WDM heckle raises hackles at the World Bank
Last week, WDM climate campaigner Sarah Reader donned a Nick Clegg mask and interrupted the deputy prime minister’s speech to the ‘natural capital summit’ on the sidelines of Rio+20.
Clegg was there to support to the ‘natural capital declaration’, a document drawn up by 37 big financial sector companies to call for the financial valuation of nature and the internalisation of environmental ‘externalities’ (i.e. bringing them into the market).
It seems that Sarah has raised some hackles at the World Bank. On Thursday, the World Bank’s vice president for sustainable development, Rachel Kyte, posted a blog criticising WDM for ‘missing the point’ about valuing nature:
The event had its share of unexpected excitement when a protester, wearing a Clegg mask, interrupted the UK deputy prime minister. She was from World Development Movement. Reading their blog later, I think they are missing the point. We are not talking about "pricing" nature but "valuing" it. By valuing it, you are enabling better economic decisions. For example, if you're a water-scarce country and you don't know how much water you're using, you're in a dangerous place. By saying we do not want natural capital accounting, we would be saying we are better off being ignorant.
On the face of it, Kyte’s argument sounds convincing – but to take a closer look at the natural capital declaration is to see that her distinction between price and value is not made by the financial sector interests behind this agenda. And while it is true that the World Bank’s WAVES programme seeks to initially bring natural capital into public accounts rather than into those of private sector companies, the natural capital declaration makes clear that this is just a step towards a broader, and even more dangerous, agenda.
For a start, the declaration calls on governments to give incentives to companies “to value and report on their use of Natural Capital and thereby working towards internalizing environmental costs”
‘Internalising’ environmental costs is another way of saying that these will be put into a cost-benefit analysis. So, if a company sees that the profit to be made from destroying an ecosystem exceeds its artificially defined monetary ‘value’, then it will go ahead and do so. This is not valuing nature, it is pricing it.
You value something if you seek to conserve something in its own right. For example, indigenous peoples engaged in the sustainable use of forest resources value nature – they understand the utility of forests in their own right as a benefit to humankind and not just as a means to make profit or a line on the balance sheet. Far from being ‘ignorant’ about the value of nature as Kyte put it, it is those who do not attach a price to natural resources who value them the most. On the other hand, financial investors only value nature if this is translated into dollars, pounds or euro.
So Kyte’s distinction between price and value is just semantics. For the financial sector, they mean the same thing. Investors do not value nature at all – they value money.
And what about the declaration’s call for the creation of new ‘risk management tools’ to help investors take ‘natural capital’ into account? ‘Risk management’ sounds harmless, but it might mean the creation of nature ‘derivatives’ that would allow the financial sector to turn the natural world into a giant casino. This would mean speculators betting on the likelihood that a specific species will become extinct or whether the price of water (Coca Cola are working on this) is likely to rise.
It is clear that the signatories of the declaration want to find ways to hedge and insure against losses incurred by damage to natural capital in a manner similar to what we’ve seen with the use of ‘weather derivatives’ to insure against bad weather. Again, this is all about reducing nature to something that can be bought and sold.
Sorry Ms Kyte, but we’re not fooled, and nor are the numerous civil society organisations and social movements from the global south which mobilised against the corporate ‘green economy’ agenda at Rio+20. This is not about value, it’s about price.
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The great nature sale
Discussions about the green economy are being captured by rich country governments and corporate interests. Their proposals include allowing speculators to bet on the price of water, selling off land that indigenous people and small-scale farmers have used for generations and creating new financial instruments linked to the survival of endangered species.
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