protected area, including a managed natural forest in Germany's Black Forest, forest owners stated their case armed with an expert report intended to show that the ecosystem services of the managed forests were superior to those of the natural forest. Is nature conservation in the future to be dependent on reports of that kind by economists? Environmental policy must not fall prey to the economic calculus. If the economic framing is accepted, it must be accepted on principle; used merely as a backup argument for the "good cause," an economically-based line of argumentation rapidly loses credibility.

Monetization, even the kind that is only didactically motivated, reproduces the myth of objective, rational science that becomes the basis for decisions. The economics does not exist, however, which could pass an objective, scientific judgement as to what something like nature is worth to us. There can be no "true value" of an ecosystem. And, nevertheless, countless debates unfold, seminars are held, and papers are written, with a view to determining a definite methodology for the economic valuation of nature and its services. Critics note that many services of nature (e.g., its cultural and spiritual functions) elude monetization. Nevertheless, economists merrily continue to gather data and use assumptions for their calculations, applying their approach to everything deemed to have potential as an economically convertible and tradable commodity. This economization of nature changes how it is viewed, and ultimately undermines political action, which ought to be committed to public welfare and preserving all nature's functions.

I think there is one conclusion that we cannot avoid: it's not the economy, stupid; it's politics. This applies particularly to economic mechanisms. Markets for CO2 or biodiversity do not just exist; they must be created politically and involve a high degree of regulatory effort. Political follow-through for the conservation of nature is the critical bottleneck, and neither real nor “didactically” motivated monetization can help us through it.


Barbara Unmüßig

Barbara Unmüßig is President of the Heinrich Boell Foundation. She is responsible for the international work of the foundation with thirty offices abroad. Her work focuses on issues of globalization; international climate, resource, and agricultural policy; gender policy; and the promotion of democracy. She previously served as the spokesperson of the Forum on Environment and Development and the executive chairperson of World Economy, Ecology, & Development (WEED).




Cite as Barbara Unmüßig, author's response to GTI Roundtable "Monetizing Nature," Great Transition Initiative (August 2014), http://www.greattransition.org/commentary/author-response-monetizing-nature-taking-precaution-on-a-slippery-slope.


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