The economy of nature — where are we at?
With the intensification of natural disasters such as floods and droughts due to climate change, governments and corporations around the world have started to investigate ways to reduce the human impact on nature. This trend has been strongly conveyed recently with radical shareholder rebellions and paradigm shifts in the oil and gas industry. However, such approaches to promoting environmental change have practical limitations because processes in the modern world are driven by judicial and economic systems. Thus, further integrating and accounting for natural services provided by our ecosystems requires us to develop laws, policies, and economic incentives.
In 2012, the UN developed the system of Environmental Economic Accounting (SEEA). This was a milestone towards recognizing the value of ecosystem services. As recently as March 2021, the United Nations adopted a new framework to integrate natural capital into economic reporting, going beyond Gross Domestic Product (GDP) by reflecting the economy’s dependence on natural resources. This framework provides novel guidelines for governments to express ecosystem services in monetary terms and integrate natural capital in economic reporting.
Assessing the monetary value of ecosystem services is a key step towards integrating nature into our economy. However, such progress is still insufficient to attract investment and integrate into financial markets. For this reason, we need to codify the value of ecosystem services through legislation and policies to transform these assets into quantifiable natural capital. In 2017, the environmental lawyer D. Boyd developed a new legal and jurisprudential theory called the Rights of Nature. Since then, a growing number of countries are granting nature legal personhood rights. Why is that so important? Well, without legal rights the natural world is discussed and valued only to the extent that it is of immediate use to humans. Being recognized as a legal person gives nature the fundamental right to exist and prosper in a healthy environment. More importantly, it also gives legal power to pursue infractions against its rights. Once we have a monetary value for ecosystem services, and legal and economic frameworks in place, their importance can be quantified and sustain financial markets such as the carbon credits market. However, like other forms of capital, natural capital can be depreciated. Depreciation emerges from its depletion, degradation, or exploitation. Therefore, to conserve and increase our natural capital we will not only need to protect it but also monitor and track these assets thoroughly. In the case of whales, it means that we must boost our efficiency and efficacy in detecting them in order to enable monitoring programs over the large areas they inhabit.
Canada wants to be a leader and pioneer in preserving its natural assets and transforming these assets into natural capital. As a member of the United Nations, Canada has adopted and is implementing the new SEEA. Nature is also being legally recognized in Canada. In April 2021, the Magpie River located in Quebec was granted legal personhood rights. This body of water now has the right to exist, to flow, maintain its biodiversity, and can take legal action if those rights are not respected.
This desire to change how we see and value nature in Canada is also reflected in the Federal Government’s new environmental budget of 4.1 billion$ to conserve and protect its land and oceans; 976.8 million$ dedicated to protecting at least 25% of its ocean by 2025. However, while Marine Protected Areas can be an effective tool to protect our marine capital, they will have very little impact if they are not monitored efficiently and adequately in the future.
Canadian cold waters are home to a plethora of whale species such as blue whales, finbacks, humpback, North Atlantic right whales. Each of these species and populations provides a number of natural services that we explored in a previous blog called the cost of killing a whale. In this blog, we also mentioned a recent paper from the IMF assessing the monetary value of great whale services at $2 million USD per individual. This study provides an essential benchmark to evaluate the natural capital of whales in Canada. However, the true monetary value of whale ecosystems can only be accrued if we investigate ecosystem services specific to species, population, and their distribution areas across Canadian waters.
Finally, while marine mammals are in part protected in Canada by the Species at Risk Act, and the Convention on International Trade in Endangered Species of Wild Fauna and Flora, these are insufficient to transform our whale ecosystem services assets into capital. Granting whales personhood in Canada would provide strong legal rights and representation that would enable policymakers to ensure adequate monitoring of these assets with enforcement measures and incentives to attract private sector involvement. With proper legal representation and policies in place, whale ecosystem services could be traded in the carbon markets, allowing Canada to profit not from exploiting nature, but from protecting it. In the coming weeks, we will talk in more detail about the carbon market and Whale Seeker’s role in this developing field!
