Ecosystem services and biodiversity banking
Markets in ecosystems and biodiversity are a next step on the route to the total commodification and 'marketisation' of nature. The arguments for this are put forward in a report called The Economics of Ecosystems and Biodiversity (TEEB), written by a team led by Pavan Sukhdev, a former banker at Deutsche Bank.
The report argues that in order to protect the natural world we must consider it in financial terms. This means that forests and rivers become 'natural capital' and natural processes such as pollination by bees become 'ecosystem services' provided by corporation Earth. Of course, in order to pay for these services there must be a reliable way of quantifying their economic value. To do this, the report advocates the use of a technique called 'benefit transfer' to extrapolate the financial value of a given ecosystem from a database of other ecosystems sharing similar characteristics.
If implemented, these ideas would result in 'biodiversity banks' and speculators trading in financial instruments derived from the artificially assigned value of ecosystems. Nascent markets in biodiversity already exist and a number of 'wetland banks', which trade in the financial value of wetlands as ecosystems, have already been established in the USA.
Biodiversity banking could allow financial speculators to buy derivatives linked to 'biodiversity bonds' which would pay out only if the population of a certain endangered species stays above a defined threshold. In other words, speculators would be betting on the likelihood that a given species will become extinct or not.
Green economy blog
Regular updates from our campaigners on issues around the green economy, financialisation and the Rio+20 conference.
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.
Want to know more?
Our briefing, Rio+20 summit: Whose green economy?, explains what is being proposed at Rio, the corporate plan for the future of our planet, and the sustainable alternatives being proposed by social movements and civil society in the global south.
