BANKING NATURE: THE PROGRESS AT ALL COSTS

Could economic and financial markets succeed in saving the planet ? The advocates of this idea are Investment funds, bankers, financiers. For almost 10 years they have been deeply interested in the ecological crisis. They tell they can protect the earth in their way, by financiering nature. However, anything which could lead to commodification is a guarantee for the collapse of nature. For example it makes nonsense concerning environmental amenities which are offered by nature and are so a priori free of charges, non-quantifiable, and thus “inestimable”.

EU Carbon Price: euro per tonne

                                EU Carbon Price: euro per tonne

We use nature because she is valuable but we lose nature because she’s free”

This creed is known for a long time, according to Ronald Coase (1910-2013) if private ownership of natural or environmental resources exists and protections against trespass and nuisance are effective then bargaining within the context of a regime of liability rules can indeed resolve conflicts over resource use and negative externalities, such as pollution. However, this rule applies only if there is no cost of transaction and perfect symmetry of information.

This theory, mixed with Pigou’s theory on taxation led to the famous trade of greenhouse gas emissions. You own credit to pollute, and if you have not enough credits, let’s bargain the excess on the market and then on the financial market ! Thus, allowing industries to pollute even more, but for an unacceptable price. How much ? 8 euros per tonne in 2015. In other words, 8 euros for the total emissions of 20 round-trips between Paris and London by plane…

 

A new paradigm : appropriation and speculation on the living

It is announced as an economic reply to the environmental crisis, the biosphere has to be reinstated in the human activities, in the circuit of the capital. It is the way of pursuing the growth model so that it becomes “cleaner”. The presupposition is that this growth model is necessary for poverty reduction. But behind this appropriation of nature remains an illusion : preserve the bases of a system that has in fact led to the economic and ecological crisis.

 

How much for this original forest ? What is the value of plants or insects ? What is the price for bees (in the U.S.A. no bees are living in their natural state anymore) ? This year, Californian almond farmers paid up to $180 a colony, and their appetite for the insects pushed up prices for growers all over the country. Rental fees can drop by more than a factor of 10 later in the spring, as beekeepers look for a place to leave their bees until a more lucrative season. That’s market price for pollination.

 

Nature as free eco-systemic services may be monetised. For years economists have theorized methods to evaluate the price of nature, its benefits and externalities. For years also, and particularly in the U.S.A., insurance companies and banks have speculated on the deforestation or extinction of certain species.

Indeed, insurance is not only a synallagmatic contract anymore. It is financial derivatives, it means financial instruments linked to a specified commodity, through which specific financial risks can be traded on financial markets in their own right. This model led to the financial crisis in 2009, at the end of which millions of people lost their house, pension and saving.

Financialisation: a disease we should overcome

We are currently facing 2 models. The first one assumes that human activities, particularly industries may destroy biodiversity and then founds that it is necessary to adjust these activities to minimise the risks.

The second one promotes a model of production and consumption that is unquestionable and which assumes that biodiversity should be a variable to human and industry activities, represented by compensation of damages…. But what is compensation in a world that consumes one and an half earth per year ? What is compensation compared to the need of regeneration of nature, the uniqueness of biodiversity and species extinction ?

Putting a price is nonsense. Where prices were fixed, nature was destroyed : e.g. think about mining, oil, wood harvesting activities ? All those commodities have prices. This ideology of price places natural resources in the hands of business men that do not care of general interest and generations but only of return on investment.

This anthropocentric vision appears for some persons an obvious choice…. Which is absolutely not the case and may rather lead to nothing else than a dead end.

 

 

 

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