Topic: EconomicsYou Can't Put a Price on Nature

In recent years, the marketisation of ‘natural capital’ has made serious inroads in the finance sector. Adrienne Buller asks if so-called green financing can every really account for the dynamism and complexity of the natural world, or whether attempting to put a price on pollution will only fast track ecological decline.

Illustrated by Anthony Padilla.

By Adrienne Buller

What’s worth more: an elephant, or a blue whale? How about a forest? A square kilometer of old-growth forest may be home to a thousand distinct forms of life; if you bulldoze it, and plant a square kilometer of saplings somewhere else, is that equivalent? For many of us, these questions are absurd, utterly divorced from the complexity of nature and our environment. But for those who pull levers of power in the global economy – be it politicians, directors of international institutions, or titans of finance – costing the natural world has become a serious, urgent task.

Biodiversity and ecosystems are collapsing at breathtaking rates, and though these existential trends often garner less attention than the climate emergency, a biosphere in freefall is no less dire, threatening all forms of life, including our own. That the urgency of this crisis is now on the agenda of political leaders and institutions is thus, in some respects, reassuring. The problem is to do with who has put it there.

Illustrated by Anthony Padilla.

As understanding of the severe economic implications of biodiversity loss has grown, private finance and industry have quietly taken up the mantle of environmentalism, enthusiastically advocating ‘biodiversity offsetting’ and new financial products to fund conservation. Insurance giant Swiss Re has attempted to quantify what it calls ‘ecosystem services’ – that is, the benefits to the economy the environment provides, like clean water or breathable air. Royal Dutch Shell has made ‘nature-based solutions’ like carbon offsetting a centerpiece in their fervent greenwashing effort, while quantifying ‘natural capital’ has become so popular as to merit its own World Forum, global alliance, and annual summit. With little democratic scrutiny, the construction of nature as an ‘asset class’ is accelerating, disguised as a pragmatic route to overcoming governments’ supposed inability to adequately protect ecosystems and restore environmental health.

The ascent of this market-centric approach to nature is perhaps unsurprising in light of mainstream climate policy, where debate has long been dominated by carbon pricing, modelling ‘climate risks’ to the economy, and carbon markets, such as those embedded in the Kyoto Protocol (predecessor to the Paris Climate Agreement). Indeed, the ‘natural capital’ agenda may just be the latest in what Daniela Gabor calls the ‘Wall Street Climate Consensus’: a coordinated effort from governments and institutions like the World Bank to market new financial opportunities to investors, and 'escort' private capital into previously undesirable spaces. In practice, this is all carrot, no stick: incentives instead of regulation; the securitisation of risky loans into more desirable products; and 'de-risking' – using public funds to guarantee the returns of private investors.

The complexity of natural systems is so immense that calculating the financial risks associated with their loss is impossible

This consensus is rapidly advancing. The EU has proposed three new markets intended to support environmental sustainability, one each for: biodiversity offsets, carbon capture and storage, and water. The quantification of ecosystem services and natural capital featured on multiple panels at this year’s World Economic Forum event, including a discussion of the Amazon’s potential as a ‘bioeconomy’ – meaning the rainforest is worth more to the economy alive than as a burnt ruin for cattle grazing. The same thinking has been applied to elephants ($1.75 million, in contrast with the paltry $40,000 to be had from poached ivory), whales ($2 million each, thanks to lifetime carbon sequestration), and all manner of ecosystems, with the global total pushing US$44 trillion. As the argument goes, ecological destruction is a classic ‘market failure’: because there’s no direct cost to those doing the damaging, there’s little incentive not to bulldoze the forest. Therefore, pricing the contributions of nature to the economy is the best way to assure its protection.


See the Nature Capital Summit ( (, 2019.


Daniela Gabor, The Wall Street Climate Consensus, 2020.


Amanda Russo, World Economic Forum, Half of World’s GDP Moderately or Highly Dependent on Nature, 2020.

But is this really true? The justification for pricing nature is founded on the assumption that fully quantifying ‘nature-based risks’ and the potential financial costs of damage to the environment will allow the market to efficiently price this into its actions. However, the complexity of natural systems is so immense that calculating the financial risks associated with their loss is all but impossible. Dubious estimates of the monetary value of ‘ecosystem services’ and ‘natural capital’ abound, and many mechanisms for investing in conservation are more likely to contribute to biodiversity loss than to reverse it. Take ‘biodiversity offsetting’, which enables firms to ‘offset’ the destruction of biodiversity provided the offset satisfies some ‘like for like’ or ‘like for better’ threshold. Under such a model, it’s possible to offset the destruction of an entire ecosystem by simply paying to help protect or establish a new habitat elsewhere – provided it’s of equal or greater monetary value.

There are alternatives: for much of human history, the commons were governed through shared stewardship

The problems with such an approach are astonishingly clear. For example, for the planned demolition of the 800-year-old Smithy Wood near Sheffield for motorway services, developers proposed an ‘offset’ of 60,000 new trees elsewhere in the region. But Smithy Wood is not simply 60,000 trees – it’s an immensely complex ecology supporting countless forms of life, rich carbon sequestration, and intrinsic value for the community incomparable to a monocrop stand of juvenile trees. Only after years of campaigning was the permit for this obscene exchange revoked.

Critically, these market and finance-led approaches are also a pathway to entrenching injustices. Under a natural capital system, the intended ‘pricing in’ of damage to nature in products and services is a pathway to a green light for the wealthy to continue polluting and pay for the privilege – much like ‘carbon offsets’ for flights. Moreover, ‘nature-based solutions’ and offsetting have repeatedly been associated with land grabs from communities, largely in the global South, hurting subsistence farmers and robbing Indigenous Peoples – sometimes violently - of sovereignty over their land. At best, then, these methods are a wholly inadequate plaster solution; at worst, they directly undermine progress by providing a false sense that action is being taken, all while deepening, excusing, and cultivating new harms.

Efforts to ‘protect’ nature through its commodification are ultimately founded upon continuity with the very economic model underpinning nature’s state of crisis in the first place. They hinge on the belief that despite all evidence to the contrary – markets are the most efficient and effective way to prevent ecological breakdown. The mechanisms for doing so risk handing control over the commons to an unaccountable minority, while all but guaranteeing to widen the same yawning inequalities driving the unjust distribution of resource consumption pushing the natural world to its limits.

There are alternatives: for much of human history, the commons were governed through shared stewardship. Trials of community land ownership have suggested this could be a path to more sustainable agriculture. Indigenous Communities are connected to an astonishing 80% of the planet’s remaining biodiversity despite comprising just 5% of the global population – the legacy of countless generations of stewardship. Rather than the received ‘wisdom’ of the market, this is the wisdom to which we should be listening. In the urgency of saving a biosphere in freefall, we must not lose sight of the fact that climate and environmental justice won’t be found in trades on Wall Street, nor will a tidy pricing model ever reflect the value of a planet whose complexity far exceeds our understanding.


See Woodland Trust, Saved: Smithy Wood, 2020.


See Guy Standing, The Plunder of the Commons, 2019.


Peter Burjorjee, Yoeri Nelis, Benedikt Roth, Land cooperatives as a model for sustainable agriculture, 2017.

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