Reflection on comments to the discussion paper "Economic Valuation and Payment for Environmental Services"

Reflection on comments to the discussion paper "Economic Valuation and Payment for Environmental Services"

First of all, I would like to thank all contributors who took the time to comment on this discussion paper, and with their comments contribute to a public debate about the assumptions and interests behind the new economy with "nature" and its valuation techniques. I appreciate the constructive critique and food for thought commentators have offered. There is still a way to go to more fully understanding and articulating in an accessible way the nature of the change this latest round of economic valuation of nature is leading to.

Although I hold a university degree in biology and nature conservation, my primary interest in this debate about economic valuation of nature is as an activist, and in solidarity with those who resist economic development that destroys against their will the livelihood and the land that provides this livelihood. From this vantage point, the realities of "asymmetric power relations of stakeholders in the capitalist world", as Mirco Kreibich puts it, are clearly visible. This vantage point presents a different perspective than a purely theoretical, or scientific enquiry would, at the politics that shape the abstract concept of economic valuation as it becomes applied policy and affects the lives and livelihoods of people. While I am aware that economic valuation can make "nature" visible to the theoretical eye of the economist or academic scholar or consultant, over 20 years of engaging with communities resisting the loss of "nature" that sustains them has also taught me that it is not the "theoretical eye" but the political and greedy eyes working in concert that will determine how an abstract concept is applied.

What has informed the analysis presented in the discussion paper is thus the tracking of how politics and asymmetric power relations have been shaping the policies that apply the new economic valuation techniques. Such tracking reveals that the policy instrument of 'offsetting' has gained particular prominence: Research by The Biodiversity Consultancy, Cambridge, has shown that "government offset policies are rising rapidly"; the corresponding graph shows the cumulative rise in number of countries, states and provinces with offset laws or policies since 1964. It is for this reason that much of the discussion paper has dealt with this most visible and politically popular application of economic valuation of "nature".

Of the many valuable points made by commentators, I particularly appreciate the reminders about the importance of accuracy in the use of terminology and conceptualization. I fully agree with Clive Spash's point about why 'cost-shifting' would have been the better term to use instead of 'externality'.

Another point I take away from the comments is the importance to state more clearly that and how the process of selective counting has been a companion of capitalist accumulation for centuries.  However, while economic valuation and the creation of fictitious commodities from "nature" are not new, there seems to be a new quality to the current round that, I believe, is important to recognize. This new quality is perhaps most easily seen when economic valuation of "nature" is used to give parity to things that are fundamentally different.

When this purported equivalence is incorporated into environmental legislation as an 'offset', it provides justification to destroy or pollute in excess of a legal limit on the basis of investment in the promise to restoration elsewhere. Rio Tinto's "Quality Hectare Units", for example, helped the company acquire a mining license to destroy a unique littoral forest with high species endemism on the promise to offset the destruction, including with restoration of an equivalent number of "Quality Hectare Units" in a different forest type, with a different set of species and ecological functions. As Sian Sullivan notes, "What we are left with […] is not a gain but a loss in one place, plus investment in something different somewhere else."

This particular and to date most widespread application of economic valuation of "nature" is already proving to drive a double land grab: Companies grab community land not just to mine but another community elsewhere is being deprived of access to the land because the forest, say, that sustained the community, is now being claimed as an offset by a mining company, or for a forest conservation project that is financed through selling carbon credits. Ivonne Yanez mentions the role of state institutions in creating the policies that enable offsetting-as-land-grab by highlighting how this process is presenting itself in Ecuador, Kathleen McAfee reminds us that there is no shortage in literature about REDD+ as a land grab. What does the integration of offsetting into environmental law mean for resistance movements in such a context, and when conflict over extraction of minerals, and use of land more generally, is becoming ever more violent and militarized?

For those who look at economic valuation of "nature" through a political economy lens, this context of violence and militarization perhaps lead to different conclusions and weighing of advantages and disadvantages than approaching economic valuation of nature primarily, or even exclusively, as a matter of scientific enquiry. Konrad Ott's comment provided much-appreciated food for thought in this regard. He puts his finger on points where I skipped over detail or where a more nuanced presentation of the argument might have allowed for more fruitful online discussion. One such case in point is his argument that "logical implication" dictates that economic visibility of nature does not per se imply "commodification of nature, market solutions, or private property rights upon natural assets."

I agree, and state as much in the discussion paper (p. 19). However, it's not out of standing "in fear of the power of economic agents" but out of acknowledging the asymmetry of the "power of economic agents" in the (capitalist) world we live in, when I argue that a discussion of economic valuation of "nature" as if these asymmetries did not exist will lead to different conclusions about the merit or otherwise of making more of "nature" visible in economic terms.

Daniel Speich Chassé very compellingly describes the limits of a “Back now, broom, into the closet!” approach in 'The use of global abstractions: national income accounting in the period of imperial decline'. Economists involved in the early stages of developing indicators and computing methods for what eventually became known as the GDP witnessed how they were unable to prevent economic valuation techniques they had emphasized were unsuitable for comparison of different national economies being used for precisely that purpose – with devastating consequences on international development policy until this day.

Another aspect that perhaps distinguishes this current round of economic valuation of "nature" from previous rounds is the ambiguity of the nature of this new bearer of value that is being created. Is, for example, the current round of economic valuation of "nature" leading to the creation of a new fictitious commodity? I am not sure. Perhaps, it's not so much a process of creating a new commodity but capital accumulation through rent-seeking. Does it matter for grassroots resistance against destruction of livelihoods and "nature" whether capital accumulation takes place through creation of a new commodity or through rent-seeking? Does it make a difference for mobilizing against destruction of "nature" and livelihoods whether value is derived from the absence of an activity rather than through the extraction of a physically graspable thing such as a tree or minerals?

Finally, one aspect that the discussion paper omitted to even touch upon is the concept of scarcity. There is a need for more critical exploration of where and how neo-Malthusian ideology manifests itself in the current economic valuation of "nature" debate. Larry Lohmann's Malthusianism and the Terror of Scarcity provides an important contribution to that debate.  

Berlin, 21 December, 2015

Jutta Kill

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