Part twenty of the multi-part BLUEprint Series: How the Ocean Will Save Civilization

There is a growing movement — a Natural Capital Approach — for identifying and quantifying natural resources and associated ecosystem goods and services, as well as a system of Ecosystem Accounting to track the extent and condition of ecosystems effected by conventional investment and profit or loss. Suddenly, we have the capacity to see beyond the horizon and understand the full integration of traditional capital and natural capital, just as we now understand an integrated economy, across the sea that connects all things.

Standing onshore, we perceive the ocean as locality, the curve of the beach, the limit of the harbor, and as universality, the infinite inclusion beyond a distant horizon. We can look at the calculation of value in a similar way. We can understand capital as a monetized measure of value — in currency or bitcoin or corporate shares — established through an equation of research and production cost, price and profit. It is a calculation of the value of goods and sometimes services, which is the lifeblood of our global economy — raw material things, built things, traded things — in a cycle of speculation and return. But this is a localized calculation, fundamentally circumscribed by what it leaves in, and, most importantly, by what it leaves out, factors that do exist, but beyond the horizon. …

Financial instruments are the tools of capital. They have the strengths and weaknesses of those who are to apply them. They can be used to preserve and sustain natural capital and release its value for the benefit of all mankind.

Over the past decade, public and private interests have experimented with financial tools as a means to advance change in an economy based on conventional practice and resistance. The tools are well known, but slowly applied to alternative ideas, processes, and outcomes. Subsidy is a tactic by which government can steer development — for example, industrial fertilizer use, fish boat construction and fisheries quotas, energy technology — projects at the time requiring extra capital to incentivize change in a particular direction. Subsidies often remain in place far beyond initial intent and become subversive as a continuing expectation of revenue long after the shift desired has been realized. A most egregious example has been the continuing subsidy of the energy industry, underwritten by tax payers to extract a publicly owned natural resource to drive fossil fuel based energy consumption, transportation, and manufacturing infrastructure, to levels that exceed any concept of sustainability and accumulate outcomes and emissions that are suddenly perverse, antithetical to climate, human health and well-being, and threatened with exhaustion. …

Reciprocity makes every one of us a winner, everyone a builder, everyone a giver. It is a simple framework that allows us to understand another way of being, how to support, individually and collectively, a shift from our present way that is making us all losers, all destroyers, and all takers until we have nothing left. Is that really what we want for the land, for the ocean, for ourselves and our future?

By Molly Colin. This article originally appeared in San Francisco Classical Voice. December 8, 2020.

Late one night in 2017 New York Times journalist Ian Urbina found himself seated on the overheated bridge of an Indonesian patrol boat on the South China Sea. Sisyphean waves repeatedly jolted the boat, smashing against its sides, sounding like a car crash. Earlier that day there had been another kind of violent clash involving the boat when tense negotiations with a Vietnamese Coast Guard vessel over disputed fishing rights led the Indonesians to flee, leaving an officer behind with the Vietnamese.

The mood on the bridge was of uncertainty and foreboding as the Vietnamese gave chase — an awkward silence replacing the usual Malay pop-music-infused playful atmosphere. As the boat pitched, an exhausted Urbina wrote up his notes from the day, listening to his playlist of ambient music, including Time from Hans Zimmer’s score for the 2010 film Inception. …

Through a new “Blue Bond” program, the Nature Conservancy estimates that some 85 nations could benefit from this massive re-distribution of protected ocean resources, with added value to follow through fisheries management, ongoing eco-tourism, mitigation of climate factors, fair equity and social justice. If it works for one country, it is a success.

A bond is a fixed income instrument used by corporations, municipalities, states and governments to finance capital expenditures and operations that enroll multiple investors as lenders, rather than shareholders, and to guarantee return through predictable interest payments, and a maturity date for repayment of principal in full. Bonds can be traded, their market price can fluctuate, but they are considered more conservative as invulnerable to volatile interest rates and expectation of full and safe principal return. …

Is it possible to conceive insurance another way? Instead of event restoration, could insurance be designed around risk prevention, where premiums are invested in systems that anticipate certain conditions in advance and finance protections that obviate the predictable damage, reduce disruption, and aggregate to larger strategies that reduce the overall cost of serial events?

If investment is risk, then insurance is a means by which to diminish the damage from unforeseen events, liability, and damage to come. And then there is re-insurance, the insuring of the insurers so that they, too, have coverage to mitigate further the consequence of claims to be paid. …

The Blue Economy, with all that it signifies for our future, cannot succeed if we do not re-direct our investments to best practitioners rewarded for their adherence to social responsibility, environmental sustainability, regulatory control, and social equity.

Banks are at the functional center of the global economy — central banks, banking consortium, investment banks, and local banks — that supply the financial wherewithal to start, operate, expand, and innovate. They are, of course, conservative, risk adverse, and guided by consensus, regulatory concerns, and profit. As such, they have ceded much innovation finance to venture capital, and, by so doing, have perpetuated past behaviors, demonstrated returns, and careful investment that is valued only in the balance sheet, shareholder distribution, and short-term prospect. …

Why does any central bank enable investment that is proven so destructive to the inherent value of Nature, every nation’s most precious asset?

Central banks play a key role in all finance policies and transactions in an integrated world economy. They stand apart from private capitalism and serve as stimulus and control for the implementation of policy and legislation nationally, thus internationally, in shifting forces of finance. In the United States, the Federal Reserve System was created in 1935 to “perform five general functions to promote the effective operation of the national economy, and, more generally, the public interest.”

In concept, the Federal Reserve is independent, although its managers are appointed by the Executive and confirmed by Congress. It has twelve regional Reserve Banks that are quasi-independent with local oversight aware of and sensitive to particular financial conditions and needs. It is not financed by legislative appropriation, but by interest on securities it acquires through open market operations and by depository functions such as check clearing, funds transfers, and automated clearing house operations that cover costs and thereafter transferred as surplus to the U.S. Treasury. The amounts are staggering. In 2015, net earnings paid by the system into the national treasury surpassed $97.8 billion, augmented by another $19.3 billion specifically to fund the “Fixing America’s Surface Transportation Act,” one assumes to repair and build new the deteriorating transportation infrastructure. …