Are capitalists the new conservationists?
by E.B. Boyd, from Whole Life Times
If you started at scenic Bethany Beach on the Delaware shore and drove due west on Route 26 for 10 miles, you’d hit the town of Dagsboro. Pass through town, drive a few more miles west, and you’re in Cypress Swamp Forest Legacy Area. Last year, the land’s owner, a timber company, sought to sell the property. Normally, it would have been snapped up by a developer looking to pave it over with housing subdivisions. This, after all, is one of the fastest-growing regions of the state, and housing developments bring in more money than timber. Instead, the land was purchased by a Maryland-based group of investors who plan to turn a tidy profit another way: by doing nothing.
Actually, “nothing” is an oversimplification. First they are going to restore the land—which has been ditched, drained, and leveled by its timber masters—to its original swampy glory. Then they’re going to leave it be. For their pains, these new-style businesspeople expect to reap the same kind of financial returns as if they had invested their millions on Wall Street.
Since Adam Smith wrote his famous tract, capitalism has maintained that land has no value until it is put to use by humans, which is why wetlands, prairies, and forests have been drained, paved over, and cut down in favor of shopping malls, office parks, and suburban homes. Now, thanks to an emerging field called “ecosystem services,” it’s beginning to look like there might actually be a buck to be made by letting pieces of land—or, more specifically, the ecosystems they contain—remain pristine.
Ecosystems, say proponents of the new thinking, perform real work that has bottom-line value to human economies, like filtering drinking water, pollinating crops, and controlling climate. In many cases, they say, nature can do these tasks more cheaply than any human-made system can. In light of this new understanding, a ground-level shift is taking place. Instead of ignoring nature or, worse, paving it over or polluting it, some communities and businesses are realizing that it’s sometimes in their interest to conserve nature—so they can turn around and “hire” it to perform certain much-needed services.
New York City, for example, decided to invest in maintaining the Catskill Mountains watershed because using it to filter drinking water was at least 80 percent cheaper than building a new water plant. When authorities in Seattle’s King County were short of funds to repair levee systems, they created a plan to restore floodplains and let nature do the work. Wal-Mart and Japanese car manufacturers that ship goods through the Panama Canal are being encouraged to fund a project to pay neighboring landowners to restore and maintain forests on their lands. The forests would reduce soil erosion and silt buildup in the canal, which in turn will cut the insurance premiums the corporations pay to protect their barges against business delays caused when the canal closes for dredging.
In each of these arrangements, the customer benefits by getting a specific service out of nature. Conservationists are benefiting by getting what they have been seeking all along: restored habitats and a reversal of environmental degradation.
Along with the excitement about the new paradigm is a growing sense of urgency driven by the realization that some services provided by nature might not be around much longer. For some of these processes, like flood protection, waste management, or pollution abatement, the alternative will be expensive human-made solutions. For others, like carbon sequestration, there is no meaningful technological alternative. In 2005 the United Nations made an alarming pronouncement: Because 60 percent of the services provided by nature are being degraded faster than they can be replaced, the “ability of the planet’s ecosystems to sustain future generations can no longer be taken for granted.”
As a result, public policy leaders are now considering and in some cases implementing new rules. From that regulatory environment, innovative business practices have arisen, principally in the form of credit schemes (the most well known and mature of these being carbon credits). Businesses or government authorities that can’t meet the new standards “outsource” their compliance by buying credits from others.
Though seemingly promising, credit schemes, also known as environmental markets, are still in their infancy. “It’s still very much the vanguard companies that are willing to take a small risk,” says Emma Stewart, director of environmental research and development at Business for Social Responsibility, a nonprofit business association that advises members on socially responsible solutions. Before environmental marketplaces become more commonplace, basic market mechanisms will have to be created: easy ways for credit buyers and sellers to find each other; enforcement mechanisms to ensure that conservation is being delivered; common ways of measuring units of damage and conservation; and efficient pricing systems.
Gretchen Daily, a Stanford University ecologist, is working on that last piece. In 2006 Stanford’s Woods Institute, where Daily is a senior fellow, joined forces with the Nature Conservancy and the World Wildlife Fund to create the Natural Capital Project, which is developing tools for measuring the services specific ecosystems provide, determining what they’re worth, and identifying who’s benefiting from them.
Daily does not initially seem like a typical capitalist. She’s a soft-spoken biological sciences professor who caught the environmentalism bug during her teenage years while she was watching massive demonstrations against acid rain in Germany, where her father was stationed with the military. All things considered, Daily would rather be tramping around some bug-infested tropical forest than navigating the canyons of Wall Street. But as a young scientist doing research in Costa Rica, Daily realized that large-scale solutions to environmental destruction must be embedded in a system of economic incentives. “In many parts of the world, there’s no way to feed one’s family and conserve nature. People just don’t have that choice,” she says. “If they’re not making money, it’s not going to happen.”
E. B. Boyd is a San Francisco writer. Excerpted from Whole Life Times(April 2008), the Los Angeles edition of a family of regional conscientious living magazines published by Conscious Enlightenment; www.cemagazines.com.
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