Natural Capital Trends

This week the UK Natural Capital Committee (more info here) released its first State of Natural Capital report with little fanfare.  It achieved a small amount of press attention, with only four environmental news outlets covering the report (according to Google News). A damp squib in terms of press coverage, which was depressing to those immersed in these concepts and convinced this is the right way forward.

It may be healthy to take a step back and a realistic view on the popularity of Natural Capital as a concept. I used Google Trends to gauge public awareness and interest in the concept.  In order for a fair comparison I compared “Natural Capital” against “Ecosystem Services”  – another environmental economics buzz word.

The Google Trend graph is presented below, with Natural Capital represented in blue and Ecosystem Services  in red:

Ecosystem services appears to be getting more ‘heat’ than Natural Capital, despite being around as an idea for less time. Interest in ecosystem services are increasing, while interest in Natural Capital has been flat (or even declining) over the past seven years or so.

Possible reasons for this trend are that ecosystem services as a concept is mutli-disciplinary friendly and less contentious. Consequently it has been adopted across the environmental sector.  Natural Capital, although intertwined with the ideas of ecosystem services, is more difficult to define, and although popular with business may not be popular across the environmental sector.

Perhaps the difference in adoption and interest has its source in concepts themselves. Ecosystem services as a term seeks to capture the benefits flowing from nature without trying to define nature itself. Natural Capital as a concept, shoehorns the matter that makes up nature into a bleak financial framework. For the lay person and those nervous about the ‘commodification’ of nature, Natural Capital is perhaps a step too far.

a hard task with a bit more force

 

Last week I listened to Owen Paterson’s gushing welcome for the work of the ecosystem markets taskforce (EMTF).  Various business groups are also following up including BITC and Aldersgate.

 The EMTF aren’t proposing anything that hasn’t been thought of before, but what is notable is that ideas that were previously the domain of NGOs are being promoted, and in some cases given a new perspective, by business. This can only improve the debate, recognising that its not business vs environment, but that business interacts in different ways with the environment, and there are things we can do to improve those relationships.

 While the EMTF’s business-led message will add force to these environmental arguments, resistance to changing our economic thinking remains widespread. Apparently the Treasury have recently blocked proposed analysis of the impacts of global resource depletion on the UK’s economic growth – the reason being that they don’t want external actors commenting on the UK’s growth prospects. This deafness to debate is head-in the sand stuff. Think back to 2007 when global growth caused food and fuel price spikes that dented UK economic performance – and remember that repeating your actions and expecting a different outcome is a definition of madness.

Environmental economics radio moos

In the past week, our small area of expertise has received  some BBC Radio 4 coverage. Firstly Start the Week in which Tony Juniper’s new book ‘What has Nature Ever Done For Us?’ was discussed (broadly about environmental valuation). Secondly on the Today programme (from 1.24 onwards) there was a small discussion on biodiversity offsetting.

I thought these programmes were enjoyable, especially the discussion of communicating nature’s attributes through both valuation and art on Start the Week. But to experts (ahem) such as the cows of the pasture, these programmes can be frustrating.  We can become irritated with the line of questioning or the assumption we are blind to potential pitfalls in markets or valuation. We believe that environmental economics has a place in conservation policy and communication, and we don’t want our ideas to lead to a ‘nature NASDAQ’ (cow-pyright).

But for whatever reason, environmental valuation and environmental markets can make people anxious. We can’t deny this reaction. Therefore I think we will be frustrated by environmental economics coverage for a while yet. It takes time to build a wide support base and to win round those with philosophical and practical objections to our approach. But hey, at least we are on the radio!

The only answer to a bad guy with a snowball

Fresh snow made the walk to school today much more exciting than usual. Obviously, wary of rogue parents, I armed myself with a snowball. After all, that must be the only answer to a bad guy with a snowball.

Thing is, some of the other dads, seeing me so aggressively armed, realised they needed to be armed too. Soon enough, most people were carrying a snowball. Afterall, its everyone’s right to carry a snowball.

Nervous glances were exchanged and the atmosphere in the playroom outside class became more tense. Knowing everyone had a weapon made people more edgy, would anyone panic and get their retaliation in first? The widespread presence of weapons seemed to alter people’s behaviour, were the weapons creating more aggression, more bad guys?

Colombiodiversita 3: Markets and Ecosystems

Looking back at working on its nature policies for a week, Colombia holds a concentration of humanities challenges, from melting ice (Colombia is losing its glaciers) to poverty and conflict. Their responses to these challenges reveals the best and worst of the effects of economics on the environment.

The worst is the rapid expansion of mining in response to global metal price rises in the last decade (e.g. gold). This market signal has stimulated production at the cost of colossal externalities from mining, often carried out illegally in nature reserves, but also creating huge health problems. Small scale gold mining uses mercury to separate gold from its ore, but the final stage of burning to separate the mercury (which vapourises at a lower temperature) and the gold is usually undertaken in towns due to the risks of being robbed at rural mine locations. This results in mercury exposure not just to the miners, but to their neighbours in towns. The highest environmental concentration of mercury ever recorded was in Colombia; freshwater biodiversity is suffering.

On the other hand, Colombia is proud of its mega-biodiverse natural environment. It has several policies that earmark resources to conserve the natural environment (e.g. spending part of license fees for companies on forest restoration). So in these cases, economics provides the structure to transfer resources to enhance the environment. It’s a microcosm of how, as an environmental economist, I view the global economy: most markets don’t reflect environmental costs and collectively cause colossal damage, but without markets how can we reallocate resources to protect nature?

Colombiodivesita 2: Nearly a Payment for Ecosystem Services System

We have organisations working hard to implement payments for ecosystem services (PES) approaches in the UK, often in water management. As novel approaches they often face implementation challenges. Payments for ecosystem services are eminently suited to the case of water supply management in Colombia: 70% of the population’s water supply originates from upland areas, such as the area known as the Chingaza from which most of Bogota’s water flows. These areas are also home to significant biodiversity, including species endemic to the Central Andean highlands (including the spectacled bear).

The policy framework is supportive of the principle of PES: local government authorities are obliged to spend a percentage of their revenues from water fees on water source management. However, these have to be spent within the regional environmental authority boundaries, which are aligned along sub-catchment boundaries. Given that the most populous areas are rarely in the upland areas with the highest rainfall, so little of this money finds its way to these highland habitats.

In fact a PES arrangement has been organised outside this formal water source management structure, with the City of Bogota water authority supporting the management of Chingaza, from which the majority of its water supply flows. So there is nearly a fantastic PES setup, but the laws restricting the expenditure of water fees to local areas clearly weren’t drafted by a hydrologist.

Colombiodiviersita 1: Nearly a Heart Attack

I am currently applying the cowburps principles in an evaluation of Colombian biodiversity polices. Unfortunately for my colleagues’ jetlag, the meetings are being held in a hotel basement conference room, but I undertook some first hand research of this ‘mega-biodiverse’ country for a few days before the meeting started.

The highlight was visiting a private nature reserve – financed by entry fees, rock climbing and horse riding services, and accommodation provided in an impressive wooden ‘refugio’ (lodge) where I stayed – nature tourism in action. Reaching the lodge involved a 2km hike from the entrance, which started at 2,630m above sea level and dropped 450m through cloud forest on the slopes of the central Andes. They limit entrance to 120 people per day, and I encountered a dozen Europeans, mainly Germans, but the majority of the visitors where Colombians, from the country’s new middle class.

This walk could be covered in 20 minutes, but it took me 2 and a quarter hours, because there were simply too many birds to see. I encountered 3 mixed flocks of birds moving through the forest, which take a lot of concentration to follow as birds move at all different heights from the neck-straining canopy to underneath the leaf litter, each pursuing its ecological niche. I saw 17 species of bird I’d never seen before, including four from genus (family groups) I’d never seen before. To put this in context, seeing more than one new species per day when birdwatching in Europe would be good. As a nature-tourist, it was worth every penny.

As I emerged into the forest clearing near the Lodge, I puffed out my cheeks in exhaustion and rested my hands on my binoculars. An American teacher saw me breathing heavily and holding my chest and came over to ask if I was alright – I reassured him that I wasn’t having a heartattack. It did make me think that the name ‘refugio’ was apt, as going in doors was the only way to take refuge from this overwhelming ornithological diversity. I could just listen to the howler monkeys, and sneak a glimpse at the hummingbirds outside the window.