Monetising UNESCO Biosphere Reserves
The eventual conclusion I came to in yesterday’s article was that UNESCO’s Biosphere Reserves, through the Global Environment Facility, was using a ‘Landscape Approach’ to monetise the output of ‘Natural Assets’ - ie ‘Ecosystem Services’ - and these would be routed into ‘Natural Asset Companies’ and floated on ie the New York Stock Exchange.
And as I was working on drumming up material for yet another article cementing this claim, I realised that the Intercontinential Exchange had already done the work for me.
Yesterday’s article is here -
The article to which I refer can be found here - ‘Capitalizing on nature’s value for a net zero world‘. I’ll add it here and again at the bottom, because there are a range of links which need to be squeezed in.
I won’t go through this in-depth. Instead, I’ll add links to prior articles as appropriate, as I’ve covered pretty much everything in detail before. Yesterday’s article was meant as the glue, putting together past work, but I probably should have taken inspiration from Buzzfeed, as it’s not a particularly exciting title. Regardless;
‘In 2020, the UK government-commissioned Dasgupta Report laid out for the first time in stark terms the importance of natural capital to business and finance, and ultimately whole economiesi. It warned that ecosystems are in extreme danger from ongoing biodiversity destruction, undermining nature’s productivity and resilience, and threatening ecosystem collapse.‘
Yada, yada, it’s no longer climate armageddon, but ecosystem armageddon.
‘This matters, because healthy ecosystems provide clean air and water, foster biodiversity, regulate the climate, and provide the food. These crucial natural processes are called ecosystem services. All businesses depend on ecosystem services either directly or through their supply chains‘
It’s all about Ecosystem Services, and we’re all dependent on said. I recently posted on ‘Ecosystem Service Valuation’ (aka ‘fraud’), and Natural Capital Accounting (also aka ‘fraud’), which are required for those NAC IPO listings. Hence, the title -
‘Limiting global warming requires the ability to value “externalities” - such as placing a price on pollution and a value on carbon-free electricity and carbon sequestration and storage.‘
Oh, carbon sequestration and storage, you say? More on that in a bit.
‘So, what value can we put on them? And how can market participants interact with these assets to mitigate their environmental footprint?‘
Environmental Footprint strongly hints at the Club of Rome and Collegium International linked organisation, the Global Footprint Network, whose founder is… very much a member of the Club of Rome.
I covered the Collegium International separately over here. In short, it’s a global governance seeking organisation founded in 2002, which count many, many high profile members, including the present UN SecGen; Antonio Guterres -
But back to the article -
‘The creation of a new asset class… This could come in the form of holding stock in a company that would hold the rights to ecosystem services produced by natural, working, or hybrid lands.
The New York Stock Exchange, in partnership with the Intrinsic Exchange Group (IEG), proposes to launch just such a company in the form of a new class of listed securities called Natural Asset Companies (NACs).‘
I’ve banged that drum repeatedly. NACs do NOT require ownership, but merely rights of exploitation. Here’s my article on NACs -
‘Pending regulatory approval, NACs will be a new class of company that holds the rights to the ecosystem services produced in designated natural, working, or hybrid areas with the goal of increasing the health and productivity of these assets through active management. They will be a publicly investable asset for investors; NACs are intended to:‘
… and of which areas do we speak?
‘Because most ecosystem services are not yet monetizable, investors will need information beyond standard financial statements to understand the value of a Natural Asset Company. Each NAC would produce both traditional financial statements as well as new materials called “Statements of Ecological Performance” that measure the productivity, value, and health of the landscapes whose ecosystem services rights are held by the NAC.‘
And there it is. Landscapes. It’s the ‘Landscape Approach’. In short, the ‘Landscape Approach’ is a temporal lease, relating to a specific ‘ecosystem service’, for an arbitrary area of land. Ie, say a 10-year freshwater exploitation lease covering the nation of Laos. Previously covered here, but I probably shouldn’t have gone all Buzzfeed on that title -
It’s a large corporation discovering high quality timber in a UNESCO reserve, and then requesting the GEF package that up in a blended finance deal. I wrote on exactly that in the first link above. Blended finance here, with a bonus Rothschild link through Moringa -
And finally -
‘Building on its experience operating environmental markets for almost two decades, ICE last month launched a Nature-Based Solutions Carbon Credit Futures Contract(“NBS”). This is ICE’s first contract specifically designed to measure the carbon sequestration and storage capabilities of nature, which it is hoped will be an important valuation tool to conserve and grow the world’s natural capital base‘
… now, do you understand why UNESCO’s Biosphere Reserve program is… somewhat occupied by forests?
Because these will be sent straight to the GEF for monetisation.
And I really do wish I was joking. I can source you so, so, so many examples.
A UNESCO Biosphere Reserve you say? Sure thing, buddy, let’s have those sweet, sweet carbon credits monetised - comin’ right up, fella.
Ah yes, and the Atolls, Coral Reefs, Mangroves, and so forth? Well, as it turns out Blue Carbon is far more potent in terms of generating income, sorry, absorbing carbon dioxide than forests -
‘…average annual carbon sequestration rate for mangroves averages between 6 to 8 Mg CO₂e/ha (tons of CO₂ equivalent per hectare). These rates are about two to four times greater than global rates observed in mature tropical forests‘
And I really can source you so many. Really can. But, in fairness, they’re not the only types of ecosystem services.
Innovative finance will innovate until your wallet is empty.
To protect you.
I’ll leave with a final example. Let’s head over here, to one of the GEF’s very own documents, because there’s a rare single page three-in-one.
Look at how many biodiversities they’re saving!
And though it should be obvious, in the event you want evidence of a GEF and Landscape Approach merger, well here’s one. You can alternative link it up with the ‘Global Landscapes Forum‘, should you still remain unconvinced.
What, you never heard of the Global Landscapes Forum? It is a thing, you know. And it is about the Landscape Approach -
And it draws in VIP speakers alright -
But anyway - we are not done with this topic. In fact, there’s a history to unwind.
