Rio-de-Janeiro

World Bank pushes ‘natural capital accounting’ at Rio+20

Cross-posted from Climate Connections

By Keith Brunner, June 29th, 2012

UK deputy prime minister Nick Clegg was loudly interrupted by someone in a front row wearing a mask of his own face.

“The Great Nature Sale!” trumpeted Clegg’s imposter, “brought to you by the British Government and the World Bank.”  Sarah Reader, a campaigner with UK-based World Development Movement, rose from her seat and began hawking newly privatized natural areas to the audience, as security moved to escort her from the room.  “We’ll be selling off the river!  The sky!  Even the biodiversity!  Sumatran tigers, they’re for sale too.  You thought there wasn’t more profit in the world, but there is.  Banks, come and get your profits!”

Reader’s intervention at this high level side event of the UN Rio+20 Summit last week in Rio de Janeiro drew attention to a major theme in the battle over the controversial Green Economy being advanced by the United Nations and some governments.

Proponents of the Green Economy, such as the United Nations Environment Programme and the World Bank, claim that the only way to address ecological devastation is to view ecosystems and biodiversity as a form of ‘natural capital’ which must be ‘properly valued’ and accounted for in national accounts, financial products and services, and private sector supply chains.

Social movements, indigenous peoples, and civil society networks have denounced this approach, arguing that it will accelerate land and resource grabs by the private sector.   At the Cupula dos Povos (Peoples Summit), an entire plenary was dedicated to the “Defense of common goods against commodification.”

“Green Economy is the entry point that they’re using to further commodify and financialize nature, life and our ecosystems,” says Michelle Maynard, of the Pan African Climate Justice Alliance.  “It is the rights of nature and the rights of people that need to be upheld, and not the narrow interests of the financial sector and the banks.”

Despite opposition, financial institutions, governments, and some NGOs are moving forward with natural capital accounting within the framework of the Green Economy.  At the Rio+20 conference last week, the World Bank hosted several “High Level Dialogues,” celebrating initiatives such as the Natural Capital Declaration, a commitment by CEOs from the finance sector to incorporate natural capital into their balance sheets.

At the heart of the controversy over natural capital valuation is the role that markets are allowed to play in society, and to a larger extent, whether the ecological and social crises resulting from industrial capitalism can be solved through even more capitalism.

Critics charge that natural capital valuation constitutes a vast expansion of the market into the commons, a new wave of enclosure and privatization of previously public goods soon to be valued by corporations as carbon, biodiversity and other ‘ecosystem service’-backed commodities.  They point to the explosion of land grabs over the past decade across South America, Africa, and Southeast Asia, many driven by demand for agrofuels, and warn that the ‘natural capital rush’ will have grave impacts on already marginalized communities.

“In seeing this new makeup called the Green Economy, we have to oppose it,” said Juan Herrero of La Via Campesina, the international movement of peasant and women farmers, migrant farmworkers, landless and indigenous people.  “We have been resisting these expanding capitalist markets for a long time.”  La Via Campesina has been one of the most outspoken social movements opposing the failing carbon markets and their expansion into forests through the UN and World Bank Reducing Emissions from Deforestation and forest Degradation (REDD) program.

“Instead of expanding the scope of markets to every domain of nature,” states BankTrack, a global coalition tracking private sector investment,  “creating a true green economy would start from the opposite; reversing the tide of commodification and financialization, reducing the role of markets and the financial sector, acknowledging the limits of business versus other spheres of life, and recognizing the collective responsibility of all people for, and strengthening the democratic control over the worlds’ ecological commons.”


Proponents of natural capital valuation, however, sidestep the question of market expansion and it’s impacts on vulnerable communities, and instead attempt to frame the debate around access to information.  Rachel Kyte, vice president for sustainable development at the World Bank, states that, “By saying we do not want natural capital accounting, we would be saying we are better off being ignorant…By having information and knowing more about it, a country increases its power over its own economy.”

Kyte responds to charges of commodification and enclosure of the commons by clarifying that, “[Through natural capital accounting] we are not talking about ‘pricing’ nature but ‘valuing’ it [emphasis added].  By valuing it, you are enabling better economic decisions.”

Echoed by other prominent Green Economy advocates, Kyte’s claim that the assignment of a dollar value to biodiversity and ecosystem services is different and separate from the ongoing development of markets in these services has led to sharp criticism from opponents.

In a series of telling blog exchanges following the action at the High Level Dialogue, World Development Movement cmpaigners dryly note that, “Rachel Kyte is very much mistaken if she thinks that the companies behind the Natural Capital Declaration are interested in the intrinsic value of nature as opposed to turning ‘natural capital’ and ecosystem ‘services’ into priced, tradable commodities.”

They point out that “The Natural Capital Declaration envisages the introduction of new ‘risk management tools’, which, seeing as the proposal is coming from financial sector companies, is likely to mean the further development of new financial hedging mechanisms such as ‘biodiversity bonds’ that would take control of ‘natural capital’ away from governments and the people who depend on it and put it at the mercy of highly unstable financial markets.”

Kyte responds: “We agree that including the value of nature on balance sheets alone is not an end in itself. But having good information is the critical first step towards sustainable management of natural resources….Once armed with information like how much a mangrove contributes to fish breeding and how much a coral reef protects a coastline from storm surges, then countries are in a better position to decide whether to keep these natural assets intact or allow their destruction for commercial uses.”

So what are the risks of reducing conservation decisions to a financial cost-benefit analysis?  Is natural capital accounting an economic “tool,” as UNEP Executive Director Achim Steiner has claimed, or is it the expansion of a market-based ideology, which threatens to undermine traditional environmental regulation and land tenure arrangements?

In their exchange, World Development Movement built off of Rachel Kyte’s coral reef example, noting that, “We already know that coral reefs can protect coastlines from storm surges – but if we express this in a dollar figure, the implication is that it is acceptable to trash it if the profit opportunities are sufficiently high.”

“…[T]his kind of simplistic utilitarianism ignores the fact that…the benefits of destroying the reef are likely to accrue to investors rather than the poor, who are often the most dependent on free natural resources. So a government or private company may decide to let the reef die because the overall monetary return of preserving it is less, ignoring the fact that the people impacted by the decision will be the poorest.”

Social movements point out that while corporations and neoliberal states clamber to pump up the deflated carbon markets and expand them into new areas through ‘natural capital’ accounting, the voice and intention of the grassroots couldn’t be clearer.

“We see the goals of UNCSD Rio+20, the ‘Green Economy’ and its premise that the world can only ‘save’ nature by commodifying its life giving and life sustaining capacities as a continuation of the colonialism that Indigenous Peoples and our Mother Earth have faced and resisted for 520 years,” begins the Declaration of Kari-Oca II, signed last week by over 500 grassroots indigenous peoples from many countries.

“The Green Economy is nothing more than capitalism of nature; a perverse attempt by corporations, extractive industries and governments to cash in on Creation by privatizing, commodifying, and selling off the Sacred and all forms of life and the sky, including the air we breathe, the water we drink and all the genes, plants, traditional seeds, trees, animals, fish, biological and cultural diversity, ecosystems and traditional knowledge that make life on Earth possible and enjoyable.”

“Mother Earth is the source of life which needs to be protected, not a resource to be exploited and commodified as ‘natural capital’…The Green Economy is a crime against humanity and the Earth.”

In a widely publicized debate between Pablo Solon, former Bolivian ambassador to the United Nations, and UNEP executive director Achim Steiner- a chief architect of the Green Economy- Solon remarked:

“But why recognize nature as capital?  To create an anti-capitalist society?    Please, we are not naïve children.  The concept is clear…When value is assigned in capitalism, it is so it can be introduced into the market.  This is the goal of the Green Economy.”

Solon said, “We want a real change.  No more capitalism.  We believe that capitalism has created this [crisis], for nature and for humans.”

Steiner’s response was that polarization between capitalism and anti-capitalism would lead to ‘the world’ not being able to ‘move forward.’

To which one might ask ‘whose world’ Steiner is referring to.  And given global capitalism’s march towards the ecological precipice, might slowing down be exactly what we need?

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