Capitalizing Conservation
Having grown up backpacking and fishing in the Pacific Northwest, I developed a deep reverence for nature, perceiving it as a sacred, almost religious element of my existence. As an adult there is nowhere I feel more grounded than standing in a cold strong river in Idaho as the fish rise around me or deep on a trail in the Wyoming mountains.
Those personal experiences with nature are formative for me, but in a world where capitalism and profit dictate value, I’ve learned to reconcile this personal reverence with a more pragmatic view of nature’s worth. This understanding is especially poignant against the backdrop of the current environmental crisis, characterized by alarming rates of deforestation and species extinction.
The introduction of biodiversity credits as a formal asset class offers a compelling solution in this context. These credits, akin to carbon credits and green bonds, aim to quantify and monetize the conservation of biodiversity. This approach is critical, considering the devastating pace of environmental degradation. According to the World Wildlife Fund, we are losing 18.7 million acres of forests annually, equivalent to 27 soccer fields every minute. This loss not only impacts climate regulation but also leads to the extinction of countless species, with current extinction rates estimated to be 1,000 to 10,000 times the natural rate.
The Biodiversity Credit Alliance’s role in setting rigorous standards for these credits is crucial in ensuring they represent tangible conservation efforts, rather than just financial instruments. The methodologies developed by Gretchen Daily and the Natural Capital Project at Stanford for assigning economic value to nature are indispensable. Their work in valuing “ecosystem services” allows for an accurate assessment of these credits, reflecting the true cost of environmental loss, like deforestation and species extinction.
Securitizing these accurately priced biodiversity credits could democratize investment in conservation, making it accessible globally. This is not just a financial innovation; it’s a critical step towards addressing the urgent need for conservation in the face of rapid environmental destruction. By enabling widespread investment in biodiversity, we harness the power of capitalism to combat the very issues it has often exacerbated.
The formation of biodiversity credits as a formal asset class, informed by the devastating reality of deforestation and species extinction, offers a beacon of hope. This approach allows us to frame nature’s value in terms understandable to the global economic system while addressing some of the most pressing environmental challenges of our time. By integrating rigorous valuation methods and widespread investment opportunities, biodiversity credits can become a vital tool in our efforts to preserve the natural world that I, and many others, hold sacred.
