The Economics of Nature

The founder and chairman of Conservation International makes a plea for a sound and sustainable economic future.

Twenty years ago, Peter Seligmann, the chairman and CEO of Conservation International (CI), visited a village of the Kayapo people, an ethnic Brazilian tribe. The Kayapo once inhabited lands that reached into the outer rung of the country, but development has pushed them ever further into the interior. Nevertheless, ten thousand ethnic Kayapo still live on an astounding 20 million acres of forest. When Seligmann visited them, in 1989, he asked the Kayapo chief, "How do you still have all this territory?" The answer was life-changing: "Because we are warriors, and we are protecting our lands." The Kayapo knew that they depended on nature for their sustenance and survival and so it was worth defending. The developed world has the same dependence, Seligmann says, "Except that we don't know it anymore."

In four decades, the world will be inhabited by 9.2 billion people, a 33% increase in 40 years. Two billion more people are going to enter the middle class. That is twice as many people who have been in the middle class since the beginning of civilization. The demand for energy will consequently double, and the need for more food and water will rise exponentially. Contrary to all efforts to curb CO2 emissions, the world will experience a 70% increase in the use of fossil fuels in the next four decades. And all this will occur while the extinction rate is currently 1000 times that of "normal." And yet we exist blissfully unaware of what is disappearing: Developed peoples don't know where their food comes from, where their water comes, or where their energy comes from. Nature itself has become invisible except as a place for recreation. All told, Seligmann said, "We have a development paradigm that does not work. That's our reality."

"When we started Conservation International," he said, "our mission was very simple: we wanted to preserve biodiversity." Through a variety of partnerships with national governments (German, French, Japanese), the organization was able to preserve roughly 500 million acres of "marine and terrestrial biodiversity hotspots" -- the equivalent of a 30-mile-wide band around the entire earth. For a while, Seligmann says, he was proud of what his organization had achieve in just over two decades.

Because humanity needs nature to thrive, and without natural sources there is no stable society (no food, water, health, and therewith, social or financial stability), Conservation International needed to change its mission from one of protecting biodiversity to "maintaining the health of ecosystems that give service to humanity." Governments responded more immediately than ever before to Seligmann's calls and CI's initiatives, because CI made the case that long-term national sustainability depended on nature and protecting her assets from over- and unwise development. CI began to explain why society, in very real, concrete terms, needed nature, and, moreover, why models of development needed to change how they were helping so many rural poor throughout the world.

The William and Melinda Gates Foundation, for one, responded with flexible thinking. They are dedicated to raising 100 million families out of poverty in rural Africa through agricultural reforms, and they aim to do so by erecting three pillars: different seeds, farming technologies, and creating markets. But, CI reminded the Gates Foundation, farms cannot survive without good soil, clean water, and thriving forests. By emphasizing the links between biodiversity, local annual precipitation, forest canopies, ecosystem services, and agricultural output in the nine major bread baskets in Africa, CI and the Gates foundation were able to correlate statistical data that have never been brought together (the joint venture was called the Global Monitoring Network) in order to rethink what it meant to encourage and plan development over the long term.

As abroad, so at home. Seligmann met with Lee Scott, the CEO of Wal-Mart. He handed Scott a piece of salmon bought at the company's home store in Bentonville, Arkansas. "Number one" Seligmann said, "You sell this for twenty-cents per pound cheaper than anyone else. Number two: the pink in this fish is dye. And number three, this fish was farmed off the coast of Chile, which is now a wasteland." Scott stepped back in earnest and said, "I just had my first granddaughter last week, and I don't want to do that." Conservation International helped Wal-Mart begin a project, joined by several other major NGOs, to reduce their impact on the environment that would effect every one of their 8,500 stores (Wal-Mart is the biggest private employer in the world, with over two million employees in fifteen countries, under 55 different names). Today, across all Wal-Mart locations, non-green suppliers may not supply Wal-Mart with any goods, a move that effected 100,000 independent suppliers. In one area alone, recycling, Wal-Mart saved $300 million a year by demanding that all packaging be recyclable. Conservation is not only good for the environment; it is also good for business.

"If we consider nature to be for free or valueless," Selgimann reminded the audience, "then we will only know that is not valueless when it is gone." Companies need to reevaluate their economic models to include "natural capital" appreciation, in addition to their financial and cultural capital added value. By taking into consideration the actual value that nature is already adding to businesses (for example, in using clean water), the value of those "assets" quickly becomes apparent. The bottom line: we don't just need conservation based on existing models; we need new economies that work with conservation built into them.

For all the depressing news out there, Seligmann says, we should not give up hope. "What we see emerging today is a plethora of public-private partnerships," he says. And although "Europe is way ahead; and the United States is way behind, never in history have more students, businesses, governments, and cultures come together around a common theme."