Efforts to address climate change and safeguard the natural world, treated as separate issues for far too long, are now beginning to converge through multilateral processes, civil society engagement and the private sector. While spiritual practices and traditional knowledge have held reverence and respect for nature, market forces have typically undervalued ecology and prioritised development choices that have destroyed ecosystems and indigenous communities across the world.
In The Case for Nature, Siddarth Shrikanth argues that it is not too late for the financial system to mainstream the logic of “natural capital” and assign dollar and biophysical values to the variety of services that ecosystems provide, ranging from food, fuel and fibre, to their integral role in the climate crisis.
“We know nature is priceless, but that doesn’t mean it doesn’t also have value,” said Shrikanth in an interview. The idea of natural capital is already in application but in a narrow way, in an equation “almost always tilted towards more extraction”, he said. “This framework looks more broadly at nature’s value, recognising that that’s not the whole of its value.” He argues that there is a growing imperative as well as new streams of capital to protect existing wild and wondrous places and restore habitats that we have lost.
His book takes the reader on a journey of understanding the varied potential applications of natural capital from the sal forests of Kanha to the mangroves standing as sentinels on the shores of Mumbai to the coral reefs of Palau. Shrikanth is both clear eyed about the challenges associated with biodiversity loss and our rapidly heating world, and also hopeful about the role this new paradigm could play in addressing these twin crises. Excerpts:
What were your early experiences that influenced the book, and your subsequent journey with embracing the language and logic of economics and finance towards nature?
My love of nature began a long time before I was [trained as] a biologist. My family – my grandmother, dad and mom – all loved nature and worked on conservation in different ways. The biological science framework I was steeped in when I was in undergrad gave me a sense of the interconnectedness because ecology is more than the sum of its parts. We’ve only scratched the surface of that complexity with our scientific method. And so I left thinking this is incredibly hard to figure out and we’ve made a dent but we never will fully understand nature and natural systems.
With that in mind, I didn’t go down the academic path; I instead went down the business route partly because I realised that we could certainly be doing more to understand ecology, but we now know that it’s not in good shape, and that there needs to be something done about it. I felt like I could make the greatest contribution, not as a scientist working in research, but as a practitioner working on solutions that surround the science and make it come to life.
Tell us about some of these new concepts that have entered the scientific mainstream in terms of ecosystem services and natural capital. How much of our world and economy are more dependent on nature than what we previously understood?
Natural capital is a really simple concept if you boil it down. We know nature is priceless, but that doesn’t mean it doesn’t also have value. The framework of natural capital can help us understand that value, or the different facets of that value. The related concept of ecosystem services focuses on how that translates in interactions with human society. All the physical commodities that nature provides – food and fibre and fish and all the other things – are provisioning services for human society.
We’ve also got a number of intangible cultural and spiritual services that surround that. The third bucket is perhaps overlooked of the ecosystem services which are not tangible, but do have a huge impact on human wellbeing. [These are] things like carbon storage, pollination, nutrient cycling, water quality and quantity, which we historically haven’t valued.
We already apply a sliver of natural capital thinking to some small part of nature, but because we value it so narrowly, that equation is almost always tilted towards more extraction. This framework looks more broadly at nature’s value, recognising that that’s not the whole of its value. There’s a lot more that will always sit outside the economic framework, but [natural capital can more] fairly balance these different services and make judgments and decisions that can help protect and restore nature rather than simply degrade it.
As you have acknowledged, GDP [gross domestic product] or dollar terms will never fully capture the value. How have you addressed the tension between the intrinsic and instrumental aspects of nature and natural capital in the book?
It’s a tension that I continue to struggle with because there isn’t an easy answer. I think it’s easy to be a purist and say we just need to price nature or intrinsic motivation should be enough. But the reality is that we live in a market economy, and the stewards of our land and our seas face the pressures of a market economy every day. Although the intrinsic case alone was always enough for me, we can recognise that there is this kind of act of balancing the head and the heart when it comes to protecting and restoring nature.
We need to be comfortable making these two different types of cases: on the one hand that it can make hard-nosed, practical sense to value nature and invest in nature. And on the other hand, we need to cultivate a sense of wonder in nature that can underpin a lot of this work. For some of the business or government leaders who have been pushing this agenda on the economic side, this began with an intrinsic love of nature. And so keeping that alive and encouraging that I think is hugely important. I also think it can help to look to indigenous worldviews about how to conceive of nature. The core of it is that nature is something that’s relational, not something to be admired from afar before we come back into a modern world, but fundamentally that we are nature.
Beyond the climate and environment community, how do you see natural capital entering mainstream through consumer consciousness or the capitalism paradigm?
It’s happening but not quickly enough. Nature provides us [many things for] free as public goods. The cost of those public goods are borne by society at large when they stop being provided. In some ways, the effects are first felt by governments when you have a constant degradation of our natural capital. As one example, there’s a tremendous flood resilience problem across the world because we’ve destroyed coastal mangrove systems. What isn’t being done enough of is [acknowledging that] our economic frameworks are not fit for purpose, that companies and governments’ balance sheets are not incorporating natural assets. I think that’s the first shift we really have to make and where we’re unfortunately not on track to think about this in the right way.
What gives me hope is that on the citizen and consumer side, some of this new logic is taking hold. While I believe in systems change and am not convinced that individuals on their own in their personal lives can make grand systems change, it’s really important to start somewhere. There are lots of examples I cite in the book of individuals who, from community based rewilding projects to using their voices in their jobs or are in public office trying to make a difference.
What are the different categories of investing in nature? Why have past efforts perhaps either failed or faltered? And what’s different about our approach today?
There are lots of ways of investing in protecting and restoring natural systems. The book I’ve written is not necessarily about private profit but about economic logic. I cite examples of city governments who are facing the costs of increasing heat and flooding and investing in restoring bringing nature back into our cities to make citizens’ lives better and healthier. The return they get is avoided loss and avoided costs for their citizens. I cite an example of a nonprofit called Blue Forest in Northern California, which helps private investors help fix a huge problem of forest fires burning with increasing intensity, because there isn’t enough money to tender. Private companies have never had a mechanism to pay for restoration and Blue Forest is helping to create this.
We can go all the way up to the level of national governments in places like the Seychelles or Belize where there are large scale debt for nature transactions which are reducing their public debt and the amount they owe private creditors in return for investing in marine protected areas or reefs. These debt burdens were unsustainable and getting worse, and transactions like these can show that local economies can become more resilient if they can incorporate natural capital value through ecotourism through better fishing catch to lots of other services.
We now understand that a simplistic notion of just planting trees can create all sorts of problems if done through monocultures or in areas that were not forests. What are some of the less familiar habitats that are just as important for their own sake and and from the standpoint of investability?
This is a really important point. Not every area is meant to be a forest and a collection of trees is not a forest. [The focus should be on] restoring the ecology of a place and returning it to a state that improves the functioning of that natural ecosystem.
Mangroves are really important and there so many benefits to protecting and restoring them from flood resilience for communities that live nearby to incredible carbon storage (often more than tropical rainforests), mangroves are fish nurseries that can help fish populations in the area rebound in a really powerful way for local communities. And of course, they provide provisioning services like wood for the communities that live there. If you think about a system that if sustainably managed, it can also restore human communities.
Coral reefs are incredibly important, and aren’t necessarily the highest carbon ecosystems but have incredible biodiversity benefits and can help the entire coastal areas regenerate. I cite examples of Fiji and Belize finding that they can protect and restore these amazing ecosystems and ensure better lives for their citizens.
If we zoom out of some of these leading edge case studies, we must look at the underlying drivers of biodiversity loss and the climate crisis – large scale intensive commercial agriculture, the meat industry, overfishing, mining, logging, overconsumption, and energy needs which are extremely carbon intensive. How do you touch upon these issues in the book?
People often think climate change is the biggest cause of biodiversity loss. It’s up there and it will increase but historically, habitat loss, over exploitation and invasive species are the three major causes of biodiversity loss. First, habitat loss typically [takes place through] turning forests or grasslands into agricultural land, which often degrades over time and becomes incredibly unproductive. Second, there is this issue of over exploitation which is just taking too much from nature. [Issues like] native logging or wildlife crime are still huge problems that happen all over the world. And finally, invasive species are those that have been moved around by humans and disrupt native ecosystems.
Number one and two are deeply linked to agriculture, so I devote an entire chapter to our food system and whether it’s fit for purpose. To its credit, the current food system is feeding eight billion people, which is incredible but we are doing that at the cost of our natural capital. We’ve drawn down the stock of soil health, nutrient cycling and microbial diversity to the point that we need a radically different food system that is much kinder to the planet. That begins with restoring some of the agricultural soils that we will need if we’re going to sustain human populations into the future. I cite examples of regenerative agriculture – food production that can protect soil health and nature and provide food to people.
We also can’t get away from the fact that the food system cannot produce the amount of food it currently produces if meat consumption continues to increase, because a huge proportion of the food we produce is then fed to animals that are then fed to us. Although I’m personally vegetarian, this isn’t necessarily an argument for vegetarianism; it is an argument that the maths doesn’t work if we don’t use our land more efficiently.
It’s fundamentally true from a mass balance transfer perspective that taking our food system and running it through animals before it reaches us is incredibly inefficient. We will probably have to create a food system that is more plant based, more regenerative and ideally more locally rooted in places where people can develop diverse food systems as close to home as possible.
In India, we are seeing a weakening or dilution of environmental regulations. How can the new paradigm around natural capital strengthen conservation efforts and make a case for restoration through the bankability of projects and nature based solutions?
One of the most effective levers to achieve India's climate goals involves protecting and restoring nature through its Nationally Determined Contribution [target of creating a cumulative 2.5-3 GtCO2 carbon sink by 2030 as part of the United Nations Framework Convention on Climate Change]. If you look at the carbon abatement in terms of the marginal cost of abatement, you can get a huge amount in the near term from better managing our soils to stop releasing so much carbon, from just protecting every standing native ecosystem. We also have this huge potential to draw down carbon by restoring natural ecosystems like mangroves, forests and so on. If India is to meet its climate goals, nature has to be a part of that.
India is also a place with 1.4 billion people so in some ways, the ecological pressures that come with degrading natural capital are felt most keenly here. India will have to live within its ecological limits. The agriculture system is where this is going to be tough [because] we’re already seeing declining harvests, incredible challenges in the farming community around producing food for a country that’s big, while maintaining reasonable incomes. I think the only way to do that is to transition that food system away from an industrial, extractive process to one that begins to restore soil health and therefore yields.
Finally, some of the ecosystems in India are globally unique and the country has done a really good job of restoring specific populations. So the tiger population, for example, has rebounded from 50 years ago from just a few hundred individuals to a healthy population within protected areas. I’ve taken heart from seeing the public come along that journey and become incredibly involved in this specific story of nature recovery. It is amazing to see how much public support there is for something like that. Now we do have to broaden beyond charismatic megafauna to encourage people to care about ecology as a whole.
India is also unique because there are hundreds of millions of families, often indigenous, who directly depend on nature for their livelihoods. With a sense of urgency about certain biodiversity and conservation goals, to what extent are you concerned about a potentially top down effort leading to a privatisation of nature? How can we move past the legacy of fortress conservation to actually work on co-creation, with indigenous communities, leveraging their worldview and their traditional regenerative practices?
It would be a shame if we simply replicated the structures of inequality in nature as we did in every other part of our economy. One of the most important stakeholders in this movement should be indigenous people who steward the land, and who ultimately need to be leaders, not just partners, in this journey to value natural capital. There are indigenous groups and local communities in India and across the world, who are taking their fate into their own hands. If you think about the choice that many of these groups face, on one hand, you have very limited opportunities to get paid for the services they provide. And on the other hand, you have more extractive routes to prosperity as populations grow and frankly, ecosystems decline. So it’s not surprising that these are really hard choices for indigenous groups, and some of them have to over-harvest or exploit to make ends meet.
There is an important statistic about 80% of the world’s biodiversity, which I think refers to 80% of the world’s endangered species, being within areas or territories stewarded by indigenous people. This points to how important working with indigenous people is in this journey. So [we need to] create the conditions where indigenous peoples can take their fate into their own hands and make informed choices that are free and fair. For those groups that want to participate in a market based system, we should give them the right to do that and make sure the benefits flow back. And for the groups that choose not to do that, we should respect their choices and allow them to steward the landscapes in whatever way they see fit.
You’ve talked in part about the protected areas which we can see as the beating heart of the conservation story, but we need the functional arteries of the corridors, the dispersal areas, the buffer zones, while dealing with feeding a vast and growing population, while dealing with an urbanisation transition. Given these constraints, talk us through the role that you see nature playing in urban settings.
I think of this as a tapestry with lots of different pieces. A landscape that is truly nature positive includes protected areas that are set aside for nature; it includes an agricultural system that produces food while protecting and restoring nature; and it does include urban areas, because that’s where most people live and where some of the effects of the loss of nature are being felt. If you think about the urban heat island effect, anyone who lives in a city in India has felt this in the summer. Part of that is because the built environment we’ve created radiates heat out rather than absorbs it. The same is true of rainfall. The reason cities flood is that they’re not sponges, they simply hold water at the surface. City [governments] have begun to realise that bringing back nature into these urban areas can help address some of the problems that citizens face most keenly. They have found that investing in shading cities and providing many more green spaces makes a huge difference to the urban heat island effect. There are also some other kinds of more, more indirect benefits like how making our cities greener leads to happier, healthier and more economically productive lives. Nature belongs in our cities as much as it does in our fields and forests.
Your book is subtitled the other planetary crisis and to a certain extent, the climate crisis and the biodiversity crisis operate on different timelines and through different global processes. There are ways that trying to address them are complementary, but there’s also some ways in which they do we need to be thinking about trade-offs. How do we move beyond the binary which has held sway for so long between development and conservation and start thinking through some of the trade-offs?
This is a really important question but I’d slightly change the premise. In most cases, it’s a trade-off between climate action and nature recovery on the one hand, and the set of vested interests that protect the current system on the other hand. And so if you think about why it’s so hard to site renewable power or transmission, it’s not necessarily because of nature conservation but because there are lots of vested interests across along the way and a ton of bureaucracy that prevents that from being rolled out. So first and foremost, we need to address the causes of a slow energy transition.
I think it’s natural that there will be some places where there are direct trade offs between climate action [and infrastructure]. To give you a specific example, Kenya built this high speed rail line from Nairobi to Mombasa that runs directly through Nairobi National Park. There’s this bizarre sight of an elevated highway with a train running through zebras and lions and giraffes and a grazing underneath.
I think that was a compromise between the government and the local community where they said we are going to elevate this so that the ecosystem that is currently well protected can continue to function. This is not a perfect example of resolving a trade off, but it’s certainly one way lots of different stakeholders had input. So there are lots of cases [that show] it’s possible to create ambitious climate action and protect nature. In most cases, the primary objective needs to be to dismantle some of the vested interests that prevent action on climate and nature, but where you do have trade offs, resolve them honestly and consult local stakeholders.
Emerging markets and developing economies today have a growing pie of emissions and population, but they also have a unique opportunity to build right the first time around. At the same time, they often have the greatest concentration of both the diversity and abundance of species. So if we look at some of the current trends, what are current global or domestic efforts to build a nature- and climate-positive development paradigm that gives you the most hope?
I should start by saying there are not enough. But we do see examples, particularly at the local level, where you’re seeing interesting ways of combining development and ecological civilisation. There’s a classic example of Costa Rica of their development journey going from a low income to middle income country at the same time as they’ve overseen dramatic recovery in their forest ecosystems. They did that in part by paying for ecosystem services but also through effective, honest governance that respected local stakeholders and was a bright spot in the region. On some level, it all comes back to effective governance, policymaking, having public debates that cover the right topics where there’s free and fair exchange of information. Those are the conditions not for good decision making, not just on this topic, but on every other social issue. That’s at the heart of how we solve this.
Aaran Patel works in climate change philanthropy and policy and is the co-founder of Earth Focus Kanha.
