Ecosystem investment: be careful of what we wish for

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Imagine a world where we all have a microchip embedded in our necks. Every time we took 100 breaths, a penny is extracted from our bank accounts and passed on to Goldman Sachs to pay for the air we have breathed.

This may well become technologically possible. But is this the type of life we want? And how might it happen?

These thoughts all came to me during a panel discussion about how best to funnel private investment to support landscape restoration.

It all starts with the seemingly endless wall of private money that is mesmerising many as they try to find ways of attracting investment for landscape preservation and restoration. Many studies, including the Dasgutpa review, have listed the trillions of ‘economic value’ provided by natural systems – ecosystem services – based on which there is now a rush to attract private investment to support natural ecosystems.
The trouble is that investors are not interested in abstract economic value.

They are only interested in that part of the value that can be monetised, with financial returns flowing back to the investors. Any private investment brought into ecosystems will inevitably drive management of those ecosystems according to which aspects can be monetised and which not.

The latter will receive scant attention. A battle looms between ecologists arguing for a management approach that maintains the integrity of whole ecosystems and investors inevitably focused on that which can be provide a financial return.

Not to mention those aspects that will undoubtedly be converted to some form of commercial paper and multiple derivatives that can be traded within the financial system, generating paper profits within the system with little relationship to what is actually happening out there in nature. 

Hence the thought that this could lead to total commodification of natural systems, the monetisation of all ecosystem services, including the air we breathe and the gradual erosion of any concept of ‘the commons’ or that nature is a public good.

At an extreme, and just to make the point: the air we breathe becomes private property for which we all have to pay.

All this to say – beware what you wish for. While the prospect of trillions in private investment money is making environmentalists drool over the potential to funnel some of it to nature preservation and restoration, it should not blind us to the inevitable consequences of turning the commons over to private property, generating extractive rents for even the most basic of our human needs.

What is needed first is an appropriate governance structure for nature. By all means, attract private investment. But only within a clear and well-established governance structure.

We’re still a long way away from that. Falling prey to the siren calls of private investment absent a clear and effective governance structure is potentially a recipe for a disaster that well-meaning people engaged in such initiatives should consider seriously before ploughing ahead.

There is, of course, the other issue that, currently, the rate of ecosystem destruction far exceeds the rate at which such ecosystems can possibly be restored. Focusing on restoration while destruction continues apace risks becoming like pouring water into a sieve.

I would bet anything that most private investors expressing interest in ecosystem restoration have investment portfolios that, at some level, depend on ecosystem damage or destruction to generate their returns.

We are in danger of providing the finance industry with jam on both sides of their toast – money to be made from landscape destruction and further money to be made from possible restoration.

That is no recipe for preserving our natural ecosystems. It may all lead to a bad set of outcomes.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.


  1. Stephen Gwynne says

    Biodiversity offsets are conservation activities that are designed to give biodiversity benefits to compensate for losses – ensuring that when a development damages nature (and this damage cannot be avoided or mitigated) new nature sites will be created. Where appropriate, biodiversity offsetting is an option available to developers to fulfil their obligations under the planning system’s mitigation hierarchy.

    CSBI’s guide on the mitigation hierarchy was developed in consultation with, and with input from, technical specialists in impact assessment, extractive industry experts and financial institutions, with feedback and input from the non-profit sector.


    The Biodiversity Consultancy latest news. Based in Cambridge, UK

  2. Stephen Gwynne says

    The Nature-based Solutions for Climate programme offers one-off grants to partnership-led pilot projects. Projects must achieve habitat creation and restoration at a landscape scale – an area of at least 500 hectares in size.

    About the programme
    Successful applications will receive part of a £5 million pot from public funding.

    The programme aims to:

    learn how carbon accumulates in, and is released from, different habitats across the country

    show how private and public funding can combine to achieve economically viable and long-term environmental objectives

    understand the benefits of considering nature-based solutions at the landscape scale

    provide evidence to inform future grant schemes

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