But this strategy is not just self-defeating. It is a dangerous illusion that masks the way capitalist growth undermines conservation itself.

The concept of natural capital is hot. Over the past decade a growing network of actors and organisations has banded around promotion of this concept as the key to the future of sustainable development. At the recent World Conservation Congress, natural capital was front and centre, with a launch celebration of the Natural Capital Protocol and announcement of yet another new coalition to develop private finance for conservation.

These, and many other initiatives, describe natural capital in simple terms as the nature, water, or the air that we live with on a daily basis. The Natural Capital Forum, for example, says the concept refers to

the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines.

This example – and indeed most others are premised on the fundamental assumption that “natural capital” can become the basis for a sustainable economy.

Clearly, things are not this simple, as even many proponents of these initiatives acknowledge. What’s worse is that the two main assumptions in this agenda (nature can become capital and provide services, and this could be the basis for a sustainable economy) are based on fundamental fallacies. They will not reverse the negative effects of our global growth-economy. They will in fact make them worse.

What “capital” really means

The fact that the food we eat and the water we drink apparently need to be labeled “natural capital” only becomes meaningful in the context of capitalist growth. In this context everything should, in principle, become “capital”.

It is therefore vital to be clear on what “capital” really means. In daily conversations and some economic theory, the term is frequently defined as a “stock” or as “assets”. More accurate, however, is to see capital as a process, a dynamic. It is about investing money (or value) in order to make more money (or value). In short, capital is “value in motion”.

Capital in a capitalist economy is therefore never invested for the sake of it. The aim is to extract more money or value than had been invested. Otherwise it would not be capital.

It follows that the move from “nature” to “natural capital” is not an innocent change in terminology, another word for the same thing. Rather, it constitutes a fundamental reconceptualisation and revaluation of nature. Natural capital is about putting nature to work for capitalist growth – euphemistically referred to as green growth.

The move from nature to natural capital is problematic because it assumes that different forms of capital – human, financial, natural – can be made equivalent and exchanged. In practice – and despite proponents’s insistence to the contrary – this means that everything must potentially be expressed through a common, quantitative unit: money. But complex, qualitative, heterogeneous natures, as these same proponents acknowledge, can never adequately be represented in quantitative, homogenous money-units.

And even if we try, there is an untenable tension between the limitlessness of money (we can always generate more money) and the limits of natural capital (we cannot exchange evermore money-capital into natural capital, for all eternity).

Natural capital is therefore inherently anti-ecological and has little to do with giving value to nature, or rendering this value visible. It is the exploitation of nature to inject more value, and seeming legitimacy, into a faltering capitalist growth economy.

Failing capital markets

Another assumption is that natural capital can form the basis for a sustainable society. In practice, however, it has become clear that investing in natural capital is not all that attractive for most companies, investment firms or even governments. So, even if a price tag has been put on nature – which can never adequately capture its total value – recent research shows that markets for natural capital and ecosystem services are mostly failing. In practice they are usually not even markets at all. Rather, they are subsidies in disguise.

Further, actual private investments in natural capital are negligible compared to investments in unsustainable economic activities. This is because these are much more profitable, and hence a much better form of capital or “value in motion”.

When Ecuador, for example, asked government and private actors to invest in conservation of the Yasuni protected area, the promised investments stayed far below what was hoped for. Actual donations were much lower still. As a result, the country is now allowing companies to drill for oil in the park.

The common argument made by proponents of natural capital, namely that it helps to make the value of nature visible, is therefore deeply flawed. The value of nature is perfectly visible to investors. They know that destroying it is far more profitable than saving it.

Destruction for protection?

An even more fundamental point is that destruction of nature is increasingly becoming the basis for the conservation of nature. Programmes built on natural capital are usually geared towards offsetting the destruction of nature, which becomes the main source of the money needed for investing in conservation. In the logic of natural capital, investments in unsustainable economic activities are therefore “compensated” by equal investments in sustainable activities.

This practice, which in theory should lead to no net loss of – or better yet, net positive impact on – nature and biodiversity, leads to an untenable contradiction. It means that nature can only be conserved if it is first destroyed.

But as indicated above, this is still mostly a virtual problem since actual investments in conserving natural capital have remained insignificant. Even worse, companies generally invest much more in strong lobbies to keep environmental regulation to an absolute minimum. If they really believed that conservation would be profitable, there would be little incentive to pursue this lobbying any more.

From quantity of growth to quality of life

The conclusion is clear: natural capital is no practical or realistic solution to integrate nature into the economy or make its values visible. It is a dangerous illusion that will not only worsen but also legitimate the environmental crisis. And while some probably really believe in its potential, most of those at the helm of the current economic system must see on a daily basis that natural capital is illusory.

But by participating in it, they also know that more fundamental questions about the logic of our economy and who benefits from it are not asked. And hence they do not have to provide any answers.

But we do have to ask these questions: should we not start weaning ourselves off an economy predicated on an unsustainable quantitative growth-fetish? Should we not build an economy focused on people, nature and equality rather than one based on putting forth money only to ultimately make more money? Most especially, should we not build an economy focused on quality of life rather than quantity of growth?

With some imagination, the answers are not only straightforward but also practical, logical and truly sustainable.

The four-yearly World Conservation Congress of the International Union for the Conservation of Nature has just taken place in Hawai’i. The congress is the largest global meeting on nature’s conservation. This year a controversial motion was debated regarding incorporating the language and mechanisms of “natural capital” into IUCN policy.

But what is “natural capital”? And why use it to refer to “nature”?

Motion 63 on “Natural Capital”, adopted at the congress, proposes the development of a “natural capital charter” as a framework “for the application of natural capital approaches and mechanisms”. In “noting that concepts and language of natural capital are becoming widespread within conservation circles and IUCN”, the motion reflects IUCN’s adoption of “a substantial policy position” on natural capital. Eleven programmed sessions scheduled for the congress included “natural capital” in the title. Many are associated with the recent launch of the global Natural Capital Protocol, which brings together business leaders to create a world where business both enhances and conserves nature.

At least one congress session discussed possible “unforeseen impacts of natural capital on broader issues of equitability, ethics, values, rights and social justice”. This draws on widespreadconcerns around the metaphor that nature-is-as-capital-is. Critics worry about the emphasis on economic, as opposed to ecological, language and models, and a corresponding marginalisation of non-economic values that elicit care for the natural world.

Naturalising ‘natural capital’

The use of “natural capital” as a noun is becoming increasingly normalised in environmental governance. Recent natural capital initiatives include the World Forum on Natural Capital, described as “the world’s leading natural capital event”, the Natural Capital Declaration, which commits the financial sector to mainstreaming “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 that aims “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 share the UK Natural Capital Committee’s view that “natural capital” consists of “our natural assets including forests, rivers, land, minerals and oceans”. People used to talk about “nature” or “the natural environment” – now they speak of “natural capital”.

So what does the word “capital” do to “nature” when they are linked? And should nature be seen in terms of capital at all? One controversial aspect, backed by IUCN’s Business and Biodiversity Programme, is receiving particular attention. This is the possibility of securing debt-based conservation finance from major institutions and the super-super-rich based on the value of income generated from so-called natural capital assets conserved in situ.

Capitalising natures

At the IUCN’s conservation congress a Coalition for Private Investment in Conservation was launched. Led by financial services company Credit Suisse, and backed by the IUCN and the World Wide Fund for Nature, the coalition builds on a series of recent reports proposing capitalising conservation in exactly this way.

In 2016, and following a 2014 report, Credit Suisse and collaborators published two documents outlining proposals for debt-based, return-seeking conservation finance. The most recent is called Levering Ecosystems: A Business-focused Perspective on how Debt Supports Investment in Ecosystem Services. In this, the CEO of Credit Suisse states that not only is saving ecosystems affordable, but it is also profitable, if turned “into an asset treasured by the mainstream investment market”.

The report proposes a number of mechanisms whereby “businesses can utilise debt as a tool to restore, rehabilitate, and conserve the environment while creating financial value”. The idea is that as “environmental footprints move closer to being recognised as assets and liabilities by companies, debt can be used to fund specific investments in ecosystems that lead to net-positive financial outcomes”. Debt-based financing – for example, through tradeable securities such as bonds – is framed as attractive in part because interest received by investors is “usually tax-deductible”.

The Levering Ecosystems report followed quickly from Conservation Finance: From Niche to Mainstream, steered by a small group including the director of IUCN’s Global Business and Biodiversity Programme. This report estimated the investment potential for conservation finance to be roughly US$200-400 billion by 2020.

Of course, investors loaning finance to projects associated with conservation also expect market-rate returns to compensate for investments considered to conserve, restore or rehabilitate ecosystems.

In the documents above, financial returns are projected as coming in part from new markets in payments for ecosystem services and sales of carbon credits. These new markets will supply the potentially monetisable “dividends” of conserved and restored habitats as “standing natural capitals”. Investor risk is proposed to be reduced through mobilising these assets, as well as the “land or usage rights” from which they derive, as underlying collateral.

The graphs above present two schematic diagrams redrawn from the Credit Suisse texts to indicate how these flows of financial value may be leveraged from areas capitalised as investable natural capital. The models are based in part on expectations that recent United Nations Framework Convention on Climate Change support for international carbon compensation mechanisms will release new long-term sources of public funding to “balance anthropogenic emissions by sources and removals by sinks of greenhouse gases”, thereby boosting possibilities for financial flows from forest carbon.

Such financialising moves, nascent and clunky as they are, may yet have significant implications if applied to countries in the global south with remaining high levels of “standing natural capital”. Caution is needed regarding the possibility that forest-rich but least developed countries may become indebted to ultra high-net-worth investors who access returns on their investments from new income streams arising from conserved tropical natures in these countries.

What’s in a name?

In 1986, the central secretariat of the WWF decided to change the name of the organisation from the World Wildlife Fund to the World Wide Fund for Nature. The thinking was that an emphasis on “wildlife”, borne of a concern for endangered species, no longer reflected the organisation’s scope of work for the conservation of the diversity of life on earth. It was considered that overall the organisation would be better served by the term “nature”. In other words, it seems that naming and framing “nature” matters.

Given the conversations and debates at IUCN’s World Conservation Congress, it seems important to ask: how exactly does the conservation of natural capital equate with the conservation of nature? Do these terms in fact invoke different things? If they do, then it is worth clarifying whether the conservation of natural capital is always good for the conservation of nature. If they don’t, then it remains worth querying why exactly “nature” needs to be renamed as “natural capital”.