Why we need to put a $ value on nature

Access to a healthy environment was declared a human right by the United Nations Human Rights Council in October 2021. It requires bold action and transformative economic, social, and environmental policies that will protect people and nature. Carole Smith, Technical Director Environment, discusses how the work to value nature in a language that is commonly understood across societies must be accelerated, alongside the need for systemic change to align with economic and financial systems so that we reward and promote sustainable solutions.

New Zealand | Tuesday, 19 October 2021

2021 heralds the start of the United Nation’s Decade of Ecosystem Restoration, which aims to halt the degradation of ecosystems around the world and seeks to reverse the current trend of biodiversity loss.

In Aotearoa New Zealand, our biodiversity makes a significant contribution to global biodiversity statistics, with an estimated 80,000 species only found in New Zealand.

However, the evidence of how we have treated our planet in the industrial era makes for bleak reading.

Humans today extract 60 billion tonnes of renewable and non renewable resources. The per capita consumption of materials has increased 15% over the last 4 years. Since 1970, the global extraction of biomass, fossil fuels, minerals, and metals have increased sixfold. Urban areas have doubled in size. Over 80% of Global Wastewater is discharged untreated into our oceans along with 300-400 tonnes of heavy metals, solvents, toxic sludges and other wastes. Plastic Pollution has increased tenfold. Over half of Argicultural Expansion between 1980 and 2000 is into tropical forests. 75% of the Terrestrial environment, 40% of the Marine Environment, 50% of the aquatic environment manifest severe impacts of degradation

Our ecosystem services - the life-supporting services our ecosystem provides - make a significant contribution to our local economy; 2013 estimates concluded that the total economic value of all land-based ecosystem services was $57 billion per annum. Despite our image in Aotearoa as an ecological haven, the reality is a little different - we have the highest proportion of threatened indigenous species in the world. Reports have shown that globally, we will need 1.6 Earths to maintain our current way of life if we continue to neglect the care of our planet.

Why are we so hesitant to put a $ value on nature?

One way to start caring for nature is to put a $ value on its benefits. Conservationists have traditionally been reluctant to do this as it’s commonly seen as “priceless” with its value being emotional rather than financial. Placing a common price tag on nature, has been seen by many to sully this precious taonga, a boorish symbol that undermines the place that nature has in so many of our hearts.

But this sentiment is changing and rightly so. The conversation around environmental protection and conservation and the value of nature can no longer be conducted around emotions and intangible benefits, rather we must talk the language of financiers, portfolio owners and asset managers - those who play a pivotal role in the investment required to protect this precious asset.

How nature underpins wealth and economic activity

The linkages between nature, economic success and human wellbeing are now being recognised and the work to value nature in a language that is commonly understood across our society must be accelerated. Systemic change that aligns economic and financial systems so that we reward and promote sustainable solutions is paramount.

In Aotearoa, this transitional journey is already underway. In 2019 the first System of Environmental Economic Accounting (SEEA) report was published by the government and will be issued annually. This is an important first step to help us better understand how the environment underpins wealth and economic activity.

The RMA reform process presents a strong opportunity for Aotearoa to look more holistically at development potential, decarbonisation needs and environmental protection.

Te Mana o Te Taiao (National Biodiversity Strategy) sets out a clear framework for action to protect and enhance our biodiversity as well as the importance of this to our society. What is striking, but perhaps not surprising is that the work programme associated with the successful implementation of that strategy is huge.

Is there a risk that in trying to cover so many areas, we may dilute our overall impact or assign priority in the wrong area? Will this strategy and the associated implementation plan show business, in a language that they can understand, the opportunity that protecting and enhancing biodiversity offers to them? Or conversely does it sufficiently highlight the latent liabilities that may arise if they continue to cause environmental degradation or biodiversity loss on their business as usual trajectory?

A key area of opportunity in this respect is the final objective (Objective no.13) - Diversity provides nature-based solutions to climate change and is resilient to its effects.

Our Emissions Trading Scheme only accounts for large scale forestry blocks with specific characteristics that align with international climate change agreements from Kyoto and Paris.

If we change the way that we account for carbon sequestration by including other landuses, we will be subject to a change in our targets because the main purpose of the NZETS is to meet its emission reduction targets. So, should we consider expanding the landuses that are known to provide carbon lock-up (albeit at lower rates than in forestry) in our carbon assessment calculations such as wetlands, smaller areas of bush, council reserves and road corridor planting?

The answer must be ‘yes’. The biodiversity benefits of improving sequestration opportunities on these areas of land are significant. By including larger land areas that our people can connect more directly with compared to plantation forestry will bring many more intangible benefits.

For organisations with large landholdings such as territorial local authorities, the need for purchased offsets to take them to their 2030 carbon neutral targets would potentially be reduced by including this factor. The incentive to increase the sequestration potential of these land areas rather than endure the likely increasing cost of carbon offsets in the future is compelling. This in itself should capture the attention of accountants and environmentalists alike.

Case study

WSP worked with councils around the UK to understand the benefit of including other landuses for example wetlands, grass verges and shrubland in their offset equations. By expanding what could be included as carbon lock-up in a baseline carbon assessment, an additional level of protection and enhancement for these land areas was outlined, leading to the potential to reassign funds that might have been used to purchase carbon credits into biodiversity improvements.