Thursday, July 5, 2012

Her name is Rio and she accounts for natural capital

So apparently a bunch of world leaders got together a couple weeks ago to figure out how to save the world from complete ecological and social collapse. The Rio+20 United Nations Summit on Sustainable Development in Brzail brought together conservationists, select heads of state (notably, not US President Obama), and protesters to negotiate how to fund and govern development, particularly with respect to the environmental aspects of development. Environmentalists hyped the summit as THE opportunity for governments to come to some some sort of binding agreement chock full of actions that would build upon Rio 1992's controversial, but visionary Agenda 21.

And of course that didn't happen. Recent conferences of the save-the-world type (e.g. Copenhagen, Durban, Cancun with maybe the exception of REDD+) have been disappointments to a lot of folks - they just haven't gotten anything done (and even when they do, like with REDD+, it's not often with much consensus from important communities).At the same time, there's probably a good set of people who probably didn't expect much anyway, especially since, as the conference date approached, it was clear to many the draft text was going to be weak.
I don't see much value in repeating lamentations of Rio, so I'll try to dig into the significance of the conference, good or bad. From what I can tell, those who followed Rio closely, or had to see it succeed anyway like the UN, did not see it as a total failure. (Though Secretary General Ban Ki-Moon was on the defensive when, summarizing the conference, he had to say: "“Let me be clear. Rio+20 was a success” There were a host of agreements ("silver linings" of Rio's failure), for example, on oceans, renewable energy funding for developing countries, and mass transit. But the UN's own wrap-up on the conference is pretty telling. The agreements on oceans, energy, and transit aren't on there. Gender equity makes it way into a short paragraph after the major highlights. The highlights, instead, form a suite of agreements on "how the green economy can be used as a tool to achieve sustainable development;vpromoting corporate sustainability reporting measures; taking steps to go beyond gross domestic product to assess the well-being of a country; developing a strategy for sustainable development financing" In other words, agreements on "natural capital accounting" (which I'll abbreviate to NCA).

What is natural capital accounting? The idea is to include the benefits that ecosystems provide to humans into all the standard national (e.g. GDP) and corporate accounting systems, so as to encourage the investment in and management of typical of other kinds of "capital", like factories. Oh, you mean make markets in nature? Nay, responds Rachel Kyte from the World Bank,"we are not talking about "pricing" nature but "valuing" it. By valuing it, you are enabling better economic decisions." For Pavan Sukhdev, star of TEEB, it's similarly: "You cannot manage what you do not measure" These champions of the natural capital approach certainly saw Rio as a success for their agenda. Their respective initiatives, the World Bank's Wealth Accounting and the Valuation of Ecosystem Services (WAVES) and Sukhdev's The Economics of Ecosystems and Biodiversity, seemed to made a splash at Rio. WAVES in particular led an effort to get the leaders of 50 nations and 50 businesses to sign on to a campaign to, well I'm not entirely sure since it's another one of those vague "agreements", but the idea is that these countries and companies will work to develop the scientific, policy and market infrastructure necessary to incorporate the "value" of nature into their accounting books. They got their 50 nations (58), but notably, they got more businesses - 86.

It's hard to argue in principal against trying to understand the condition of environments and the importance of their contribution to society. But what does it mean to value nature, that is, put a number - and in particular, a dollar sign - on nature? It certainly is not a cure-all. Notice how Sukhdev's quote above is so reminiscent of famed statistician Lord Kelvin's: "When you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind." But as geographer Ryan Galt notes in one of his articles, summoning Jacob Viner, "When you can measure it, when you can express it in numbers, your knowledge is still of a meagre and unsatisfactory kind."(Jacob Viner in Galt 2011, cited in Sayer, 1992, 175, from Berelson and Steiner, 1964). The "unsatisfaction" here could be any number of things, but for many, it's that the line between value and price is not a clear as Kyte would have us believe. As certain folks have known for a while now, money is both a measure of values, but also a means of circulation. TAt the same time money expresses the value of, say, your house, it is a means for circulating capital across the world so that when Wall Street crashes and the flow of money slows, so too does the value of your house tank. Or as UK non-profit World Development Movement wrote in response to Kyte, the value of a coral reef gets wrapped up in investors' need to circulate money to where it is most profitable, which may not be the reef, and with negative implications for the poor. It's worth quoting at length from their response to Kyte's post:

And as for the idea that reducing conservation decisions to a financial cost-benefit analysis will lead to better government decision-making, it is wholly possible that the opposite may occur. For example, we already know that coral reefs can protect coastlines from storm surges – but if we express this in a dollar figure, the implication is that it is acceptable to trash it if the profit opportunities are sufficiently high. And this kind of simplistic utilitarianism ignores the fact that, to further develop your example of the coral reef, the benefits of destroying the reef are likely to accrue to investors rather than the poor, who are often the most dependent on free natural resources. So a government or private company may decide to let the reef die because the overall monetary return of preserving it is less, ignoring the fact that the people impacted by the decision will be the poorest.

Does the back and forth between the pro-valuers and the opposition the WDM represents even matter? Is NCA even a thing or just the brightest star to come out of a lackluster conference? And what does it signify for global environmental governance? What does it mean for someone like the fictional landowner I keep referring to on this blog, working in southern Oregon to protect the fictional red-bearded Jackson County lark?

I'm not entirely sure yet, but here's a first whack at it: there's probably a bit of hype to NCA. After all, natural capital was "the new political imperative" already way back when at the Conference of the Parties (COP) 10 in Nagoya (Parties to the Convention on Biodiversity - COBD - signed at Rio+0, that is...) That's where TEEB made its debut in a big way. But for NCA endeavors to make it onto center stage at THE event for sustainable development for the foreseeable future is no doubt something serious for global, high-level biodiversity conservation.

At the same time, the 50/50 campaign is no Protocol (Kyoto or Nagoya) nor even an Agreement (Cancun) or Accord (Copenhagen). It's just that, a Campaign. And Rio's blockbuster was none of these fancy titles either, just "The Future We Want". Some might say that Rio's lack of anything in any way binding or even visionary spells the not-so-terrible end of government's role in saving the world. Maybe so. What it does show is a new era in which governments and businesses together write the visions, goals, and rules that manage environments around the world. Ultimately, what this means is that Farmer Jane protecting endangered lark habitat in Oregon is likely to come more and more into contact with the corporate world's tools for and agents of biodiversity protection (and vice versa), perhaps just as Farmer Jane once upon a time came more and more linked to agro-businesses for farm inputs. It'll be interesting to follow those encounters.

Coming up:
The changing geography of coal in the US: mining, export, and restoration in the West
A follow-up on habitat conservation banking: the Texas Conservation Plan

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