S+B: Aren’t many environmentalists skittish about putting a value on ecosystems?
DAILY: Some are. To them, it’s a slippery slope that risks giving in to the “dark side” of economics with no ethics. A wetland with high flood control value might be protected, whereas one with only aesthetic and recreational appeal may not measure up against a shopping mall. I share these worries, but we need to work pragmatically and confront the current situation. Let’s face it, most major decisions are made on a cost-benefit basis, and natural capital is assigned zero value.
The natural capital approach presents a chance for nature to win big, and to meet people’s needs at the same time. We’ll never find these win-win alignments of conservation and economic development if nature remains a zero on corporate balance sheets.
The growing docket of win-wins in government and business policy backs the promise of this approach. These values are being factored into decisions around the world, and many businesses, I think, are starting to treat natural capital differently.
For instance, decision makers at insurance companies like Swiss Re are now aware of the environmental dimensions of the risks they insure. They can assess the flood risk resulting from farming or building practices across a broad landscape. BP and other resource-intensive corporations now have ecosystem services teams. And the Natural Capital Project is inundated with demand for ecosystem analyses.
S+B: The amount of investment necessary for the preservation of ecosystems and the diversion of land to natural uses must be immense. Where will the money come from?
DAILY: It will come from recognizing the unbearable risks and costs that result from the ongoing hemorrhaging of natural capital, from recognizing the significant return on strategic investments in natural capital, and from designing finance and policy mechanisms that reward the investors.
This is conservation for the 21st century. It’s not like the conventional, donor-driven approach, in which the ability to save Earth’s life support systems rests on finding generous people to underwrite the whole deal. This strategy has bought some critical time, but if we depend only on donors, conservation is ultimately doomed to fail.
We are talking today about a broad-based issue: protecting critical public services, like climate stability, flood control, and food security. Two-thirds of our crops and most natural vegetation need active and diverse insect populations to transfer pollen. Spending money on species diversity sounds impractical, until you learn how much money California’s almond producers have lost because of the collapse of bee populations.
Every locality has its own symptoms of decline to manage. If you live just about anywhere that’s not soaked with rain, you are dealing with water scarcity. If you’re in a hurricane belt, you know about climate change and the risk of intensified storms. In the western U.S., we’re having massive wildfires. You can never say exactly which fires resulted from human-induced climate disruption and which were just bad luck. But the overall pattern is undeniable. At the same time, there are more and more new practical solutions. These solutions have the same elements — prices and table manners — wherever you look.
Food and Drug Dilemmas
S+B: You mentioned the insurance, mining, and forestry industries as early adopters. But in other industries the solutions seem more difficult. For instance, agriculture, fishing, and food products companies are going to be under pressure to supply more meat, fish, grain, and sugar around the world.
DAILY: I agree. We will soon have 2.5 billion more people to feed, just as climate disruption makes agriculture harder. There’s a major international meeting every week on food and the environment. A lot of agricultural companies take this seriously; they’re looking for ways to change production practices to be economically profitable but also much more sustainable. It comes down to quantifying the costs and benefits of alternative practices. There are a range of options, and a lot of research going on.