The Bankers at the Helm of the ‘Natural Capital’ Sector

January 26, 2017

by Michael Swifte

Let’s put a spotlight on four bankers who positioned themselves in the ‘natural capital’ sector around the time of the Global Financial Crisis (GFC). Let’s have a look at some of their networks.

The reason these bankers have positions at the intersection of big finance and the conservation sector is because of their intimate knowledge of financial instruments and what some call “financial innovation”. They follow the edict ‘measure it and you can manage it’. They are the perfect addition to decades of work – as part of the sustainable development agenda – aimed at quantifying the economic value of nature in order to exploit it as collateral to underwrite the new economy.

Banker 1

John Fullerton is a former managing director at JPMorgan, he founded the Capital Institute in 2010, in 2014 he became a member of the Club of Rome, he has written a book called Regenerative Capitalism.

“No doubt the shift in finance will require both carrots and sticks, and perhaps some clubs.” [Source]

The first of Fullerton’s key networked individuals is Gus Speth who consults to the Capital Institute, he sits on the US Advisory Board of 350.org and the New Economy Coalition board and is good buddies with the godfather of ‘ecosystem services’ Bob Costanza. He has a long history supporting sustainable development projects and has some seriously heavy hitting networks. He founded two conservation organisations with which he was actively engaged up until 2o12, both organisations continue to support ‘natural capital’ projects among other diabolical efforts.

The second networked individual is Hunter Lovins, an award winning author and environmentalist who heads up Natural Capital Solutions and is an advisor to the Capital Institute. She is a long term cheer leader for green capitalism, climate capitalism, and sustainable development.

Banker 2

Mark Tercek was a managing director at Goldman Sachs and became the CEO of The Nature Conservancy in 2008, he has written a book called Nature’s Fortune: How Business and Society Thrive by Investing in Nature.

“This reminds me of my Wall Street days. I mean, all the new markets—the high yield markets, different convertible markets, this is how they all start.” [Source]

One of Tercek’s networked individuals is conservation biologist Gretchen Daily, the person Hank Paulson sent him to meet when he accepted the leadership of The Nature Conservancy (TNC). Daily co-founded the Natural Capital Project in 2005 with the help of  WWF, TNC and the University of Minnesota.

Another prominent figure in TNC is Peter Kareiva, senior science advisor to Mark Tercek and co-founder of the Natural Capital Project, he is also the former chief scientist of TNC and its former vice president.

Taylor Ricketts is also a co-founder of the Natural Capital Project, at the time of founding he was the director of conservation science at WWF. He’s now the director of the Gund Institute for Ecological Economics which was founded by Bob Costanza.

Banker 3

Hank Paulson is the former CEO of Goldman Sachs, he was US treasury secretary during the GFC, he’s a former chair of the TNC board and the driving force behind the 2008 bail out bill. In 2011 he launched the Paulson Institute which is focussed on China, he has written a memoir called On the Brink: Inside the Race to Stop the Collapse of the Global Financial System.

Even before he was made treasury secretary by George W Bush, Paulson had an interest in conservation finance and greening big business. He was a founding partner of Al Gore and David Blood’s, Generation Investment Management which operates the “sustainable capitalism” focussed Generation Foundation. He has worked with Gus Speth’s World Resources Institute and the Natural Resources Defense Council to develop environmental policy for Goldman Sachs. In 2004 he facilitated the donation from Goldman Sachs of 680,000 acres of wilderness in southern Chile to the Wildlife Conservation Society and in 2002-04 he and his wife Wendy donated $608,000 to the League of Conservation Voters. He has also worked with the second largest conservation organisation on the planet Conservation International.

“The environment and the economy have been totally misconstrued as incompatible,”[Source]

 

“[…] It is is clear that a system of market-based conservation finance is vital to the future of environmental conservation.” [Source]

Banker 4

Pavan Sukhdev is a former managing director and head of Deutsche Bank’s Global Markets business in India, he was the study leader of the G8+5  project, he founded the Green Accounting for Indian States Project, he co-founded and chairs an NGO in India called the Conservation Action Trust, he headed up the United Nations Environment Program – Green Economy Initiative which was launched in 2008, he has written a book called  Corporation 2020: Transforming Business For Tomorrow’s World 

Sukdev’s work cuts across more than a dozen UN agencies and scores of international agencies and initiatives. Here are just some of them: IUCN, ILO, WHO, UNESCO, IPBES, WEF, IMF, OECD. Every kind of commodity and economic activity has been covered through his work.

“We use nature because she’s valuable, but we lose nature because she’s free.” [Source]

There are only a one or two degrees of separation between these bankers and the environmental movements with which we are very familiar. Looking at key networked individuals connected to the representatives of the financial elites – bankers – helps to highlight the silences and privately held pragmatic positions of many an environmental pundit. “Leaders” of our popular environmental social movements don’t want to be seen or heard supporting the privatisation of the commons, but they remain silent in the face of a growing surge towards collateralization of the earth. Perhaps they too believe that using nature to capitalise the consumer economy is preferable to the toxic derivatives that precipitated the GFC. Either way the underlying motivation – for anyone who might feel that ecosystem services thinking is useful for the earth – is the desire for the continuation of our consumer economy.

LISTEN: The Lies They Tell. The Pitiful State of Environmentalism and its Neoliberalization

Wrong Kind of Green

October 29, 2016

The “New Economy” is Not Inclusive

[Filmed by Nemnövekedés – Degrowth – Published September 9, 2016]

The Political Economy of the Paris Agreement: Preserving the Existing Social & Economic Order

Real-world Economics Review, Issue no. 75

The Political Economy of the Paris Agreement on Human Induced Climate Change: a Brief Guide

By Clive L. Spash [Vienna University of Economics and Business, Austria]

Excerpt:

Technological optimism is at the core of the IPCC projections and the assumptions that inform the Paris Agreement. On publication of the IPCC 5th Assessment report the official press release quoted the Chair, R.K. Pachauri, as stating that:

“To keep a good chance of staying below 2ºC, and at manageable costs, our emissions should drop by 40 to 70 percent globally between 2010 and 2050, falling to zero or below by 2100.”

The latter is the new rhetoric of negative emissions that relies on imagined future technologies (e.g. biotechnology, geoengineering, carbon capture and storage). The press release also reports the findings of Working group III as showing that:

“…mitigation cost estimates vary, but that global economic growth would not be strongly affected. In business-as-usual scenarios, consumption – a proxy for economic growth – grows by 1.6 to 3 percent per year over the 21^st century. Ambitious mitigation would reduce this by about 0.06 percentage points.”

This major transformation of the energy basis of the economy in fossil fuels is floated in the press as having no real impact on economic growth without anyone raising a qualm. In fact Lord Stern and colleagues have been arguing that economic growth will be boosted by the energy transformation to a “new climate economy” (GCEC, 2014). Elsewhere, I have discussed some of the many fallacies of this Green Growth argument and noted the connection to a power elite (Spash, 2014). Yet this is now the dominant international position and hope of the Paris Agreement.

The whole of Article 2 is qualified by the phrase: “…in the context of sustainable development and efforts to eradicate poverty”. As I have noted elsewhere (Spash, 2016), the Paris Agreement cannot be read outside the context of the, October 2015, UN Resolution A/RES/70/1 “Transforming our world: The 2030 Agenda for Sustainable Development”, which promotes economic growth, technology, industrialisation and energy use. Goal 8 is to sustain per capita economic growth at a rate of “at least 7 per cent gross domestic product per annum in the least developed countries”. The environmental devastation this would entail is meant to be addressed by the “endeavour to decouple economic growth from environmental degradation”, which is meaningless unless undertaken in absolute terms and that is simply impossible for the industrial economy being promoted in Goal 9. The Paris Agreement follows suit and claims that: “Accelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development” (Article 10).

The ultimate concern is the threat to economic growth and this is a perspective that has been heavily lobbied for by advocates, such as Stern, of the new climate economy under the banner “better growth, better climate”. As they state: “In the long term, if climate change is not tackled, growth itself will be at risk” (GCEC, 2014a, p.9). The climate can and will be changed, but growth must not be threatened.

The negotiations around human induced climate change reveal the tensions and contradictions of the resulting policy. There are those who argue for more and better growth spurred on by new technologies to be developed via innovative corporations (GCEC, 2014). This is to be funded, as usual, by massive public investment that will ‘leverage’ private finance, or in plain terms subsidise corporate profit-making while pretending to remove market imperfections. Advocates are heavily invested in preserving the existing social and economic order as evident by the elite networks of the 1% within which they operate (Spash, 2014). The hope is for new miracle technologies to allow moving pollutants from the air to the soil and water, and reliance on treating the Earth as a mechanical toy for boys to (geo)engineer. The economics profession with its macroeconomic obsessions over jobs and growth is living in a fantasy world without any biophysical reality and merely plays along with this techno-optimist tune, and unfortunately the heterodoxy has so far done little to alter this.

The targets of Paris are not some simple internalisation of an externality that is messing-up the perfectly functioning market system. If taken seriously they are a call for a major transformation of the global economy away from its foundation on fossil fuels and energy intensive systems. As the UNFCCC’s Director for Strategy has stated:

“The objective is to put in motion a fundamental transformation in the way we use and produce energy, how we plan our cities, how we manage land and how we prepare for a changing climate and cooperate to minimise its disruptive effect. Transformation takes strategy. You need to know your destination if you are serious about reaching it” (Thorgeirsson, 2015).

Yet, while the need for transformation is now widely recognised, this is generally interpreted as being totally consistent with maintaining the same social ecological and economic structure as today. That is a structure of social inequity, ecological exploitation and an economy promoting hedonistic materialism supplied through a system of corporate and State capital accumulation. The politics of human induced climate change go to the heart of the modern industrialised capital accumulating economy and the rhetoric of growth as supplying development and progress. In the end the Paris Agreement changes nothing. The destination is the same old growth economy and that is in total contradiction with addressing human induced climate change.

Download the paper:

Clive L. Spash, “The political economy of the Paris Agreement on human induced climate change: a brief guide”,
real-world economics review, issue no. 75, xx June 2016, pp. xx-xx,
http://www.paecon.net/PAEReview/issue75/Spash75.pdf

[Professor Clive L. Spash holds the Chair of Public Policy & Governance at WU in Vienna and is Editor-in-Chief of Environmental Values. He has conducted research on climate change economics and policy for over 25 years and his work in the area includes the book Greenhouse economics: Value and ethics as well as numerous articles. His critique of carbon trading was the subject of attempted censorship while he was a senior civil servant at the CSIRO in Australia. More information can be found at www.clivespash.org.]

Wildlife Conservationists need to Break out of their Stockholm Syndrome

Global Policy

August 30, 2016

by Margi Prideaux

Instead of fighting a destructive economic system, international conservation NGOs are bonding with its brutality.

“A male polar bear starved to death as a consequence of climate change. This polar bear was last tracked by the Norwegian Polar Institute in April 2013 in southern Svalbard. Polar bears need sea ice to hunt seals, their main prey. The winter of 2012-2013 was one of the worst on record for sea ice extent. The western fjords on Svalbard that normally freeze in winter remained ice-free all season.” Ashley Cooper/Corbis [Source: Polar Bears on Thin Ice]

Conservationists like me want a world where wildlife has space, where wild places exist, and where we can connect with the wild things. Yet time after time, like captives suffering from Stockholm syndrome, wildlife conservation NGOs placate, please and emulate the very forces that are destroying the things they want to protect.

Despite our collective, decades-long, worldwide commitment to protect wildlife, few indicators are positive. The Red List that’s issued by the International Union for the Conservation of Nature now includes 22,784 species that are threatened with extinction. Habitat loss is the main problem for 85 per cent of species on the list.

The number of African rhinos killed by poachers, for example, has increased for the sixth year in a row. Pangolins are now the most heavily poached and trafficked mammals on the planet. One third of the world’s freshwater fish are at risk from new hydropower dams. Two hundred amphibians have already gone and polar bears are probably doomed. Human beings are simply taking too much from the world for its rich diversity to survive.

A close up of Katiti the Pangolin  ©Christian Boix

None of this is news to people in the conservation movement. The reality of devastation has been apparent for many years, which should prompt some soul-searching about why we are failing.

The main reason is that we are allowing the market to dictate conservation while ignoring the very people we should empower.

Communities everywhere know their non-human kin—the animals that live among them. We know the seasons we share, and what grows when and where. We know the ebb and flow of life in our shared places. For some, those vistas are forests. Others look out to the sea, and some on endless frozen horizons. These are not empty places. They are filled with wildlife with which human beings commune.

But if wildlife are local, the impacts of human activity on them are unquestionably global, and they require global management. Industrialized fishing, mining, forestry and mono-agriculture raze whole areas and replace diversity with a single focus. The illegal international trade in exotic species provides a path for the unethical to hunt, kill, package and commodify animals and plants. The market’s quest for resources and power floods, burns and devastates whole landscapes.

For the last two decades, the conservation movement of the global North has believed that little can be done to counterbalance the might of this vast economic system, so the reaction has been to bond with it and accept its brutality—to please it and copy its characteristics. In the process, organizations in this movement have developed the classic symptoms of psychological capture and dependence through which victims develop a bond with, and sympathy for, their captors.

I’m being deliberately provocative here by evoking Stockholm syndrome because it clarifies the crucial point I want to make: I believe that the conservation movement’s unhealthy relationship with the global economic system exacerbates harm to both people and wildlife.

NGOs in Europe and North America raise money from philanthropists, corporations and other donors to arrange or establish protected areas that extend over large, pristine and fragile lands in Latin America, Asia and Africa. The public in the global North flock to their ambition, hoping it will lock precious places away from harm and raising even more money in the process. But this support turns a blind eye to the inconvenient fact that these areas exclude local communities—people who have lived for millennia beside flamingos and tigers, orangutans and turtles and who are just as wronged by big business and globalization as are wildlife.

These agencies also court the market by selling ‘adoption products’ and ‘travel experiences’ to these protected areas. They smooth out the ripples from their messages so that their supporters’ sensibilities are not offended. They deflect attention away from harmful corporations. They expand their marketing departments and shut down their conservation teams. They adopt the posture and attributes of the very things—capitalism, consumerism and the market—that destroy what they seek to protect.

Hence, their capture-bond is informing how they see the world. In their efforts to please and emulate the market they fail to look for the broader, systemic causes of elephant poaching or killing sharks for their fins. They trade stands of forests for agreements with corporations and international agencies not to campaign against dams that will flood whole valleys. They defend sport hunting by wealthy western tourists as legitimate ‘conservation’.

For example, the Gonds and the Baigas—tribal peoples in India—have been evicted from their ancestral homelands to make way for tiger conservation. Tourist vehicles now drive through their lands searching for tigers, and new hotels have been built in the same zones from which they were evicted.

Or take Indonesia, where massive illegal deforestation has burned and destroyed huge areas of precious rainforest. Even though a court order and a national commission have compelled the government to hand ownership of the forests back to the people who live there, the corporate sector is resisting. At times they hide behind their NGO partners through the Roundtable on Sustainable Palm Oil, a global, multi-stakeholder initiative that includes many conservation NGOs as members.

International NGOs have scuppered efforts to control polar bear trophy hunting in the Arctic while they benefit from lucrative corporate partnerships for other areas of polar bear conservation. A major project run by Conservation International in the Ankeniheny-Zahamena Corridor of Madagascar has restricted villagers’ use of their traditional forests for food harvesting in order to reduce greenhouse gas emissions, yet Chevron, ExxonMobil, Shell and NRG Energy are all members of the organisation’s Business & Sustainability Council.

Even worse is the Worldwide Fund for Nature (WWF), which stands accused of breaches of OECD Guidelines on the Conduct of Multinational Enterprises and of the UN Declaration on Human Rights. The complaint in question alleges that WWF has financed and supported ecoguards that have brutally displaced the Baka tribespeople who have traditionally lived in the area now declared as a national park in Cameroon, while turning a blind eye to the destruction of the Baka’s way of life through logging, mining and the trafficking of wildlife.

Stephen Corry, the director of Survival International (which in this case is blowing the whistle on another NGO), has this to say:

“WWF knows that the men its supporters fund for conservation work repeatedly abuse, and even torture, the Baka, whose land has been stolen for conservation zones. It hasn’t stopped them, and it treats criticism as something to be countered with yet more public relations.”

Writing on openDemocracy, Gordon Bennett argues that NGOs might avoid toxic situations like this if they undertook proper investigations before committing to new parks and protected areas. I agree, but I also believe that WWF should have supported the Baka people to propose their own solutions to conserving their forests instead of assuming that a park and ecoguards were the answer.

These depressing examples are being replicated around the world. The situation will only get worse as human populations increase. Local communities and wildlife are bound to lose out.

The world is changing, however, and local civil society is on the rise. International conservation NGOs therefore need to think long and hard about their relevance as local groups grow stronger. As more communities gain access to international politics, they will be trampled on less easily by agendas from afar. The challenge is to ensure that they become empowered to look after their own land and the wildlife around them.

If the conservation movement is brave enough to transform the ways in which it works, it can support this process of empowerment and the radical changes that come with it. It can connect with local civil society groups as a partner and not as a decision maker. It can devolve its grip on how conservation is conceived and respond to community ideas and wisdom about protecting the wildlife with which they live.

In this task the conservation movement has a lot to offer. International NGOs are skilled and experienced, and they have access to international processes of negotiation and decision making. If they free themselves from corporate pressures and transform themselves into supporters of local civil society, together everyone is stronger. NGOs can help to project the unpasteurised voices of local communities into the halls of the United Nations.

To do any of these things, however, they must remember who they were before they were captured. It’s time to break free from Stockholm syndrome.

[Dr Margi Prideaux is an international wildlife policy writer, negotiator and academic. She has worked within the conservation movement for 25 years. Her forthcoming book Birdsong After the Storm: Global Environmental Governance, Civil Society and Wildlife will be released in early 2017.  She writes at www.wildpolitics.co and you can follow her on twitter @WildPolitics.]

FURTHER READING:

Fundacion Pachamama is Dead – Long Live ALBA [Part VII of an Investigative Report]