By Ray Podder and Rajesh Mehta
We cannot fight nature, we are nature.
As crazy climate plays musical chairs on this anthropocene, the usual suspect stewards of our operating systems are rolling out new rules in attempts to course correct from possible mass extinction into massive economic expansion. What a beautiful thought!
The World Bank, United Nations, EU Commission, IPCC climate and data scientists, ecosystem service enterprises and more are all leaning into the accounting standards for the economic value that nature produces. Redefining nature as the next essential asset class, or natural capital as a foundation of all economic value. Imagine!
The next big…
Our next natural capital based economy is projected to more than double this one, with some estimating 20x returns to over $152 trillion by 2030. Very promising, though when the authorities founded on the ideas that got us here, are also the ones authoring our way forward, we must review these next possibilities at their roots before assuming we’ve arrived.
READ: Disruption caused by climate crisis will be much worse: Shayok Mukhopadhyay (September 12, 2023)
A radical rethink is critical when so much is at stake.
We can’t forget that the fiat money now set to measure nature is still designed as debt against our children’s futures. The BRICs challenging the hegemony to unplug the global economy from the petrodollar now with new payment systems, still can’t fix how we got here.
The biggest opportunity of our lifetime?
Prices for carbon storage set through restorative practices like planting trees, can release subsidies to landowners and corporations. However, the practical business intentions to use these subsidies to offset their property taxes and access liquid cash, cannot compare to what they can make by exploiting nature now.
Article 6 of the Paris Agreement allows polluting industries in developed countries to offset their environmental responsibility by buying carbon credits in developing countries where it’s cheaper. While that sounds good, this practice continues to keep polluters in the clear while fattening the pockets of corrupt politicians.
Sure, pricing carbon, water, soil and biodiversity are all rooted in noble intentions, yet as Oscar Wilde once said, we also risk knowing the price of everything and the value of nothing!
If we’re not wise about how we step next, we could find ourselves in our very own Twilight Zone, with foil suits and gas masks as haute couture, into the pay-to-breathe reality of Dr Seuss’ Lorax!
Here is the dilemma: a crisis for our commercial practices—not so good…as well as the next opportunities for natural capital markets when we redesign from the roots—all good.
Reexamining our core assumptions of how we measure, store and trade on nature’s values as capital, can open a world of opportunities for all of us—both present and future generations.
READ: US, other nations primarily responsible for climate crisis should address inequalities: Van Hollen (January 18, 2023)
We know that land depreciates with resource use, yet we price it higher for future use with more debt, by rents yet to be earned. Assuming this is how it is. However, with the next natural capital terms from the aforementioned institutions, our data science can shift real estate valuation on its head. But how?
Bottom up accounting of real time data can guarantee income contracts and usage rights for both seller and buyer. Reversing the dilemma of real estate valuation by unlocking debt free liquid capital for landowners, and more accurately predicting future valuations for the land’s most regenerative, efficient, highest and best use.
Working solutions are already here!
Digital protocols designed to decipher bottom up data flows, let us know the future spending power of natural capital in the present, making values traceable, tradable and unaffected by inflation or prices. This is now being applied in regional restoration projects, transforming risky financial instruments into non-inflationary utilities.
READ: Disappearing islands: inevitable climate change phenomenon (July 29, 2022)
Opening up lucrative upsides for landowners, residents, entrepreneurs and retail investors with real options for evolving and reviving the real value of real estate.
Markets to networks-reconnecting possibilities.
Markets cannot solve all our problems. Replenishing the commons minus the tragedies are the next network redesign challenges if we are to transcend what is no longer working.
Open source networks like GitHub, and Decentralized Physical Infrastructure or DePin networks like Helium, show us new possibilities for equitably sharing with those who contribute to our shared benefit resources.
Yes, our institutions can pave the pathways. Yes, our digital platforms can blur the lines between buyer and seller, like social networks converting broadcaster and audience into roles that anyone can play. Yes, we too can realize that we are the source of the production that that GDP projects.
Though our real challenges go much deeper.
It’s not technical, it’s societal. Full stop.
Our current all about me socioeconomic structures have to, or get to, if you are looking at this macroscopically with at least one eye open…evolve into equities for everyone as our playing field expands to include nature. She’s more than a player to be considered! She is the game!
The How vs. The Why
The how can be explained, but the why is where it gets tricky. Why reason with people if they cannot see the future first? Why indeed. Our neoliberal conditioning tempts us to believe we have the answer to : Who owns the sky? While our indigenous elders knew better.
READ: Gulf of Mexico escaped climate change 56 million years ago (June 3, 2022)
The collective approach undoubtedly hits at our core beliefs, philosophies, cultural identities and inherent biases, it underscores a hoarding/me first mindset. We all know that survival is everyone’s goal, has been since the Stone Age, though when we start to see that survival is interdependent, we can evolve towards a new era of equitable economics for everyone. Sorry, it’s true!
Adapt or die. Evolve or repeat. We’ve all heard these, but what’ll it take for them to hit home? Our repeat options have timed out. Designing to de-risk our compounded collective dividends by combining assets of multiple owners into shared pool is a start.
Our natural capital assets and digital advancements now place us at the precipice of prosperity like we’ve never known. How we decide to see, solve and share will set our legacy for generations to come. Let us be wise enough to see who we really are, and humble enough to pay long overdue respects to our mother.
Nature evolves on her own time. We are nature. Now It’s our time.
(Ray Podder is a designer, digital architect and inventor of the O-protocol—building real world digital transformation projects to empower economic evolution for everyone.
Rajesh Mehta, a Contributing Editor, is a leading US expert based in India focusing on areas like Market Entry, Innovation and Public Policy.)