Exploring the Implications of Valuing Nature as the New Gold

Chatham House hosted its annual sustainability accelerator ‘UnConference’ event this year, focusing on the theme of “How do we accelerate towards a fair and sustainable future?”. During this unstructured conversation, I proposed a session to explore the question: “Could nature be the new gold?”. This session aimed to bring together participants to delve into this topic and examine its potential implications. This summary outlines the key points we covered, the discussions that took place and my personal takeaways (at the end).

Session Summary

This session combined two sessions:

• Nature spaces and biodiversity: what is a nature-positive future?
• Could nature become the new gold? Reversing our perspective on the value of nature conservation.

This combination allowed for a comprehensive exploration of the subject matter.

1. What is biodiversity?

We took the time to delve into this concept, ranging from simple metrics like mean species abundance to exploring ecosystem-level diversity and genetic diversity measured by soil DNA. It was interesting to note that the International Union for Conservation of Nature (IUCN) has a definition of biodiversity that is not widely known due to the lack of consensus and agreed-upon standards. This lack of consensus poses a challenge to the rise and popularisation of the emerging concept of “nature positive.”

2. Putting a price on Nature

For developing countries, preserving carbon sinks, such as forests, may potentially disrupt sources of income. This raised the important question of what these countries would be compensated for. Determining the value and cost of sacrificing development and growth in favour of preserving these carbon sinks becomes crucial in valuing nature. Additionally, we explored the notion that certain areas, like ocean nurseries, hold immense value due to the potential disruption their exploitation could cause to large ecosystems and economies. In this instance, pricing nature runs the risk of causing more harm than good unless its true value is appropriately assessed.

3. Fairness: E vs S of Environmental, Social, and Governance (ESG)

Many argue that we should only focus on measuring the environmental (E) aspect of Environmental, Social, and Governance (ESG), but is this realistic? For many, ESG means: Can I Eat, can I Sleep, and can I Go to work? This reality needs to be taken into account for a just transition toward a net-positive state.

4. Creating just biodiversity markets, by learning from carbon markets

Carbon has become a form of currency in carbon markets, primarily driven by the credit/capital side of the equation. However, this concept, originating from the global north, is increasingly questioned by the global south. The value of what lies underground often pales in comparison to the value of the carbon sink on the ground. This realization prompted us to critically examine the failures of carbon markets and determine how we can create better biodiversity and nature markets.

5. The danger of commoditising nature

Carbon markets have proven ineffective and have often perpetuated the maintenance of the status quo. Approaching nature conservation from a transactional perspective is misguided. Our legal systems currently allow the exploitation of nature for profit, which lies at the core of the problem. Instead, commoditisation should be seen as a last resort, as we face significant challenges in preserving biodiversity.

6. Learning from the failures of carbon markets to create better biodiversity/nature markets

• Define the commodity carefully to ensure fair development across the globe and prevent abuse.
• The transaction should focus on the real transaction itself, rather than being a subsidiary of another transaction that justifies the destruction of nature elsewhere.
• Conduct an in-depth analysis of transactions before allocating commodity pricing, considering the inequality in resources being damaged, some of which are irreplaceable (e.g. ecosystems that could take years or decades to redevelop).

7. Monitoring and assessing nature continuously

To effectively monitor and assess nature, we explored the advancements in technology, such as ecoacoustics and DNA sampling. These innovations hold promise in providing holistic and accurate evaluations of nature. However, we questioned whether technological advancements alone would be sufficient to accurately put a price on nature.

8. Finding hope

Despite the weighty nature of our discussions, it was important to find hope amidst the challenges. Many participants expressed concerns and a lack of optimism, making it difficult to shift our focus from limitations to solutions. However, Chatham House provided us with a space to be playful and encouraged us to challenge ourselves by adopting the Einstein principle: “Don’t use the thinking of the past to try and solve the problems of the future.”. This mindset prompted us to explore new concepts, such as:

• Maybe the concept of externalities should be replaced with something new. Can we explore new concepts?
• How can we all become biodiversity caretakers?
• How can we ensure human well-being is sustainable?
• Could biodiversity be the ultimate wealth, the true north of our economic system?
• Can we shift the conversation about growth? What is true growth within the sustainability context?
• Within the current economic system, what does success look like?

9. Time & inclusivity: Can we slow down to the pace of nature rather than the pace of innovation?

Before identifying markets and determining what is positive or negative, we recognised the need to educate people to become local biodiversity scientists. Very few are equipped to assess, diagnose, and understand the nature around them. Ecology is not just about “the green stuff” or identifying species; it is also about understanding them in their specific time and place. Empowering communities and qualifying our way of life locally, rather than imposing compliance, emerged as valuable approaches.

Overall, the session provided a platform for meaningful discussions and diverse perspectives. By exploring various facets, we gained a deeper understanding of the challenges and potential solutions in valuing and conserving nature in a sustainable manner.

My two personal takeaways.

1. When the caution arose about putting a price on nature, I wondered: “What price do we currently put on nature?… is it ZERO?” Is it better or worse than an imperfect price, or would incorrect pricing potentially lead to more damaging incentives? For example, overexploitation of underpriced natural assets or disengaging the market from its intrinsic motivation to protect nature.
2. If the economy is focused on exploiting nature and a complete overhaul is needed from a systemic standpoint, what actions can we take now that time is running out? The underlying assumption is that if we failed to address the issue when we first recognised the unsustainability of the system’s growth, it is unlikely to change now and we must now find a way to leverage the existing flawed system to move forward. Rather than making superficial adjustments and falling into the shortcomings of carbon markets, how can we effectively utilise the existing flawed system and make enough modifications to bring about meaningful change?