Accentuate the Positive
Prior to the storm of human ingenuity known as the Industrial Revolution our planet was not immune to catastrophe. Earth’s long history may best be described as a continuous ebb and flow of conditions alternately hospitable and hostile to life. The continuum of increasing biological abundance followed by varying degrees of extinction has been packaged for our comprehension into what is now widely recognized as the “Big Five”.1
I will cite just two examples: The End Permian (Permian-Triassic) extinction of 251 million years ago - the “Great Dying” was caused by massive volcanism in the convulsions of an evolving planet. The End Cretaceous extinction (66 million years ago) is now widely believed to have been caused by Earthʼs collision with a 6 mile wide asteroid. In one fell swoop it put an end to the dinosaurs and made possible our rise to dominance.
Most of these “events” and the extinctions that followed were the result of complex seismic and atmospheric conditions and the exact course of events is the subject of some debate. However, we can say with absolute confidence that none of them were caused by any one species. Until now.
Welcome to the The Sixth Extinction. In her recent book Elizabeth Kolbert concludes through careful examination that we are the cause of the next big event. This epoch, the Anthropocene, OUR time, is the only one in which one species has managed to change the course of Earth’s natural history.
Kolbert illuminates a list of examples of our devastating impact with an even hand. Whether inflicted by over-hunting, pollution, the destruction of habitat, or transportation of invasive species, every casualty can be traced back to humanity’s myopic appetite for forward motion, progress, and material wealth. Because the casualty list is long and most of us feel powerless when we hear the tragic stories2 I will resist the temptation to recap her examples. I will, however, briefly reference one casualty - coral reefs - as hopefully we can all accept some degree of complicity when the devastation is caused by our collective carbon footprint.
Even climate change deniers3 are beginning to feel the impact of global warming. But it is the loss of our planet’s biodiversity, not our thermal comfort, that is most disconcerting. Ocean acidification (caused by the dissolution and reaction of CO2 in water) is threatening coral species with extinction at rates that exceed those of terrestrial animal groups. The reefs (resulting from corals’ secretion of calcium carbonate) which serve as the home to biodiversity beyond our capacity for imagining will cease to grow in the next 50 years.4 There is no need to wait for bad news, however, as Earth’s biodiversity, both marine and terrestrial, is already as low as it was during the End Cretaceous extinction.
But bad news is not the focus of this essay despite early evidence. We are enthusiastic, industrious, profit driven souls capable of revolutionary innovation and there are many examples of our capacity to modify our behavior to serve a desperate cause5 particularly when it threatens to impact our wallets.
Can we course-correct in the face of mounting evidence? As profit driven souls can we find a new business model that incorporates the value of nature? The answers are yes and yes.
Natural Capital Accounting
Every company, large or small, has “externalities” and typically none have a place on the company ledger. Air pollution, for example, is a visible externality of manufacturing, the cost of which is generally paid by others. If the cost of these externalities were understood6 and charged, as they should be, to the business of origin, managers would quickly take steps to curtail destructive corporate behaviors.
Natural Capital Accounting (NCA) places economic value on nature by identifying, measuring, and managing externalities. Many of the guiding principles have been developed by TEEB (The Economics of Ecosystems and Biodiversity) under the guidance of it’s team leader Pavan Sukhdev. Since 2007 they have produced a series of studies and guidance manuals that aim to standardize methods for natural capital accounting.7 This is an emerging field with increasing acceptance and credibility in governmental policy circles and the establishment of protocols and standards is well underway. In fact, organizations like the UN and the World Bank are beginning to invest heavily in this new paradigm as evidenced by these initiatives:
SEEA (System for Environmental-Economic Accounts): The UN Statistical Commission recently adopted this protocol to provide an internationally agreed upon method to account for material natural resources like minerals, timber, and fisheries. http://unstats.un.org/unsd/envaccounting/seea.asp
WAVES (Wealth Accounting and Evaluation of Eco-Systems): A World Bank global partnership launched at the 2010 Convention on Biological Diversity WAVES will promote sustainable development by ensuring that natural resources are mainstreamed in development planning and national economic accounts. Work plans include compiling accounts for natural resources like forests, water, and minerals, as well as experimental accounts for ecosystems like watersheds and mangroves. http://www.wavespartnership.org/
NCA is also making it’s way into the private sector as for-profit companies blaze their own trail. In 2010, a consultancy named Trucost, was commissioned by PUMA to assist in developing their Environmental Profit and Loss Account (EP&L). Admirably, all of this information, their process and their reports, are available to the public due in large part to the courage and confidence of Puma’s CEO, Jochen Zeitz, and can be found readily online.
As with any transformational idea forged by caring thought leaders, widespread acceptance may be years away - the amount of time inversely proportionate to the gravity of our perceived threat. Regardless, these visionaries are defining a new era of sustainability metrics in which degradation of our ecosystems and biodiversity will be quantified and revealed as an untenable expense. The relentless quest for an economic upper-hand is the root cause of environmental degradation in the Anthropocene and a wholesale reconsideration of our economic models is essential. The valuation of nature, acknowledged through natural capital accounting is cause for great hope. Given the foibles of human nature it may be our only hope. After all, Mother Nature has limited natural capital and it is up to us to recognize the economic imperative for conservation.
1In a 1982 paper by Jack Sepkoski and David Raup.
2 Ex 1: 10’s of thousands of giant sea turtles are killed every year as “bycatch” (the unintended target of commercial fishing). Ex. 2: In the tropics 14 species per day are being lost according to a calculation based upon loss of habitat by biologist E.O. Wilson
3 Timothy Egan put it succinctly in a recent NYT article: “It is human nature, if not the American way, to look potential disaster in the face and prefer to see a bright and shining lie.”
4 Studies conducted at volcanic vents near Castello Argonese, Ischia Island, Italy
5 The conversion of American automobile production to ﬁghter planes during WW2, for example.
6 The world’s top 3000 businesses are estimated to have annual externalities of almost 2.1 trillion dollars (or 3.5% of the global GDP) - A Trucost analysis. www.trucost.com
7Pavan Sukhdev’s excellent TED Talk (“Finding the Economic Invisibility of Nature”) can be found online