What’s the Value of a Whale?

by Adrienne Buller

16 October 2020

Design: Bronte Dow

Covid-19 has brought a new meaning to isolation, but the wearing down of our connections to community, to the natural world and to politics has long been a symptom of the neoliberal project. In this series, Adrienne Buller explores the new forms of connection we need to tackle the challenges of climate and environmental breakdown.

“Once there were brook trouts in the streams in the mountains… In the deep glens where they lived all things were older than man and they hummed of mystery.”

– Cormac McCarthy

What’s the value of a whale? If you guessed approximately $2m over its lifetime based on the combined value of contributions to ecotourism and carbon sequestration, you’d be spot on, according to the IMF. In their view, our failure to protect whales and the services they provide is a textbook “tragedy of the commons”, which can be solved by establishing whales’ appropriate monetary worth. Increasing the population of great whales, they contend, can be marketed as a fail-safe, “‘no-tech’ strategy to capture more carbon”, with each animal taking a remarkable 33 tons of embodied carbon dioxide with them in their post-mortem descent to the sea floor. 

Bizarre as it may seem to see a whale in this way, the IMF are far from alone in their conception of nature’s value. This week, a story headlined “fifth of countries at risk of ecosystem collapse” raised the alarm on the desperate state in which we now find nature and biodiversity around the world. But a glance beyond the headline revealed the true concerns of the underlying report: that trillions of dollars of GDP “depend” on biodiversity. The report, authored by insurance giant Swiss Re, goes on to outline grave concerns over the decline of what it calls “ecosystem services” – breathable air, clean water, viable food sources and so on – and the consequences this will have for industry and the global economy more broadly. 

It seems that in its relentless pursuit of new opportunities for investment and fixation on risk, finance has finally turned to a new frontier: nature. Betting that ecosystems could be to the 2020s what subprime mortgages were to the noughties, financial institutions have been laying the groundwork for the emergence of ‘nature as asset class’ – that is, the transformation of the natural world into a new suite of tradable assets, and hoping that through securitisation (taking a group of illiquid assets, like mortgages, and bundling them together into a security) the risks of its collapse can be mitigated. The language of ‘natural capital’ and ‘ecosystem services’ now tidily segments the complexity of nature and biodiversity into discrete, measurable and – critically – costed units, a clever sleight of hand that opens the door to the commodification of the natural world while passing as an innovative mechanism for its protection. Ecosystems, its advocates argue, are being destroyed because they currently have no economic value; the right price tag could be their saviour.

The financialisation of nature is an almost inevitable extension of the perspective from which finance has approached environmental crises for decades. Institutions from central banks to insurers and asset managers have fixated on the risks posed to financial returns and stability by a degrading climate and biosphere, while largely ignoring both the role of finance in generating those risks, and the impacts of a burning planet beyond financial markets. In short: ask not what finance will do to the climate, but what the climate will do to finance. The industry’s obsession with risk measurement and modelling, as Martha MacPherson of the Institute for Innovation and Public Policy argues, reflects an ideological adherence to the “efficient markets hypothesis”: the assumption that, with sufficient information, markets will “price in” the risks of environmental degradation, allowing them to allocate capital optimally. But the complexity of ecosystems and the impacts of their breakdown makes this an acutely dangerous assumption, with “radical uncertainty” guaranteeing that these risks can never really be known in full.

Unfortunately, this approach to nature has firmly entered the mainstream. The United Nations Environment Programme Finance Initiative has launched a programme to quantify the economic benefits of nature, and investors have frantically started to work out how to include biodiversity in their so-called ESG (environmental, social, governance) investing strategies. A recent influential report endorsed by Davos heavy-hitters from Mark Carney to Kristalina Georgieva stakes out a plan to address the “financing gap” for biodiversity protection, which the authors estimate at up to $824bn per year. Admittedly, securing the funding to adequately protect, steward and restore nature and biodiversity is an urgent, life or death task. The consequences of a failure to do so are almost unthinkable. The problem lies in the proposed solutions. 

Much like mainstream policy approaches to development financing, the strategy for catalysing investment in protecting biodiversity is a new iteration of what Daniela Gabor has coined the “Wall Street Consensus”: a coordinated government effort to “sell” new financial opportunities to the market, and “escort” private capital into the desired spaces. In practice, this means incentives in lieu of firm regulation, and public de-risking of private finance, rather than direct public investment, relying on “financial innovation” – in other words, securitisation – to motivate investors. In the case of nature and biodiversity, I’m ashamed to admit I have wondered whether it’s worth conceding defeat to Wall Street if it means vast swathes of global ecosystems will be pulled back from the brink. In my darker moments, I’ve seriously considered whether attaching a dollar value to a whale could make BlackRock care about its preservation, and if that makes the financialisation of nature Just Fine, Actually.  

It isn’t. The emerging consensus reflects a deep ideological bias both toward private capital and to the idea that something is of value only if it provides returns – a legacy of liberalism’s deep roots in private property and dominion over nature. It is certain to entrench, rather than remedy, immense inequalities in the global economy, and have deeply problematic influence over which ecosystems are prioritised, and which ‘nature-based solutions’ pursued. For instance, rapid, monospecies reforestation is a commercially desirable alternative to slow, genuine rewilding or to preventing deforestation in the first instance, but has far lower climate and environmental benefit than protecting old growth forests, or allowing complex woodland ecosystems to return naturally. Similarly, finance has little interest in rectifying inequalities in access to nature across socioeconomic groups. Nor is it concerned with delivering justice for Indigenous communities and land defenders, communities of colour, and Global South nations who have long been leading the charge for nature’s protection, and to whom, in the words of Kathryn Yusoff, we’ve exported the harms of our environmental destruction for generations. 

Ultimately, the financialisation of nature has been permitted by our profound alienation from it. In the UK – one of the most nature depleted countries on Earth – we no longer even recognise, as George Monbiot recently argued, that visually appealing landscapes such as the Lake District actually reflect legacies of intense ecological devastation. We have the right to roam over just 8% of England. The ability to artificially reduce ecosystems or species to the ‘services’ they provide reflects this alienation, and excludes much of nature’s irreplaceable value, be it spiritual, cultural or personal.

Rather than accept the emerging capitalist hellscape of government incentives for private profiteering from ‘nature-based solutions’, we need to articulate an alternative vision of why nature matters. We should demand that the protection and restoration of ecosystems and biodiversity prioritises environmental and collective social wellbeing over financial returns – both domestically and internationally. Instead of ‘nature-based’ offsets and land-grabs, we need reparations for our outsourcing of environmental destruction. In place of private enclosure, we need an expansion and protection of shared spaces, and to reclaim land for the commons. And we need an economy in which everyone has both enough time for and proximity to nature, allowing us all to reconnect to it as a source of wellbeing and wonder. 

The whale has long been a source of awe, fear, admiration – an enduring literary symbol of the intimidatingly vast ocean. Now they wash up on beaches with bellies full of plastic waste, mundanely confirming our mastery over the last wild spaces. It may be that quantifying the economic benefits of whales’ carbon capture and storage services could save some of them, but we can and must do better. It’s time to free nature from finance.

Adrienne Buller is a senior research fellow at Common Wealth think tank.

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