People-powered nature markets
The saying ‘you can’t manage what you can’t measure’ is often used to explain why we need to incorporate nature into our economies. But… who is doing the ‘managing’?
The saying ‘you can’t manage what you can’t measure’ is often used to explain why we need to incorporate nature into our economies. But… who is doing the ‘managing’?
When it comes to biodiversity, 17 countries stand out from the pack. These ’megadiverse’ nations — Australia, Brazil, China, Colombia, Democratic Republic of the Congo, Ecuador, India, Indonesia, Madagascar, Malaysia, Mexico, Papua New Guinea, Peru, the Philippines, South Africa, United States and Venezuela — house our most critical (and often, most threatened) ecosystems.
Put another way, when it comes to natural capital, these are the world’s 17 wealthiest nations.
But, with the exception of Australia and the United States, all of these nations are considered low- and middle-income. This is cause for pause — because megadiverse nations will undoubtedly be the focus of emerging nature markets and models.
As discussed in our ‘should we put a price on nature?’ newsletter, there’s nothing inherently good or bad about technology. And as explored in ‘four ways to put a price on nature’, doing so has the potential to finance environmental stewardship for the benefit of all species. But if we want nature markets and models to empower the people managing the world’s most critical biodiversity, we need to keep three considerations in mind, each of which we’ll discuss in length in this newsletter.
Indigenous peoples are custodians of 80% of the world’s biodiversity — but they are often without legal rights or financial compensation.
Global industrialisation fuelled nature’s destruction — and this colonial legacy lingers today.
Humans and nature are increasingly at odds — but we don’t have to be.
But first, a disclaimer. These three considerations may challenge some of your assumptions and force you out of your comfort zone. They certainly challenged ours. But, we must get clear on the people side of the nature crisis before we talk about markets and models, because if we don’t work alongside the people dependent on and connected to these systems, we won’t succeed.
1. Indigenous peoples are custodians of 80% of the world’s biodiversity — but they are often without legal rights or financial compensation
There are approximately 370 million Indigenous peoples in the world — this is about 5% of the global population. And yet, Indigenous peoples care for about 80% of the world’s biodiversity across about 22% of all land area.
What these numbers tell us is that land stewarded by Indigenous people is incredibly biodiverse. However, despite this, and the fact that Indigenous land custodianship benefits us all in the form of drinkable water, breathable air, flood mitigation and fire management, Indigenous peoples’ land tenure is often unrecognised by governments, while financial recognition or support for maintaining these ecosystem services is rarely provided.
Legal and financial recognition for Indigenous peoples
Joan Carling is of the Kankaney People in the Philippines and was an Indigenous delegate at 2022’s UN Biodiversity Conference. In a 2022 interview with Mongabay, she said: “There’s still a refusal by many states to legally recognise our rights, our lands, territories and resources.”
“In spite of the fact that it’s scientifically proven that the territories of Indigenous peoples are better managed and have better biodiversity compared to those by states, there’s still a refusal to allow us to do that with the security of [having land rights to] our territories,” she continued.
“[This is] because some of the states are also looking into what are the other uses of our territories and its resources. For example, transitional [material] mining as a response to climate change, uses nickel and lithium that is found in our territories.
“In certain communities, people are pressured to make use of their resources because they have nothing to eat. They don’t have money to pay for their children’s education or to pay bills in the hospital if somebody gets sick. Those services are not also given to us. The schools are not there, the clinics and hospitals are not there.
“We protect all this biodiversity that supports humanity, but we don’t get the basic social services.
“There has to be a correction.”
Recognising the Amazon’s custodians, with Savimbo’s Drea Burbank
Savimbo is a credit platform that’s putting a financial value on the Colombian Amazon’s preservation. But unlike many other credits — and some carbon offset projects in particular — which have faced scrutiny for harming Indigenous peoples and local communities, Savimbo was created by Indigenous people, for Indigenous people.
“Indigenous people have paradigms that do not translate to the colonists' world,” co-founder Drea Burbank explains. “Land can't be owned, animals have their own rights, and animals and nature aren't separate from people. They don't share that in the colonists' world in any way, shape, or form.”
So, when creating a credit, Drea had to find a point of exchange that buyers and sellers both valued. She found it in totemic animals and indicator species.
In Western science, an indicator species is one with sensitivity to environmental changes, and whose presence, absence or abundance reflects the integrity of the broader ecosystem. In short, the presence of these species in an area of the Amazon indicates the area is still healthy.
For the Indigenous peoples Savimbo works with, the jaguar, harpy eagle, espingo tree, boa constrictor and bush dog are all totemic animals. And because these totemic animals are also indicator species, Savimbo’s credit bridges the gap between local knowledge and Western science.
“Each credit represents one hectare of conserved biodiversity, in a biodiversity hotspot, with proof of an apex predator, for two months with photo or video evidence,” Drea explains.
“You either have a harpy eagle on your land, or you don't. If you have a harpy eagle, and you know where to find it, then you can get the credit.”
It’s worth highlighting that Savimbo is a conservation methodology, not a restoration methodology.
“Across the market, conservation projects get less money than restoration projects, despite protecting more species. I'm okay with that,” Drea says.
“If our credit sells for a little bit less, it's fine. We just need to get some money to Indigenous leaders, rather than zero. They are people who need financial capital to protect the forest. They need lawyers to get their land rights ironed down, and some of them need patrols or even satellite monitoring to keep the illegal miners away. Many of them need a way to encourage their youth to stay and find jobs on the reserve and not go off to the city.
“I cannot believe the response. Indigenous leaders have been looking for something like this for a long time. Nobody sat down and designed something just for them. And I think that's a real shame because they’ve really been our best climate activists.”
Co-designing natural capital markets and models, with Bloom Labs’ Simas Gradeckas
For natural capital markets and models to have the best chance of succeeding, they need to be co-designed with the people living and working in these landscapes.
This is, in part, because nature is highly localised. Two forests in Ecuador won’t house the same species, let alone a forest in Ecuador and a forest in Indonesia. Local knowledge has the potential to make or break the success of a market or model.
It’s also because land can only be truly protected when those who walk it are invested in its future.
“It makes economic sense for financiers and businesses that want to invest in nature to be community-first,” says Simas Gradeckas, the Founder of Bloom Labs, a research-driven biodiversity finance newsletter and consultancy.
“There's a big push to asset-ise and value nature, but these Indigenous peoples and local communities are not consulted enough. Or maybe they are consulted, but it doesn't mean that their opinions are integrated into final solutions. They're being tokenised. There are a lot of hurdles for them even to join these conversations where the market is designed, so they're being talked about, and shown on stages, but their opinions haven’t been integrated into these biodiversity credit schemes,” he says.
“If you're not going to benefit local communities and Indigenous nations directly, in the ways that they want to be benefited, then why would you ever expect these projects to work in the long run?
“Even though meaningful consultation might mean the biodiversity market starts off slower, or never becomes as large, it needs to start with Indigenous peoples and local communities front and centre. This doesn't mean just talking about them, it means having them co-design the schemes or choose to boycott the market.”
2. Global industrialisation fuelled nature’s destruction — and this colonial legacy lingers today
The Industrial Revolution began in England in the late 1700s and evolved over the following century, seeing a transition away from creating goods by hand to using machines. Important inventions include the steam engine, electric generators and motors, the light bulb, telegraphs and telephones, the internal combustion engine and automobiles. These technological advances often relied on nature as a fuel source — from coal and gas to water and timber.
But not all of these natural resources came from England, nor was industrialisation confined to its borders.
Industrialisation was spread with colonisation, creating new extraction economies abroad that could power factories at home. The Malay peninsula was turned into a plantation economy, with vast swathes of rainforest cleared. New Zealand was a source of sealskins, timber and flax. India was a source of spices, fabric and tea. Africa was a source of diamonds, ivory, bauxite and oil.
When colonisation is discussed today, we often, rightfully, talk about genocide and the erasure of culture — but it’s rare that we talk about how colonists created new extraction economies and enforced a belief that nature is a resource to be exploited. These economies, industries and attitudes remain today.
Historical responsibility and future regulation
Acknowledging the link between the nature crisis and the colonisation of many biodiverse landscapes is a critical precursor to creating foreign policy and regulation.
For example, when historical responsibility for nature’s destruction is calculated, from the years 1850 to 2023, colonial occupation is rarely considered, even though these nations held ultimate decision-making authority at the time.
France’s share of historical carbon emissions rises by half when colonial responsibility is considered, while the United Kingdom’s nearly doubles, the Netherlands’ nearly triples and Portugal’s more than triples. Together, the European Union and United Kingdom’s responsibility rises by nearly a third, to 19%. Meanwhile, India’s share of historical responsibility falls by 15%, to below that of the United Kingdom, with Indonesia and Africa both down by 24%.
Similarly, in the seemingly endless headlines about deforestation in Africa, Asia and South America, historical deforestation is rarely discussed. It’s a huge omission, given more than 80% of Ireland used to be covered in trees, but by 1925, only 1% (PDF download) was forested.
Under the European Union’s new Deforestation Regulation, products exported to the EU — including palm oil, soy, coffee, cacao and rubber — have to prove the land on which they were produced has not been subject to deforestation or forest degradation since December 31, 2020. This regulation is undoubtedly a step in the right direction — however, there’s some bitter irony here too. The European Union is saying ‘we want no part in deforestation’ when its economies were fuelled by nature’s destruction, both at home and abroad. This is not to say we don’t need regulation. We do. We desperately need bold regulation from governments at every level. But cross-border regulations will never be fair and just if history is ignored.
Wealth needs to be redistributed
Nature’s destruction has been the price of two centuries of remarkable economic growth in high-income nations — with poverty rates decreasing and life expectancy and education rates increasing. It’s unreasonable to ask the low-income and middle-income nations not to follow suit, to deny their citizens these same advances, but, this is precisely what is being asked of them.
We now find ourselves in a situation where high-income nations are asking low- and middle-income nations to end deforestation, protect intact forests and bear an outsized responsibility for mitigating the impacts of the climate and nature crises.
Yes, these ecosystems need to be protected, but if low- and middle-income nations are to prioritise natural capital preservation at the expense of financial capital creation, they need to be financially compensated in some other way.
This is where valuing nature and incorporating it into our economic systems comes into play.
3. Humans and nature are increasingly at odds — but we don’t have to be
Our relationship with nature has changed dramatically in the past 250 years.
Colonisation has spread industrialisation, and with it, the mindset that nature exists to be extracted. Meanwhile, high-income nations have experienced high rates of urbanisation, building cities where nature isn’t welcome unless it’s tame, trimmed, pretty and contained. Beyond city borders, nature has been segmented according to uses: there’s land for farming, land for mining, land for hiking on the weekend, and land that’s not to be touched by humans.
The latter is worth considering further because the nature crisis is often depicted as a struggle to conserve these pockets of ‘intact’ or ‘wild’ habitats. The implication is that these habitats are richly biodiverse because they’ve been free from human activity.
But, on the contrary, lands we now see as ‘intact’ and ‘wild’ generally exhibit long histories of human activity. Even 12,000 years ago, nearly three-quarters of Earth’s land was inhabited and therefore shaped by human societies, including more than 95% of temperate and 90% of tropical woodland.
The point? What’s changed is how humans influence landscapes, not that humans influence landscapes.
This is an important distinction. Anyone who reads the news knows humans can, have and do damage ecosystems. But the reverse is true too. Nature can, has and does thrive under human care.
Why it’s problematic to see humans and nature as incompatible
The idea that nature needs to be human-free to flourish has led to ‘lock-it-up conservation’ policies, where Indigenous peoples and local communities are removed from their lands so that national parks can be established.
It’s estimated that 250,000 Indigenous peoples and local communities in 15 countries were forcibly evicted from their homes and land between 1990 and 2014, in order to fence off biodiverse ecosystems and establish protected areas, with reports of houses being burnt down, access to land and important sites denied and food sovereignty eroded. There are cases of evictions to create protected areas from India and Kenya, to Ecuador and Thailand.
This is not to say national parks aren’t an important strategy in our toolkit, or that the creation of national parks always sees people evicted from land. But there are many stories where this is the case.
Going forward, it can’t be nature or humans. It must be both.
The complication, of course, is that people are messy and so is our history. In some cases, the best path forward is ensuring land rights for Indigenous peoples and recognising their ongoing custodianship of nature. But in other cases, there is no clear path forward, because Indigenous peoples have been removed from nature, culture has been erased and traditional knowledge has been lost.
In these latter instances, the only path forward is one of collaboration and compassion. The land we must protect and restore today has evolved in the last few centuries — for better and worse — and how we manage it must too. We need conservation policies that prioritise nature and people in tandem, which recognise that people and nature can thrive together, and that draw on Indigenous knowledge alongside Western science.
Heads in the cloud
In today’s tech-enabled world, many of us work on computers, from air-conditioned offices, solving problems in the cloud.
We don’t see the cables, mines or farms. We don’t know where the goods we order on Amazon come from — they just magically arrive at our door. We don’t see a link between copper and lithium and our shiny phones — we just expect to be able to google anything and everything.
We’re led to believe we engineered ourselves out of nature, that we don’t need it anymore, that we live beyond the physical world. But this couldn’t be further from the truth.
Today’s nature crisis is not a struggle to conserve pockets of ‘intact’ habitats (if it were, it would be a far easier crisis to solve).
Rather, the nature crisis is a struggle to accept that we are entirely dependent on the natural world for survival — and resistance to accept that we need to engineer our way back into nature, not further out of it.
Nature, business and people
At Wedgetail, our three focuses are Nature, Business and People.
Nature, because it is the foundation of life on Earth.
Business, because it is the foundation for economies and livelihoods.
People, because we’re who will be doing the ‘managing’.
It’s people who will be restoring and protecting natural capital for the benefit of all. It’s people from a variety of backgrounds, nations and disciplines who have the knowledge to drive change throughout our economies.
At Wedgetail, we believe the solution to the nature crisis is a rethreading of knowledge systems and reintegration of landscape use cases. We need to draw on Indigenous, technological, scientific, financial, entrepreneurial, agricultural and non-human knowledge to steward our landscapes back to health.
If we want to mitigate the most extreme consequences of the nature crisis, we need to halt and reverse nature’s destruction by 2030. We have six years to rethread knowledge systems and co-design projects that will protect our intact ecosystems and take carbon out of the atmosphere, to create models and markets that prioritise nature, business and people in equal measure.
As we move quickly towards our common goals, we must never forget that it’s people, all people, from every country, who will win or lose in our pursuit of a nature-positive world.
This article was written by: Bronte McHenry
And edited by: Julia West, Lisa Miller and Summer Allen
Wedgetail’s mission is to conserve and restore biodiversity through sustainable investment. We do this by providing financial capital — nature-linked loans, grants and equity investments — to organisations that put biodiversity at the heart of their business models.
If you’re on a nature-positive journey, please get in touch, as we’d love to support you.
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