A Natural Capital Revolution
An Executive Order entitled “Change in Natural Asset Wealth” was signed by US President Joe Biden on Earth Day in April 2022. The recommendations laid out in the 15-year plan will measure economic value of natural resources, recognizing that a robust economy depends on a healthy natural environment.
In my books, and frequently here on World Ocean Forum I have bemoaned the lack of natural asset evaluation and ecosystem service accounting as a radical new way to assess the true cost and true return of any all projects, from permitting to policy initiatives, thereby to understand the full balance of financial consequence for any given action taken in the name of environmental sustainability. To date, all such measurements have been made in the context of gross domestic product and profitability/viability independent of environmental externalities, impacts, and outcomes — a false or inadequate system by which almost all decisions are made and implemented. That I have harped on this for so long is one measure of the indifference perceived and lack of response provided.
Until now. To my astonishment, on Earth Day this year, April 22nd 2022, US President Joe Biden signed an Executive Order, entitled Change in Natural Asset Wealth, to “better account for Nature and its benefits in federal decision-making, leading to the first natural capital accounts….that will measure the economic value that natural resources provide to society and illustrate how a robust economy depends on a healthy natural environment.” The Executive Summary is astonishing. It continues, “Despite how the health of nature drives the health of the economy, implementation of the national economic accounts guides how people see the economy, how governments discuss policy, and how statisticians, measure economic growth. These accounts are imperfect…They were devised at a time when nature’s ability to provide seemed limitless… Some elements of nature are part of the conceptual framework for national economic accounts but go unmeasured in practice…”
There is a 15-year plan (see National Strategy to Develop Statistics for Environmental-Economic Decisions), with proposed recommendations. “These natural capital accounts should be pragmatic and support… 1) macro-economic stability and sustainable development; 2) federal decision-making in programmatic, policy, and regulatory settings; 3) the competitiveness of US businesses; 4) the resilience of State, Territorial, Indigenous, Tribal, and Local communities; and 5) conservation and environmental policy.” And then further, “the US Government should apply existing authorities and make use of the substantial expertise within Federal agencies to develop the system of natural capital accounts and environmental-economic statistics…” should “produce a new forward-looking head measure focused on the change in wealth held in nature…should embed the system in the broader US economical statistical system…” as well as inclusion in the UN System of Environmental Economic Accounting.” (SEEA)
What does all this mean? It would seem that we now have a presidential order to create and apply a new statistical means of economic evaluation and analysis alternative to the accepted measurement of GDP, a radical change in how economists, policy makers, investors, and markets see the world, a new application of value, a new structure for assessment, and a new code for progressive behavior. The Executive Summary concludes, “If Statistics for Environmental-Economic Decisions is implemented, what would the outcome be? American income and the American economy depend on nature…The total value of nature can never be put in monetary terms, but connecting nature and the economy is possible and will help America prosper as it overcomes 21st century economic challenges, including those linked to climate change, biodiversity loss, air and water pollution, and environmental injustice.”
Can this be real? Is this anything more than words and a good intent? I don’t know, but I can assert that if what is seeded in this executive order succeeds, we will have made a subtle, but revolutionary change in how we see the world, how we build the future, how we lead in the community of nations. Out of a single drop comes a deluge of oceanic change.
PETER NEILL is founder and director of the World Ocean Observatory, a web-based place of exchange for information and educational services about the health of the world ocean. He is also host of World Ocean Radio, upon which this blog is inspired. World Ocean Radio celebrates 15 years this year, with more than 645 episodes produced to date.
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