Valuing the Environment
We’ve seen how the 1968 UNESCO Biosphere Conference suggested Biosphere Reserves be set aside [rec. 15]. And we’ve seen how lands become Biosphere Reserves, through Thomas Lovejoy’s Debt-for-Nature Swap, an idea first floated in the New York Times in 1984. We’ve also seen how the Michael Sweatman’s 1986 idea of a World Conservation Bank came to be, through the Global Environment Facility, and how they structure the hugely one-sided Blended Finance deals using a Landscape Approach, supposedly first suggested by the ‘From Billions to Trillions‘1 document in April 2015. And more recently, we’ve seen Douglas Eger’s Intrinsic Exchange Group2 attempt to create a holding company of type Natural Asset Company for sakes of floating ecosystem service leases on the stock exchanges.
And in synergy thereof - we’ve seen how carbon credits via ecosystem services from Debt-for-Nature swapped UNESCO Biosphere Reserves, monetised through Blended Finance deals structured by the Global Environment Facility aka World Conservation Bank are meant to eventually end up in holding companies of type Natural Asset Companies, and floated on the stock exchanges.
Of course, the last part was brought to a temporary stop, but that naturally only means that they will try again3, of which a recent New York Times article serves as evidence.
Of course, that 2015 officially marked the launch date of blended finance appears more than a little odd, as Moringa was founded in 20104.
And in that regard, Moringa’s very own whitepaper5 could not possibly be more explicit -
‘Moringa was born in 2010 from a meeting between the two founders, Clément Chenost and Hervé Bourguignon, of ONF International and the Edmond de Rothschild group. They were brought together over a shared conviction–urgently providing solutions to environmental issues through sustainable land management.
The theme was new and the approach appealing. Development Finance Institutions and private investors joined the project. Moringa thus became one of the pioneers of “blended finance” by responding to two major challenges‘
But I already covered that whitepaper in detail in the article on Blended Finance. And with that said, let’s get the links to the above out of the way -
But the material used by most articles on ecosystem services don’t make an attempt to trace back the origin of the term itself; ‘ecosystem service’. And - sure - while there are more direct ways to discover that the term ‘ecosystem service’ itself was coined by Paul Ehrlich in the early 80’s, there are still questions relating to the valuation method itself, and the Contingent Valuation Model upon which it hinges.
So do try to forget about Club of Rome’s Paul Ehrlich, who incidentally also wrote the fear-mongering (and repeatedly proven wrong) ‘Population Bomb’ book back in 19686… which, incidentally, also drags in a contemporarily relevant ‘Spaceship Earth’.
In 1993, the World Bank released the document, ‘Valuing the Environment‘7. And this is a good starting point if for no other reason but it dragging in both Partha Dasgupta and David Pearce. The former authored the recent UK ‘Dasgupta Review’; ‘The Economics of Biodiversity‘8 chock full of ecosystem services, natural assets, and Nature-Based Solutions, and even sporting a foreword by none other but David Attenborough. The latter co-authored the 1989 book ‘Economics of Nature Resources and the Environment‘; an exceedingly influential work on the circular economy and sustainable development, which even tied up with Kenneth Boulding… and the concept of ‘Spaceship Earth’.
And that’s the second mention, so I’ll have to drag in Spaceship Earth -
The book starts as you’d expect; there has allegedly been a ‘divorce’ between man and nature, and the importance of a healthy nature and diversity of species has simply been forgotten about, which also ‘promotes health’ in allegedly much the same way that cultural and ethnic diversity does.
Perhaps its just me, but it appears to be already slightly coming off the track here, but this is really only the beginning as Dasgupta proposes that sustainable development as we knew it in 1993 - which is to say, didn’t - is too loose a concept to have purpose, and consequently we must start producing inventories of monetisable ecosystem services on a national basis, ie capital accounts of ‘Natural Assets’. No, he didn’t say those words exactly, but he would, had he not decided to be intellectually dishonest. And in terms of running those accounts, fortunately, David Peace knows just how to calculate said.
Incidentally, Natural Capital Accounts didn’t actually arrive until the Nagoya Declaration in 2010, with much help from the Al Gore and John Kerry co-founded GLOBE Legislators group9.
In the section ‘The Road Ahead’ we suddenly arrive at the following -
'...forceful introduction of environmental values into the everyday incentives facing citizens, corporations, and policymakers'
These values are that good, they must be forced upon not just the people, but corporations and policians as well. Feel free to insert similarities to ESG here, or call it Corporate Social Responsibility, ultimately leading through B Corp’s to a Social License to Operate.
Carrying on, we soon encounter ‘Local and Global Values: Forest Conservation’ which in current times is of interest, because it of course is exactly forests they busily monetise for carbon credits. The accompanying box loops in the concept of ‘indirect benefits’, which is of even further interest, because that’s also a featured component of the absurd, fraudulent ‘Natural Capital Accounting’ concept, previously discussed.
The book ventures on, discussing deforestation and the release of carbon, making it entirely obvious in which direction we head, especially as we soon encounter the following -
‘Recent work by Fankhauser suggests a “central“ value of $20 of damage for every ton of carbon released‘
Yes, it’s pricing of carbon, first discussed by Nordhaus in his 1975 IIASA paper ‘Can we Control Carbon Dioxide?‘10.
But the book’s interests isn’t carbon alone. No, rather, water is another (monetisable) ecosystem service of interest, made rather explicit through Michel J Petit’s efforts; ‘The World Bank's New Water Resources Management Policy‘ -
‘This is an ambitious agenda. In most countries its implementation will be gradual, dealing first with priority issues, which differ from country to country. Programs must be tailored to the institutional capacity of the country. In many cases, capacity will need to be enhanced, and this takes time. Implementation of the policy paper's recommendations within the Bank will take time, too, as staff skills must be upgraded, skills mixes adjusted, and procedures developed and improved. Nonetheless, the process has already started, and the new water policy paper provides overall guidance for our trip on the long road ahead.‘
Delightful. This train was on the move already in 1993, pretty much immediately after the Earth Summit in Rio, 1992, launched the Convention on Biological Diversity, and the UN Framework Convention on Climate Change.
So from the above we can derive that the monetisation of nature was already being rolled out by 1993, this was to be a very slow process, tailored to each individual country, that services monetised counted at least water and carbon credits, and indirect benefits were to be included, also outlined by the UK House of Parliament POSTNote on Natural Capital Accounting from 2011.
The next stop is 1990, and it’s the East-West Center book, ‘Economics of protected areas: a new look at benefits and costs‘11, which in part 1 kicks off by providing an overview of protected areas, valuing its benefits, and then suggesting to select areas to protect on account of financial worth - a somewhat odd idea, really, because by turning everything into express financial value, you kind of forget about the claimed main premise itself - the protection of nature.
The book loops in the Contingent Valuation Method (CVM), but further includes a long string of other ‘ecosystem services’ such as soil formation, nutrient cycling, and local flood reduction which - though perhaps sounding well intended - is an insane proposition, because these by nature are completely unpredictable, and hence absolutely impossible to make up in financial worth, regardless of how much you try. Consequently, when you do try, all you in effect do is to loop in huge levels of randomness into the currency itself which then ultimately works to destabilise.
Incidentally, the BIS has indirectly admitted this through discussing similar issues, and even introduced far worse ‘hacks’ to get round this problem - which all will really only increase the magnitude of the eventual ‘black swan’.
We next have the output of a 1990 workshop, ‘Valuing the Environment‘12, a somewhat more hardcore book, detailing the valuation in detail. It details that CVM has been applied since the early 1960s (this would be through Resources for the Future), before in a chapter on ‘Valuing the benefits of coastal defence‘ diving deeper into the monetary evaluation methods.
The CVM link to 1963 and Resources for the Future was previously discussed here -
The book details a range of theories and models, and applies these… to the concept of extracting money out of the taxpayer, quite simply - and quite openly. Here’s an example of a ‘basic attitude theory model’ applied to ‘willingness to pay for coast protection through increased taxes’.
It also breaks down environmental values, even identifies the environmental appraisal method, and in this mould breaks down the ‘Total Economic Value’ through ‘Use Values’ vs ‘Non-Use Values’ before breaking the latter down through ‘Bequest Values’ and ‘Existence Values’.
Hmm. We’ve seen this before.
In fact, we have. We saw this in the 2011 POSTNote, ‘Ecosystem Service Valuation’13. In other words, we have found a prior document in detail outlining the appraisal method used in contemporary context; Box 1 is even titled ‘Total Economic Value’, before including ‘use vs non-use values’, where the latter clearly includes ‘bequest values’ and ‘existence values‘. Sure, it might have undergone an iteration or two, but this is all far, far, far too specific to be incidental.
The POSTNote however isn’t great in terms of sources, so back to the book we go and one name towers above all - Alan Randall. And in his 1984 book, ‘Valuation of Wildland Resource Benefits‘14 we find an express outline of the above.
We find ‘Use Value’. ‘Option Value’, ‘Quasi-option Value’ and ‘Existence Value’, which then in detail go to explain pretty much the same as above. In terms of the economic appraisal, I have found no comprehensive references further back in spite of trying.
So with the origin of the economic method of environmental appraisal established, let’s trace back the concept of ecosystem services, which as said was coined by Paul Ehrlich. But let’s do that in two stops, because his 1983 paper, ‘Extinction, Substitution, and Ecosystem Services‘15 features a telling inclusion - carbon and water. Yes, really.
Clearly, the initial intent was to monetise the two things humans can’t live without, air and water.
Finally, we’re in 1981 with Ehrlich and Ehrlich’s book, ‘Extinction - The causes and consequences of the disappearance of species‘16, which goes to detail not only ecosystem services but also ecosystem function. And without going into further detail, this book is widely considered the origin of the term, ‘ecosystem service’.
Now, it would be easy to leave it there. So I won’t. Because all of this pivots around a central theme - ecosystems. What we seek is an…
Now, technically the above is a stakeholder land management strategy, allegedly for sakes of saving many, many environments, but in reality centralising power with the few. However, on the topic of ecosystems themselves, around the same time of that infamous 1968 UNESCO Conference, two brothers made their mark on exactly the topic of ecosystems.
Eugene and Howard Odum, and from the article ‘Potatoes Made of Oil‘17 we have -
‘Eugene P. Odum (b. 1913) and Howard T. Odum (b.1924) were at the forefront of the 'new ecology' of ecosystems, in the 1950s and 1960s. As part of their program the Odums were firmly committed to bringing both natural and human ecosystems into accord with the laws of ecoenergetics (the flow of energy through a system).‘
The final part is of particular interest -
‘By diagramming American agriculture as a simplified circuit of energy inputs and outputs, the Odums concluded that energy subsidies had created a dangerously unstable system. As a remedy they suggested an end to the Green Revolution and a modification of human society so as to better approach the steady-state of a mature natural ecosystem.‘
Do you see where this is going? Circular Economy? Sustainable Development? Degrowth strategies?
‘The first tacit assumption went back to the Odums' coral reef study, where they had learned that a mature ecosystem tended to have production equal to respiration, with minor oscillations. Consequently, mature systems were modelled as relatively stable, self-maintaining units where production (i.e., photosynthesis) roughly equalled respiration).‘
Isn’t that interesting? They realised that mature ecosystems were essentially neutral, something contemporary central planners appear blissfully unaware of.
‘Finally, both ecologists assumed that all inputs into the ecosystem could be converted into energy. In Howard's earliest diagrams in the 1950s, the cycling of nutrients and the cycling of energy had often been portrayed in separate models. But with the beginning of Howard's more symbolic energy circuit models in the 1960s, all inputs - nutrients, labor, respiration - were reduced to common energy units (usually kilocalories).‘
Howard T Odum simplified his model, converting nutrients, labour, respiration into quantised assumptions of energy units - ie, the same level of guesswork which we see in the POSTNote on Natural Capital accounting.
And, incidentally, that’s then compounded by what came next.
Because, as also outlined above, the Odum brothers were sharply against the ‘Green Revolution’, a point of view shared by none other but Paul Ehrlich -
I won’t go through the Odum brothers in detail here, and never mind the ‘forgotten’ Odum - their father. That’s for another article, which paves the road to the Total Human Ecosystem. But there is one final thing I do wish to drag in.
What does ‘sustainable development’, ‘the circular economy‘, 'the ecosystem approach’, and even ‘spaceship earth’ all have in common? They are all examples of General Systems Theory.
And that probably is no coincidence, as Howard T Odum was a member of the Society for the Advancement of Genetal Systems Theory, per their 1960 Yearbook.
In fact, the more you study his work, the more you come to realise that likely is that much like he quantised nutrients, labor, and respiration into ‘energy’ (originally ‘power’), this same process took place in a more contemporary time, turning ‘energy’ into economic value.
But enough on the Odum brothers for the time being.
Now, I spent ages, absolutely ages, attempting to trace back the ‘Ecosystem Approach’ mentioned in the 1968 UNESCO Biosphere proceedings, but failed. After a long, long time I finally located a contextually relevant reference in George M Van Dyne’s ‘The Ecosystem Concept in Natural Resource Management’18.
This reference is of particular interest, and announces its broad ideological agreement with the UNESCO Courier release of January, 1969 declaring that man is the enemy of nature, and which was released as an outcome of the 1968 Biosphere conference -
‘Man's rapidly developing technology provides him with increasing ability to manipulate the environment, e.g., traces of pesticides are now found in organisms throughout the world. But man has not had sufficient understanding of the many long-term consequences of environmental manipulation‘
I covered the UNESCO Courier issue over here -
Van Dyne also outlines the source itself -
‘This volume is based on a symposiums held at the annual meeting of the American Society of Range Management in Albuquerque, New Mexico on February 12-15, 1968‘
… which, chronologically, came before the 1968 conference, and -
‘For example, in the evaluation of topics for the annual meeting at which this symposium was presented, the “ecosystem approach" was second in priority…‘
… even includes explicit mention of the ‘Ecosystem Approach’ -
‘This volume has particular pertinence to research in the International Biological Program whose theme includes understanding biological productivity to enable adequate estimates of the potential yield of new, as well as existing, natural resources.‘
… and even explicitly loops in the IBP, also mentioned in the 1968 Biosphere proceedings. And finally, in the ‘Ecosystem Models in Watershed Management’ chapter, we see ‘The Systems Approach’, and section IV drags in ‘The Computational Revolution’.
Oh yeah, the IBP for the record was launched by the ICSU, my favourite quasi-scientific organisation, who incidentally also launched SCOPE, who dd the early ‘science’ on global surveillance and global warming -
It really is all connected. And on that bombshell… wait, actually, let me finish with a title of a 1956 paper, written by ‘Spaceship Earth’ promoting, first president of the Society for General Systems Research19, Kenneth Boulding20.
