An ecological crisis that is becoming increasingly hard to ignore is confronting policymakers with a dilemma: they are being called upon to protect the conditions for life on Earth without overly hampering industrial production and economic growth.
The Green Economy promises to resolve this dilemma and make economic growth compatible with protection of nature. In truth, however, the Green Economy is not about rethinking the economy, but about redefining nature so more of nature becomes accessible to capital. Nature becomes “natural capital”, which provides “ecosystem services”. New units of measure turn natural environments that are unique to a particular location into a nature divisible into isolated units that can be measured, assigned a value and interchanged.
Regulatory approaches designed to protect biodiverse areas and set limits for particularly toxic or harmful substances are also increasingly facing this dilemma. On one hand, it has been asserted repeatedly that conservation does not work because biodiversity is still being destroyed and the pace of the destruction is accelerating. On the other, land-use planners and corporations whose business models are based on unrestricted access to natural resources and land are calling for a more flexible regulatory framework, as conventional environmental legislation that has been in force since the 1960s is increasingly hindering their access to the remaining intact natural areas.
In this context, the Green Economy promises to ensure the environmental soundness of capitalist economic activity. Proponents of the Green Economy see “making nature visible” as an important prerequisite: in their argument, only if nature is represented in economic terms does it become visible to economists, corporations and policymakers, and turn “ecosystem services” into a relevant economic factor. “These so-called ecosystem services mainly take the form of public goods and services whose economic invisibility has been, up to now, a key reason for their undervaluation, mismanagement and ultimately loss,” noted the United Nations Environment Programme (UNEP) in 2011. According to proponents of the new Green Economy, making the economic value of nature visible provides a much more solid basis to argue convincingly for the conservation of natural resources.
Redefining nature for capital markets
A look at the discourse, methodologies and instruments of the Green Economy, however, shows that this is not in fact about rethinking the economy. Rather, the economic valuation propagated in the context of the Green Economy aims to redefine nature so its functions such as carbon storage or water filtration become accessible to capital markets. This redefinition of nature as “natural capital” that provides “ecosystem services” permits the life-supporting functions of forests, meadows, marshes and bogs as water and carbon storage and a haven of biodiversity to be quantified in economic terms. Once they have been assigned economic values, comparing “ecosystem services” from different locations becomes possible. As a result, they become interchangeable and can be traded. The definition of new units also permits prices to be applied to individual “ecosystem services”.
The argument that the previous lack of economic evaluation is causing the destruction of nature, leads to searching for solutions and strategic approaches that focus on the commodification of “ecosystem services” and the contemplation of nature as "natural capital". As a consequence, many structural causes of the environmental, climate and water crises, as well as the loss of biodiversity and arable soils, become invisible and are no longer be taken fully into account in the search for real solutions and ways out. An extremely complex problem is reduced to economic indicators, making an actual solution to the crises even less likely, as fixing the symptoms would take precedence over fighting the causes.
Compensating for pollution and destruction
It is not surprising that national governments, corporations and international pioneers of the economic valuation of nature such as the World Bank and UNEP mainly rely on trade in compensation credits. Laws that formerly imposed penalties for exceeding limits of pollution and environmental destruction now permit violations in exchange for the payment of a fee. This facilitates companies in exceeding legal limits in cases where environmental destruction or pollution is profitable for them. “The goal is to transform environmental legislation into tradable instruments,” says Pedro Moura Costa, founder of the BVRio Environmental Exchange. The increasing anchoring or strengthening of the compensation approach is a paradigm shift in environmental legislation, because compensation credits suggest that it is possible to reconcile climate protection and biodiversity with the growth of industrial agriculture, air traffic, mining, etc. Not least for this reason, the concept of compensation credits has become a central theme of the Green Economy.
New measurement units and the practice of issuing compensation credits turn natural environments that are unique to a particular location into a natural construct consisting of units that can be marked off, assigned a value and interchanged. The relation of humans to nature and the social relationships that make each place distinctive and incomparable are ignored out of necessity, even though they are deeply impacted by this new understanding of nature and its associated forms of appropriation.
This article is part of our dossier "New Economy of Nature".
- Fatheuer, T., L. Fuhr, B. Unmüssig (2016): Inside the Green Economy - Promises and Pitfalls.
- Kill, J. (2015): Economic Valuation and Payment for Environmental Services. Recognizing Nature’s Value or Pricing Nature's Destruction? Heinrich Böll Foundation e-paper.
- Fatheuer, T. (2014): New Economy of Nature – A critical introduction Heinrich Böll Foundation Publication Series Ecology, Volume 35.