‘We need a paradigm shift equivalent to the flat-earth round-earth shift’: World Forum on Natural Capital, Edinburgh 2015

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Jonny Hughes, co-founder of the World Forum on Natural Capital

I’ve just spent two days listening to dozens of experts speaking about the interaction of business and the natural world. On 23 and 24 November 2015 I was in Edinburgh for the second World Forum on Natural Capital (the first was in 2013). The event drew 600 people from 45 countries to consider the impact on the planet of commercial activity and to discuss early efforts by business, governments, NGOs and others to address its negative effects – notably, by attempts to measure what has become known as ‘natural capital’. I’ve written about and defined natural capital here before, but here are two divergent views of it from the conference, the first from Catie Burlando from the Commission on Environment, Economic and Social Policy (CEESP), the second from economist and natural capital exponent Dieter Helm:

‘We’ve seen a shift in discourse from biodiversity to natural capital. This has brought a shift in who’s invited, who’s involved. Now the issue is for business and private sectors, not for communities and social organisations. I don’t see much here about the impact of natural capital accounting on the ground. We need to bring social issues into the framework. Right now natural capital is driving an agenda and the financing of it. I understand why developing communities might want to engage with this kind of framing, but it’s important to ask if this framing is the best one.’  Catie Burlando, CEESP Inter-generational Youth Adviser, International Union for Conservation of Nature (IUCN)

‘Everything nature provides – the most important building blocks of the economy – is free. Natural capital is not woolly like sustainability. Natural Capital is or it is not. It gives us some rock to base environmental arguments upon. When we’re trying to operationalise this concept of natural capital we have to be absolutely clear about what we’re trying to do: we want to leave the natural environment in a better state than we found it. So the UK government created the Natural Capital Committee to think about it. The assets that matter are renewable natural capital. Scientists push us to understand the thresholds that are important and economics provides the maintenance rules. We must not let the aggregate of natural capital decline. There can be no depreciation; this is very challenging from a corporate accounting point of view and from a national accounting point of view. So we need a balance sheet of natural assets.’ Dieter Helm, Chair of the Natural Capital Committee, Professor at the University of Oxford and a professorial research fellow of the Smith School of Enterprise and the Environment.

Dieter Helm is one of the leading advocates of natural capital accounting. In his book Natural Capital: Valuing the Planet (2015) he defines natural capital as ‘elements of nature’ which ‘directly or indirectly produce value to people, and can be broken down into ecosystems, species, fresh water, land, minerals, the air and oceans, as well as natural processes and functions’.

So you can see from Burlando and Helm’s different views of natural capital that there was a wide range of perspectives and interests aired at the conference despite its promotion of natural capital and its primary focus on business. For me this diversity was represented most compellingly in a session on the second day called ‘The ethics debate: challenge and be challenged. The world of natural capital is complex, with ethical dilemmas that we need to tackle as we consider social, economic and environmental factors. Expect a lively discussion!’

And lively it was. Chaired by Danish economist and environmentalist Inger Andersen, Director General of IUCN, it featured the ubiquitous Pavan Sukhdev, Founder-CEO, GIST Advisory (and leader of TEEB, or The Economics of Ecosystem and Biodiversity); Catie Burlando; Dr Mike Hannis, Research Fellow in Environmental Ethics, Bath Spa University (and author of Freedom and the Environment: autonomy, human flourishing and the political philosophy of sustainability); Samuel Vionnet, sustainability expert & founder, Valuing Nature; and Alicia Montoya, vice president, new & social media, Swiss Re.

For me the most persuasive view came from Pavan Sukhdev, which is perhaps not surprising because he’s been ardently advocating natural capital accounting since TEEB was established in 2007. But I was surprised, because I’d expected to be more persuaded by Mike Hannis, who opened by saying that he thinks the idea of natural capital is fundamentally problematic, a view I mostly share. For Hannis natural capital is problematic by definition, because it’s a metaphor that reframes nature so it can be dealt with by finance and economics. The danger comes if valuing nature means pricing it, ‘because pricing things can endanger them’. Hannis said not all cultures value the natural world in a calculative way that lends it to framing in terms of ecosystem services and other natural capital accounting concepts. And that arguments about the costs we save by protecting nature only reinforce the value of money, not nature.

Sukhdev agreed that natural capital is a metaphor and said he distinguishes between value and price, and between private and public goods. He said that what TEEB considers to be the valuation of nature is different from what Mike might think – and different from the way in which activist, writer and Guardian journalist George Monbiot presents it in his vehement attacks on natural capital (for example here and here). As Sukhdev pointed out, ‘Economic valuation is always implicit or explicit. It cannot not exist.’ And currently the implicit price of nature is zero. This encourages businesses, governments, us, to pollute, burn, extract and chop down its various components with little regard for the environmental consequences. Sukhdev is attempting to address this by giving nature economic value, hence his advocacy of natural capital accounting.

By the end of the session Hannis found himself agreeing with Sukhdev about natural capital. When asked by an environmental activist (who said he’d taken up natural capital accounting because he’s found it gives the natural world some clout in policy debates) what his alternative would be to natural capital Hannis said: ‘I agree with Pavan.’ Pavan is persuasive. The language of natural capital is catchy. And it’s creeping into the broader debates about the natural world. Scientist and global warming activist Tim Flannery used it in his speech at the global climate march in Sydney last Sunday when he referred to the Great Barrier Reef as an ‘asset’.

Catie Burlando presented the most coherent and articulate challenge to natural capital by arguing that it’s only one of many possible ways in which we might frame debates about human interactions with the natural world, others being the various understandings of the natural world of indigenous cultures. (Incidentally, Burlando’s  concern with language and framing is the approach George Monbiot takes in his criticisms of natural capital, drawing on cognitive linguist George Lakoff‘s work on language, metaphors, frames.) I was extremely pleased that Burlando had joined this panel at the last minute. I think it’s incredibly important that the widest possible range of voices are heard in any discussion of how we can best manage our interactions with the natural world so we don’t keep destroying vast swathes of it. Burlando was one of the conference’s few dissenting voices and therefore an extremely important one. Another was ecologist and filmmaker John Liu (more on him below).

The conference was massive and I’m still processing its many threads and implications. There were four fascinating plenary sessions featuring dignitaries such as Scotland’s First Minister Nicola Sturgeon and HRH Prince Charles, as well as natural capital experts including Dr Pushpam Kumar, Chief of Ecosystem Services Economics, United Nations Environment Programme (UNEP); Kristin Rechberger, CEO Dynamic Planet; and conference director Jonathan ‘Jonny’ Hughes, CEO of the Scottish Wildlife Trust. The rest of the conference was devoted to sessions in four parallel streams: understanding and managing risk; innovation and tools; focus on finance and investment; and policy dialogues.

This is just the smallest glimpse into one of the big themes – ethics – raised at this important conference. I’ll be writing more and more deeply about the World Forum on Natural Capital in 2016, especially about the people who are implementing natural capital accounting in various ways, as well as the launch of two key natural capital documents, the Natural Capital Protocol and the Peatland Code. But for now, here’s a little about two inspiring people I met in Edinburgh: John Liu, and Matthew Thomson. Liu is a documentary filmmaker who tells extraordinary tales from the natural world, like Green Gold, his documentary about the successful rehabilitation of destroyed ecosystems. He said: ‘It’s possible to rehabilitate large-scale degraded ecosystems. It’s possible to rehydrate dehydrated biomes. It’s possible to lower temperatures.’ He spoke about the real problem we face in our relationship with the natural world: money. ‘We’re creating economic theories which say natural systems are valued at zero and the products we extract from them create the value and are the basis of money. We need to understand that the future is in biotic systems that naturally replenish and we all depend on. We have inflated the derivatives and devalued the fundamental value of life, nature. We need a massive paradigm shift equivalent to the flat-earth round-earth shift. We need the truth.’

Watergate Bay Hotel

Watergate Bay Hotel

And Matthew Thomson runs a successful business – the spectacular looking Watergate Bay Hotel on the Atlantic Ocean in Cornwall – which believes that ‘business and the environment should go hand in hand‘. He’s also on the board of the Cornwall and Isles of Scilly Local Nature Partnership, so he’s a perfect example of someone working to bring commerce into a more harmonious relationship with the natural world.

The critical importance of this juncture between business and the natural world was acknowledged last week by Guardian Australia when it launched an Australian branch of Guardian Sustainable Business (GSB): ‘Business, alongside governments and citizens, will lead the way towards a more equitable, sustainable future. Along with our UK and US counterparts, GSB Australia will investigate the social and environmental impact of business in Australia.’

Starting tomorrow in Darlinghurst, Sydney, there’s a two-day conference devoted to these very themes: the social and environmental impact of business. Called Purpose 2015, it will feature a wide range of speakers including Jane Spence, Founder of the Hello Nature Project; Matthew Bell, Executive Director, Climate Change & Sustainability Services Ernst & Young; Kyra Maya Phillips author of The Misfit Economy; Stuart Palmer, Head of Ethics Australian Ethical Investment; and James Chin Moody whom I’ve written about here. I’ll be speaking tomorrow morning about the relationship of business, society and the natural world. I hope to see you there. (And I’ll be blogging about the conference here, so stay tuned.)

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Networking drinks in Edinburgh, complete with kilt

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