No Accounting for Taste: Natural Capital Accounting and the Financialization of Nature
If you lie awake at night wondering what can be done to better manage the environment, the latest and greatest economic solution for doing so — natural capital accounting — might give you nightmares.
This week in Edinburgh, Scotland, corporate and financial interests will meet for the World Forum on Natural Capital to discuss this latest green washing initiative. Featured participants include representatives from the Royal Bank of Scotland (RBS), Nestle, The Coca-Cola Company, KPMG, PricewaterhouseCoopers, Standard & Poor’s, Veolia Water, the World Bank Group and several other major international corporations and organizations.
The claim behind natural capital accounting goes something like this: nature is destroyed because it does not have a monetary value, and companies, countries and financial actors do not know its worth and cannot account for it in their activities. By assigning a price to nature, these actors can better see its value and then account for what gets destroyed via inputs to production or other economic processes. Thus, nature and its use can be accounted for as inputs and outputs to a country’s GDP or a company’s bottom line, and ultimately be sustainably managed. In other words, nature will be better managed by giving control of it to the very actors destroying it.
Accounting for nature requires assigning property rights, as well as privatizing and commodifying it. Taking nature out of public and common control, and placing private interests — unaccountable to the public — in charge of it. This seriously jeopardizes democratic processes necessary to the equitable management of the environment.
Natural capital accounting also requires simplifying the wildly complex, incommensurable and invaluable worth of nature into a single monetary exchange value. It attempts to assign a monetary value where none exists, extending economic values to non-economic entities. But accurately measuring this worth is incredibly difficult, often leading to values based off of subjective and incomplete information.
Pitched as a neatly packaged way for companies, financial actors, and countries to appear environmentally conscious and concerned about future sustainability, natural capital accounting really allows for greater economic control of nature as a way to mitigate economic risk, protect bottom lines, and ensure sustained profits and economic growth. In reality, natural capital accounting will cause devastating impacts to our forests, air and water, perpetuating the destruction and exploitation of nature.
Rather than requiring the corporate and financial actors responsible for environmental degradation to stop their destructive behaviors, natural capital accounting puts them in charge of managing nature — it puts profits over people. We might as well put Wall Street in charge of the financial recovery and its own reform, too.
For more information see our issue brief, No Accounting For Taste: Natural Capital Accounting and the Financialization of Nature…