On the value of oceans and how the earth pays for our iDevices + eGadgets – or, I’m still down the accounting rabbit hole

Storms have smashed Sydney and New South Wales for days, flooding roads, railways, entire towns, uprooting trees, tearing off roofs, sweeping away beaches, cars, houses, animals, people. The tempestuous weather makes clear once again the almighty power of our planet whose good and predictable behaviour we mostly take for granted, in Sydney at least. It’s a timely reminder, given that yesterday was Earth Day – and we increasingly live in a digital, virtual world and forget about the actual earth.


Because I once followed my love of art and Venice into the underworld and found that accounting runs the planet, or at least largely determines how we value it, on Earth Day I think about accounting. Especially about how the way we account lets us abandon the earth for economic growth, for profit, for the production of more and more stuff that we don’t really need and we don’t properly pay for, because the earth does.

This week a new report commissioned by the WWF, Reviving the Ocean Economy: The case for action – 2015, has valued the world’s oceans in monetary terms. It found they’re worth $US24 trillion. Which makes The Oceans the world’s seventh biggest economy, with an annual value of goods and services of US$2.5 trillion. I’d say ‘for what such figures are worth’, except that such figures are worth something – because they translate the value of various bits of the earth into the language spoken by business and economics. And this is the language that counts, because business and economics rule.

So much does business rule that the lead author of the WWF report, Professor Ove Hoegh-Guldberg, tasks it with reversing the destruction of the oceans. This is new. He said it’s important that the business community understands the value of the oceans so that a strategy could be devised to reverse their decline. The Director General of WWF International, Marco Lambertini, also used the language of business and economics to argue for the ocean’s enormous value to the planet and human life:

‘The ocean rivals the wealth of the world’s richest countries, but it is being allowed to sink to the depths of a failed economy. As responsible shareholders, we cannot seriously expect to keep recklessly extracting the ocean’s valuable assets without investing in its future … The ocean feeds us, employs us, and supports our health and well-being, yet we are allowing it to collapse before our eyes. If everyday stories of the ocean’s failing health don’t inspire our leaders, perhaps a hard economic analysis will.’

But will it?

And will a hard economic analysis make us pay the real cost of our iGadgets and eDevices, which are currently being paid by people and places far from Head Office, like exploited workers in an iPad factory in southern China, and a ruined lake near Baotou in inner Mongolia, the dumping ground for the waste of rare earth minerals mining (the nearby Bayan Obo Mining district contains some 70% of the world’s rare earth minerals). As BBC journalist Tim Maughan said when he saw the lake, now a toxic wasteland:

‘It’s a truly alien environment, dystopian and horrifying. The thought that it is man-made depressed and terrified me, as did the realisation that this was the byproduct not just of the consumer electronics in my pocket, but also green technologies like wind turbines and electric cars that we get so smugly excited by in the West.’

If we factored these human and environmental costs into our accounting models so we paid the real prices of the goods they helped to produce – as economist Raj Patel argued with his hypothetical $200 hamburger – would we save them? I think this is one of the most important questions of our time.

Economist Richard Denniss addresses similar questions in the latest issue of The Monthly in a piece called ‘Spreadsheets of Power‘ about the persuasive and pervasive power of economic models. Denniss dismisses environmentalists’ attempts to put dollar prices on nature, as the WWF has done with oceans this week. He says: ‘The environmental movement had spent decades avoiding a direct attack on the claimed economic benefits of mining, preferring instead to try to counterpose a value on the possums, frogs and trees that are inevitably harmed. I like possums, frogs and trees, but I think attempts to value them are as arbitrary as attempts to value human lives.’ But as Denniss acknowledges, economists put money values on human lives every day, for insurance and other purposes. So why not on possums, frogs and trees?

Would putting dollar prices on oceans, possums, frogs and trees stop us from destroying them? Force us to value them? I wrestled with this question when thinking about the new ‘six capitals‘ accounting paradigm which seeks to value nature as ‘natural capital’, torn between Raj Patel’s $200 hamburger and George Monbiot’s argument that ‘Costing nature tells us that it possesses no inherent value‘. Which brings us back to Earth Day, because Monbiot’s piece on costing nature was published on Earth Day 2014. I read it while I was writing Six Capitals. It brought home to me the full force of a remark made by John Maynard Keynes in 1933 – ‘once we allow ourselves to be disobedient to the test of an accountant’s profit, we have begun to change our civilisation’ – and of the true bankruptcy of that civilisation, which has so lost its bearings in the universe that its only apparent common measure of value, and of right and wrong action, is the rule of money.



This entry was posted in Can accountants save the planet?, Economics, Six Capitals, The Earth and environmental activism. Bookmark the permalink.

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