Notes on ‘Natural Capital’ and ‘fairy-tales’

November 19, 2015

Next week, on the 23-24th November, the World Forum on Natural Capital takes place for a second time in Edinburgh. Given some of its framing assertions - that business as usual is dead, and that so-called environmental externalities need to be reflected in a model of true cost, true price, true value - one might be forgiven for thinking that this is a radical environmentalist, even anti-capitalist, event. But a quick perusal of participants and speakers at the event shows attendees to be from a range of major corporations and financial institutions, as well as governments, large-scale environmental NGOs and universities. A key aim is better identification and management of the business risks of ecological liabilities through declining 'naturaI capital'. Business opportunities include the creation of new markets based on valuing the services provided by nature, as well as competitive advantage from being early adopters in ‘addressing the issue of natural capital’.


Day 2 of the Forum features a policy dialogue called The ethics debate: challenge and be challenged. I was invited to be part of this debate on the basis of a 2014 paper called The natural capital myth. In this I asked questions of who gains from framing nature as natural capital so as to comprehensively incorporate ‘it’ into ‘the economy’. I cannot be part of the Forum debate because I am in Namibia conducting field research (my colleague, environmental ethicist Mike Hannis, will be speaking instead). This blog is written in the spirit of offering some reflections to coincide with the Forum, given that I have not been able to accept the generous invitation to contribute in person.


Dealing from a different deck? – a starting place

There are perhaps three key things I have learned from working on and off for more than twenty years as an anthropologist in a geographical context of 'incomplete' modernisation and industrialisation.


Diversity and technologies of enchantment

The first is that there is significant contemporary cultural variation in the ways that people understand, know and (desire to) enact their relationships with ‘nonhuman natures’. People clearly consume aspects of the natures with which they live. But relationships with entities-beyond-the-human are also mediated, negotiated and managed through a diversity of knowledges, values and practices. Often these express registers of care that are affective and embodied as opposed to calculative.


Elders I work with in west Namibia experience the broader landscape as a zone of uneven potencies, requiring appropriate ritual behaviours that connect people now with ancestral agencies, who act in the present to shape outcomes. They have deployed exuberant ‘technologies of enchantment’ that reinforce connections with places and events, often associated with specific animals, plants or landscape characteristics found there. People remember a long list of |Gaines - celebrated leaders of |gais songs played ‘for the heart’ in dances that lasted through the night. Accompanied by complex polyphonic clapped rhythms and collective vocal arrangements, the songs allowed participants to recursively and affectively (re)experience remembered places and events expressed in the songs. In working with people to map and remember places from which they have been uprooted in the recent past, it has not been unusual for me to hear someone spontaneously break into a song specifically connected with a place we are encountering. These songs and dances affirmed connection with and care for places, events, natures, cultural knowledges and relationships. The unwelcome and often forced displacement of people from these places has reduced their ability to continue such care. It has created loss described as heartbreak, and disaffection through alienation from ‘their’ lands and associated natures, now 'valued' instead through global tourism markets.


Sharing creates abundance

The second thing I have learned is that landscapes currently highly valued for their biodiversity and other so-called ‘natural capital assets’ frequently now occur in places inhabited by remaining non-western ‘indigenous’ cultures. It is not romantic to assert that consumptive and other engagements with natures in such contexts have often been effectively guided by direct relationship and tending practices under common property management regimes, without recourse to measurement or numerical abstraction. I have repeatedly observed and heard about sensitive harvesting practices, framed both in terms of  appropriate distribution (sharing ‘resources’ equitably between people, and between humans and relevant nonhuman entities), and in terms of managing for future abundance. A legacy of such environmental value practices aimed at ‘sustainable futures’ is evidenced by current identification of many such cultural landscapes as ‘biodiversity hotspots’.


Capitalism turns commons into open access resources

The third thing I have learned is that the commons of diverse cultural landscapes globally have been connected over the past few hundred years through their meeting with the particular expansionary economic system associated with merchant capitalism, and the ensuing capital accumulations that permitted industrialisation. Consolidated in a European context under conditions of the grabbing of lands managed under various prior common property arrangements, and coupled with a new way of thinking that radically separated mind from body and culture from nature (and in both cases elevated the former over the latter), this culture often rode roughshod over the peoples and natures it encountered, both ‘at home’ and elsewhere. As this culture expanded into landscapes conceptualised, and thus emptied, as terra nullius, it treated the ‘resources’ found there as available under open access to whoever could grab them first.


Namibia constitutes a good example of such an imperial ‘frontier’ for capital accumulation. Germany has now recognised that its land-grabbing massacre of Herero and Nama in the early 1900s constituted genocide. Current restricted distributions of high-value species such as rhino remains a legacy of excessive hunting with firearms associated with early European incursions into the territory.



Much natural capital thinking, however, seems to assume, or at least to desire, that we all inhabit a world that is rationalised and experienced in the same way. It can appear to have little appreciation of the historical contexts shaping the particular truth regime of capital(ism) within which it is set, or the significant alienations of peoples from natures that established the privileges and enclosures under which captured ‘natural capital assets’ have been depleted. These are among the reasons why suspicion and resistance have greeted the depoliticised ‘pragmatism’[1] of incorporating numbers representing ‘natural capital’ into balance sheets accounting for costs and benefits under capitalist economic structures.


Sadder still are dismissals of environmentalist critique as promoting a simplistic ‘utopian’ and ‘fairy-tale world’ of lowered consumption, wealth redistribution, robust regulation and recognition of diverse forms of value. This is a prominent theme in the book Natural Capital: Valuing the Planet by Dieter Helm, Chair of the UK’s Natural Capital Committee, a text I will refer to by page number through this post. Reading Helm's book I lost track of the number of times he dismissed ‘environmentalists’ as ‘green fundamentalists’. I will return below to some reasons why this is unhelpful. But first, I want to reflect on some of the apparent truisms of natural capital thinking.


The fact[ish] of ‘natural capital’

The World Forum on Natural Capital exists alongside a number of initiatives designated with the term ‘natural capital’. These include the UK’s Natural Capital Committee, charged with advising the government on ‘the sustainable use of England’s natural capital’; the Natural Capital Declaration prepared for the UN Rio+20 ‘Earth Summit’, which commits the financial sector to mainstream ‘natural capital considerations’ into all financial products and services; and the Natural Capital Financing Facility, a financial instrument of the European Investment Bank and the European Commission aiming ‘to prove to the market and to potential investors the attractiveness of biodiversity and climate adaptation operations in order to promote sustainable investments from the private sector’. All these initiatives take ‘natural capital’ as an apparently exterior ‘matter of fact’ sharing definitions along the lines of that sanctioned by the Forum, namely that:

Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things’,
from which ‘humans derive a wide range of services, often called ecosystem services, which make human life possible'.


But in many ways ‘natural capital’ does not exist. It is a construct brought into being by particular practices of conceiving, measuring and valuing the so-called natural world. Through these practices natural capital is becoming an increasingly fetishised ‘object’ in the world, charged technically (through calculative practices) and socially (through institutionalised expert agreement) with authoritative, objective power. Anthropologist Bruno Latour calls such constructs ‘factishes’, emphasising both the human investments through which such modern fetishes act, and the excessive or even irrational commitment they inspire. 


The fact(ish) of natural capital is enacted in the world through repetitive utterances, treated as truisms, that from different perspectives may also be understood as fallacies. Consider the following propositions.


* You cannot manage what you don’t measure.
This statement was asserted so often by
the leader of the recent programme on The Economics of Ecosystems and Biodiversity (TEEB) that it became close to the defining slogan for that programme. In Helm’s book it is also repeated repeatedly. The chapter on ‘Accounting for natural capital’ opens with the statement that ‘What is measured tends to be what matters’ (p. 79).


Measurement of what exists is seen as key to rational and efficient management. Counting, calculating and pricing things is seen as pragmatic and beyond ideology. However such practices can also be viewed as contributing the building blocks for a highly ideological construction of the world which serves particular interests and frames out others. In delineating ‘the spirit of capitalism’, Max Weber wrote in 1930 that ‘[w]here capitalistic acquisition is rationally pursued, the corresponding action is adjusted to calculation in terms of capital’ (p. xxxii). Importantly, it is this ‘calculating rationality’ that Weber saw as embodying ‘the specific and peculiar rationalism of [protestant] Western culture’ (pp. xxxvii-xxxviii, emphasis added).


To illustrate this ‘peculiarity’, let’s return to the Namibian context in which I conduct field research. In the early 1850s, Francis Galton – later recognised as the father of eugenics - travelled to south west Africa. Whilst there he was driven to distraction by what he perceived as the inability of the ‘natives’ he encountered to count things. In his controversial later work on eugenics and the inheritance of traits, he used his opinions of African numeracy to justify placing Africans at the bottom of the human hereditary tree.[2] Nonetheless, and as observed for pastoralist peoples the world over, these same apparently innumerate people knew in concrete terms the identities and personalities of every single animal in their herds of livestock, which could amount to several hundred head and more. Knowledge appropriate for tending these herds and sustaining them into the future relies less on numeracy and calculation, and more on direct observation, familiarity, and acknowledgement of the particularity of each ‘head’ making up the herd, in connection with detailed understanding of broader environmental contexts.


Indeed ‘management’ benefits from information from all the senses. Gardeners might sense through observation and touch when a plant needs water, shade, planting out, or pruning - tending practices that philosopher Isis Brook affirms as amplifying environmentally virtuous behaviour. Abstraction through counting and numbering practices may well reduce the awareness and ability needed to practice such embodied attunements. Gardening and tending might be more appropriate skills to emphasise than measurement, in the context of supporting better care for diversely embodied other-than-human natures.


* Natural capital needs to be conserved in aggregate. Substitutability between different natural capital assets is desirable and can be offset through compensation.
The fulcrum on which Dieter Helm’s book on
Natural Capital pivots is what he calls the aggregate natural capital rule. This rule states that it is maintenance of measured natural capital in the aggregate that counts. Natural capital assets simply need to be maintained above measurable thresholds, with substitution between different natural capital assets permitted as long as the aggregate rule is maintained.


Strangely, Helm’s advocacy of this ‘natural capital aggregate rule’ follows immediately from his vehement discrediting of an aggregate rule as deployed by Keynesian economists. He asserts that a treatment of ‘consumption and investment’ as ‘just different types of aggregate demand’ in macroeconomic terms - such that ‘[i]t is the aggregate, not the composition of the aggregate that matters’ – is ‘highly suspect’ (p. 86). Yet it is precisely an aggregate rule that discounts composition of the aggregate that he proposes for natural capital, notwithstanding important proposed different treatments for ‘non-renewable’ and ‘renewable’ natures/capitals.


What this means is that destruction can occur for one ‘element’ of ‘natural capital’ as long as it is substituted or compensated for. In carbon accounting this approach supports the mitigation of industrial emissions through purchase of offset credits signalling sequestration somewhere else. In the management of habitat and biodiversity destruction through development, biodiversity offsettinga controversial compensatory measure – is advocated for the mitigation of loss. The aggregate rule is thus a frame that permits different natures in different places and times to be exchanged for each other, as long as some aggregate measure apparently remains intact.  


But consider what has happened for the management of carbon under a similar aggregate rule, also enacted so as to sustain the ‘natural capital’ of a climate conducive to life as we know it. In managing carbon budgets aggregate levels have been set within which trades can occur between carbon emitters and those acting to reduce emissions so that these levels are not breached. Such market mechanisms are celebrated as ways of attending both to the maintenance of an appropriate aggregate carbon budget, and to the maintenance of economic growth by creating a tradable unit for exchangeable carbon and offset credits. A great deal of research and documentation, however, now indicates that carbon markets have failed to do what they say they do, i.e. to reduce carbon emissions in one place through the purchase and trading of credits tied to carbon reductions and/or storage somewhere else.


The New Economics Foundation, for example, refer to a recent in-depth review of carbon credits awarded and traded under the Kyoto Protocol’s Joint Implementation (JI) mechanisms. This review indicates that high carbon credit prices in fact generate ‘perverse incentives to increase production or generation of waste gases as a means to increase credit revenues from waste gas abatement’. The NEF thus suggests that a market in carbon credits has  substantially undermined the potential environmental integrity of such mechanisms. Reviewing this research, NEF claim that ‘about three-quarters of credits [under JI] may not represent actual emission reductions, and their use to meet mitigation targets [i.e. aggregate levels] may have increased emissions by about 600 million tonnes’.


Given the emphasis on competitive rent-seeking in neoliberal markets it is unsurprising that such perversities should arise. Markets in themselves cannot generate ethical choices and behaviour, and outcomes not predicted in the design of their incentive structures are arguably inevitable. Other research suggests that in many cases emissions reductions would have happened without the associated international carbon credit purchases. What this means is that such trades do not meet their stated purpose of generating carbon emissions reductions that are additional to those that would have occurred anyway, i.e. in the absence of such trades.


The ‘aggregate natural capital rule’ takes such structures into extremely shaky ground. ‘Nature’ is unpredictably emergent, relational, variable, path-dependent and unique. Each part plays a role in generating the whole. Making a ‘bit’ in one place, cannot replace a loss in a different context. What we are left with instead is not a gain but a loss in one place, plus investment in something different somewhere else. From an ecological perspective it seems very strange to advocate this rule. We are already faced with path-dependent time-lags in ecological decline due to historical transformation of habitats globally; reductions in existing habitat are likely to induce reductions in species complement that are nonlinear, meaning that the full consequences of losses may not be factored into any offsetting calculations; and contexts of broader climate change may make predictable restorations and creations of future habitat increasingly difficult to enact with any certainty.


As economist Herman Daly writes, natural stocks have a physical basis that is not fungible. He asserts further that ‘[e]xchanges of matter and energy among parts of the ecosystem have an objective ecological basis. They are not governed by prices based on subjective human preferences in the market’ – a point which leads well into consideration of the next proposition.


* The trouble is that most (but not all) renewable natural capital has no market and hence no price (p. 110) – a price has to be put on nature (p. 116).
In much natural capital thinking markets are considered to generate efficiency and stability in the allocation of scarce resources (p. 187). This argument is used to support monetary valuation of previously unpriced ‘natural capital assets’ and ‘ecoservices’ so as to increase visibility of their costs and benefits in relation to the allocation efficiencies of markets.


But this seems to be a somewhat vanilla view of markets. Other perspectives emphasise the volatile volatility of prices, wild fluctuations in both stock and commodity prices, and unpredictable discontinuous changes in values that render agreements regarding costs as extremely imprecise. What exactly then are natural capital assets and ecoservices, and the natures they represent, being exposed to when they are further revealed to the ‘price mechanism’?  


Helm illustrates the implications of a lack of prices signaling the cost of use of an asset through recourse to Garrett Hardin’s famous and highly-cited 1968 paper ‘the tragedy of the commons’. In this, Hardin argued that given a pasture open to all, self-interest will drive cattle accumulation strategies that benefit individuals at the expense of the grazing they rely on. But Hardin’s ‘commons’ in fact was an open access resource. As noted above, commons in diverse contexts globally have been managed with varying degrees of success as common property, through an array of institutions and procedural practices designed to utilise, distribute and sustain 'resources'. Individualistic and selfish grabbing and conversion of resources so as to support accumulation of financial profit have repeatedly treated commons and their peoples as if they are open access, and it was this sort of situation that Hardin was describing. He was not modeling a commons.


As such, it is not necessarily exposure to prices that will improve the treatment of an apparently open access resource by encouraging the internalising of the shared costs of over-exploitation. Recognition of and support for institutions and procedures that foster distributive and procedural mechanisms for holding and sharing resources in common, might instead be more likely to create abundance; as well as to assist with agreeing use practices that adjust harvesting activity towards the health of populations that are thus utilised. This, I believe, is one of the reasons for why there has been such outcry in the UK over the privatisation of forests and woodlands (p. 195). This was not so much because people were concerned that the private sector might do a worse job than the public sector of caring for forested land. It is much more to do with protecting the principle of ownership for the public - or common - good.


Fundamentalisms? And futures . . .
As noted above, Helm peppers his book on Natural Capital with dismissals of environmentalists as ‘green fundamentalists’. But he neglects to reference sources making it hard to see who it is he is dismissing or what their arguments are. By working so hard to dismiss the fundamentalist-utopian-fairytale thinking of environmentalists, recognition of the capital-centric and market fundamentalism – even utopianism - of his own thinking is avoided.


This is unfortunate. There is much in Helm’s text as well as other natural capital work that is in agreement with so-called ‘green’ perspectives. This includes acknowledgement of the urgent need for change; assertions that there is ‘a limit to the credibility of the assumption that the next generation can or will pay’ (p. 86); emphasis on the way that GDP numbers 'fool ourselves about our real wealth' and 'may be actually making things worse by positively encouraging behaviours that are detrimental to the next generation’ (p. 96); and concern regarding perverse subsidies. ‘Greens’ would probably balk at assertions that ‘natural capital’ exists simply to sustain levels of consumption into the future (p. 88), and would perhaps emphasise both the maintenance of so-called ‘natural capital assets’ and the necessity of curtailing exploitation through consumption. But they would agree with Helm’s assertions that we are living beyond our means (p. 222), and that there is sense in precautionary strategies of thrift and risk aversion (pp. 223, 225). Given a stated concern to protect and restore environmental health it is sad that 'greens' are not seen as allies in this mission.


Of course, a barrier to collaboration remains a certain squeamishness to approaches that fetishise numerical representations and economic terms and metaphors in describing 'nature'. This resistance rests on relevant ecological concerns. At the same time, it also derives from an intuition that the move to enrol nature(s) so completely into the sphere of capital effects a problematic reduction of ways of thinking about, relating with and valuing all those entities, places and ecologies we (can) know as 'nature'.


In George Orwell’s dystopian view of the future in 1984, a pillar of the power of 'the Party' is the destruction of extraneous words so as to shape language into 'Newspeak'. In this reduction of words, ‘the great wastage is in the verbs and adjectives’ although ‘there are hundreds of nouns that can be got rid of as well’ (p. 59). The intention is to reduce the capacity and possibility for independent thought. And the strategy is accompanied by erasure of the diversities of the past, so as to remove sources of awareness and inspiration that might encourage contestation of the present.


Folding all of the living, breathing natural world into the discursive and calculative value-frame of substitutable capitals seems to encourage a similar reduction of ways of talking about, thinking about and relating with diversity. Philosopher Paul Feyerabend called this a ‘Conquest of Abundance: A Tale of Abstraction Versus the Richness of Being’ - arguing that the process leaves us far less erudite in relation to nature. The reduction of biological, cultural and linguistic diversity that we observe all around us thus is complemented by a reduction in our ways of thinking and speaking about this.


Additional caution is perhaps called for to prevent 'us' from walking into and thus making an Orwellian labyrinth of environmental 'doublethink'. We are already embracing principles whose slogans - derived from the propositions above - might be:


Destruction means Protection

Less is More

Homogeneity means Diversity

Numbers are Reality


Is this the future 'we' want? And is it the only one that is possible?




[1] On pragmatism see Helm, D. 2014 Taking natural capital seriously. Oxford Review of Economic Policy 30(1): 109-125, p. 109.

[2] Gillham, N. 2001 A Life of Sir Francis Galton: From African Exploration to the Birth of Eugenics. Oxford: Oxford University Press. p. 81.




Thank you to Mike Hannis for comments on an earlier draft and to Bruce Wilson of the Scottish Wildlife Trust for the invitation to speak at the 2015 World Forum on Natural Capital.

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© 2015-2019 by Future Pasts. Background image: grassland, Erongo Region, west Namibia, April 2008.