Monbiot On Saving Nature with Price Mechanisms

He’s opposed. And he makes a good case.

No discussion on his site – might as well discuss it here as anywhere.


  1. Oh dear, we disagree again. I think Monbiot's article is appalling.

    First of all, you have to wade through piles of irrelevant and ignorant stuff about "neoliberalism" before you get anywhere. Can we discard all that and start at "I’m talking about the development of what could be called the Natural Capital Agenda"? That appears to be the bit you're interested in.

    The first problem is that this is a term he's just invented. If I google it, there's a respectable hit at but I don't think that's what he wants to attack. So the first problem I see is taht Monbiot is attacking something he has defined and named; this to me strongly resembles the way "skeptics" attack "CAGW". And no, I don't trust him to define his opponents agendas accurately; see the neoliberal gunk at the start of his article.

    His arguments:

    1. They are trying to compare things which cannot be directly compared. This is a reasonable thought, but its not a killer, and it can't be. Taken literally, it amounts to "we won't permit trade-offs on thing X", which just won't fly. I've blogged this, somewhere. Note that Monbiot calls this his most trivial argument, but devotes much space to it. I think this is rhetorical trickery on his part: he knows the argument is weak, so is forced to call it least, but nonetheless wants it to colour your thinking.

    2. "you are effectively pushing the natural world even further into the system that is eating it alive.... What we are talking about is giving the natural world to the City of London, the financial centre, to look after." The second part of that is just silly. Monbiot frequently uses hyperbole in his article; I find that annoying. The result is that its impossible to know which bits to take seriously, and which bits he['d just say "oh no, that was exaggeration-for-effect". The first part is indeed an issue, but he doesn't develope it clearly.

    3. Power. I don't know what he means by this. He uses ETS as an example. ETS is indeed broken, as I've said many a time. But its not a neoliberal solution: that's the carbon tax. The problem that Monbiot appears to be discussing in this section is weak-willed pols. Which is indeed an issue, and he's welcome to attack them, but he isn't welcome to confuse that with neoliberalism; one of the few things he gets correct is that the neolibs aim to minimise pols.

    4. "But the real problem" - see: more rhetorical trickery. You should *start* with the your real point. Anyway, his "the real problem" is that Us and Them don't agree on what to do. And the solution is Mobilisation. That's a generic problem, not specific to this issue.

  2. Can't say I disagree with anything George says there. There are some issues left to question though. In a world where the vastly dominant socio-political measure of value is determined by money/economics, how do you start to demonstrate the importance of incommensurables? By virtue of the definition of what makes something worth something, such things have no measurable value, which means they are either discounted completely or reduced to the relative asset value of the commodifiable components.

    In short, Natural Capital Assessment is worthless except as an arbitrary definer of market potential - the key word here is Capital. It already presumes that nature is another 'resource' to be placed into a market.

    If your world view is dominated by the idea that everything which exists in the world is freely exploitable, then you know the price of everything and the value of nothing.

  3. I never knew I was a right-wing defender of neoliberalism until I started reading people's arguments against it. Two words: baby, bathwater. Boring reality: price mechanisms can sometimes be effective. Sometimes they're not. Some ideological eejuts push it as the answer to everything, true - but they're as wrong as ideological eejuts who say price can never be more than a facet of the Great Neoliberal Project to Destroy the Planet. We're gonna need more pragmatism than that. (i.e. as Ostrom says, way less abstractions, more taking specific cases and seeing what tools work best.)

  4. Firstly, it's not an article, it was a lecture. He touches on many points that he covers in his other articles, see for example this one:

    The Natural Capital agenda is promoted, amongst others, by the Natural Capital Committee. See:


    References to the "natural capital agenda" include (and are not limited to):

    The Dutch government article, though it has laudable aims (as, as he states do the environmentalists he's aiming his arguments at), he does want to attack, as it is using natural capital and ess as its mechanism to achieve its aims.

    More here:

    For a few years now, it has been the next Big Thing and the enabler for "biodiversity offsetting".

    The usual suspects will think the lecture was nonsense, but then that's obviously predictable, and it wasn't aimed at them and most aren't persuadable anyway (which is one of his main points - so they will just be reinforcing it). It was aimed at environmentalists who want to try and use natural capital to persuade people who just don't care about the environment, that they should do for purely financial reasons. His points, are that it's based on nonsense comparisons, that you are pushing much of the control towards financial institutions (as suggested by the report he links), that you are allowing for corruption of the process and that you are working with people who don't care about the environment. The last two don't just apply to natural capitalisation, but as it is being pushed as a way to solve those two issues, he's saying that it won't.

    There's devil in the detail and some of what he says is wayward. As he says, there are some situations where the approach could be seen to have merit. However, it is being pushed as the over-arching framework and so will, in most cases, be pushed into areas where it is wholly inappropriate and will do much more damage than good. I tend to agree with him on this, and agree with Fergus.

  5. William, perhaps this will help a little:
    ''Natural capital refers to the elements of nature that produce value (directly and indirectly) to people, such as the stock of forests, rivers, land, minerals and oceans. It includes the living aspects of nature (such as fish stocks) as well as the non-living aspects (such as minerals and energy resources). Natural capital underpins all other types of capital… and is the foundation on which our economy, society and prosperity is built.''
    - The Natural Capital Committee

    Part of George's problem (and my own) is one of trust. Whilst there may be some good reasons to put a price on nature (for example, to have a baseline for measuring risk relative to damage or loss), It's not difficult to imagine that the ulterior motive is to create natural asset markets - want to save the rainforest? Buy your shares here...
    In dealing with UK planning policy and departments, it is clear that the value of a local woodland, as mentioned in the article, is defined very narrowly, and the management of aforesaid entail generating revenue to both justify and finance its management - thus, a woodland like Grizedale Forest becomes just another bloody theme park. This isn't sustainable conservation, its marketisation as a function of the criteria of evaluation.

  6. And another thing: sample scenario. You want to build a coal-fired power station. You do an Environmental Impact Assessment. Someone comes along and prices up the impact. You pay either a tax or finance an 'in-kind' project, hey presto, your power station is now Officially Environmentally Sustainable...
    I'm not making this up...

  7. I don't really understand your point. You're complaining about the name that the project gets, or what its labelled under? Isn't that too trivial to mention?

    But to pick up your example: with a sensible carbon tax, we wouldn't be building coal fired plants. A carbon tax is the neoliberal agenda Monbiot hates so much.

  8. For a lecture without prior write-up this is quite an awesome piece.

    The "neoliberal agenda Monbiot hates so much" is the quasi-religion of the invisible hand of the unregulated market. (Yes, this pseudo-scientific ideology is indeed inspired by theology, as Adam Smith already stated explicitly. Some U.S. writers expanded on that during the Reagan-Thatcher revolution. This surely is related to the rise of Christian "Fundamentalism" in the U.S. (even while Jesus would puke on the glorification of usury...))

    But markets don't need to be neoliberal. There are many ways markets can be implemented and integrated into diverse forms of economy, from "communism" to "capitalism". (BTW, due to mathematical theorems worked out at the Chinese Academy of Sciences in the 1980ies it is known that the usual economic models (Leontieff+stochastics) inevitably collapse - be it "capitalist" or "communist" economics.) It was already noted by Aristotle that the Athens bread market needs oversight and regulation to work right and be fair. Neoliberalism is a ridicu-lousy oversimplification of things.

    The other abomination Monbiot hates is putting a price on everything:

    All we require now is for the Cabinet Office to give us a price for love and a true value for society and we will have a single figure for the meaning of life.

    He serves an excellent example why that doesn't work in real economy (which is and has always been entangled with economic and military power) - even if a price tag makes some sense:

    People have known for centuries the tremendous benefits that mangrove forests deliver. But has that protected them from being turned into shrimp farms or beach resorts? No, it hasn’t. And the reason it hasn’t is that it might be worth $12,000 to the local impoverished community of fisher folk, but if it’s worth $1,200 to a powerful local politician who wants to turn it into shrimp farms, that counts for far more. Putting a price on the forest doesn’t in any way change that relationship.

    I'm currently reading the excellent and eye-opening Debt: The First 5000 Years. Looks like Monbiot read it, too.

  9. After the ranting about bankers, Monbiot starts strong in my opinion.

    I’m talking about the development of what could be called the Natural Capital Agenda: the pricing, valuation, monetisation, financialisation of nature in the name of saving it.

    Sorry, did I say nature? We don’t call it that any more. It is now called natural capital. Ecological processes are called ecosystem services because, of course, they exist only to serve us. Hills, forests, rivers: these are terribly out-dated terms. They are now called green infrastructure. Biodiversity and habitats? Not at all à la mode my dear. We now call them asset classes in an ecosystems market. I am not making any of this up. These are the names we now give to the natural world.

    This doesn't say that putting a price on carbon is a bad idea. It says that setting the price on carbon exclusively on the basis of what benefits we immediately (more precisely, immediately measured subject to the usual time-discounting) get is not sensible. On this I absolutely agree, and probably for comparable reasons. The fact is that this valuation simply sets a lower bound.

    I agree with the economism advocates that we need objective measures to do effective tradeoffs. I think most anti-economism types may not come along with me on this. They have been burned too often by cost-benefit calculations performed by the people who can afford the better lawyers, and so revile the concept, as opposed to its implementation.

    I disagree in the strongest terms with the economism-ists that the objective measure should be dollars, or euros, or anything commensurable with those things. This is largely but not entirely because the discount rate shortens time horizons. and shortens them all the more the faster our capacities grow. It is also because, as Monbiot points out, there are values that aren't captured at all in financial terms.

    Consider the case of Monsanto vs the monarch butterfly. The value of a monarch butterfly was clearly zero a decade ago when they were ubiquitous and common. (The clear majority of butterflies I have seen in my life have been monarchs.) The market value of all the butterflies was perhaps a trillion times zero. And now, because Monsanto has made the weed on which monarchs breed unviable over the migration range of the species, monarchs are suddenly extremely rare, and in general seeing a butterfly is a far more remarkable event than it was recently in North America.

    I leave it to you to figure out what the economic value of the decreased weediness in maize and soybean plantations are, but I will readily conceded that it is more than zero. Does this justify a continent denuded of its most common butterfly? I think we need to adopt some sort of way of thinking about things wherein it does not.

    Yes, indeed, you may object that I have coined a term "economism"; the problem with "CAGW" arguments is that they are straw man arguments, not that the name is proposed by the opponents of those arguments. There is definitely a position that all tradeoffs should be dollar-denominated. I argue, and since the sic.env days have believed, the somewhat unusual position all tradeoffs should be denominated by some measurable quantity, while anything commensurable with currency is obviously wrong.

    There are two parts to the argument. First, there is the dominant dollar-denominated approach, and the ethics behind opposition to it. Here I completely agree with Monbiot. The argument can not be had in econometric terms precisely because the argument is an ethical argument against econometrics as determining of policy, which I call "economism", and which appears to be a dominant paradigm.

    You may object that Monbiot proposes nothing coherent to replace it. If you do, then on this I agree. I think we need something coherent to replace it, and it's difficult to know what.

    I am not suggesting we replace money as a medium of exchange.

    If that is even possible it will take a very long time. We do seem to need a medium of exchange which is can be aggregated and scaled in order to do our business. I do agree with those who suggest that money is essentially an artifact of governance and not separate from it, so we can and should change what is lucrative and what is penalized. For instance, a carbon tax remains a very good idea. However, the amount of that tax should not be set so as to balance externalities under the usual discount. It should be set so as to eliminate net emissions altogether - that is, as an instrument of deliberate policy, not as an instrument of repairing externalities.

    What economism says implies that money measures everything worth measuring collectively. Since it's apparent that any individual is better off the more money she has, the conclusion is that everybody is better off the more money changes hands. This leads to growth in GDP (Gross Planetary Product, really) as the goal of governance. And here Monbiot's complaint is, if yo9u'll pardon the expression, on the money.

    Because each dollar is ultimately a claim on resources. Under a growth presumption, we lend money into existence; this means that our claims on resources grow exponentially. Whether resources can continue to meet exponentially growing demand is more than a little problematic. Eventually, it would appear, we will reach the limits of this strategy. Whether that time is upon us seems to be the only controversy. But the time constant is short (an e-folding time of a generation or so), so even on the most optimistic of scenarios the time remaining to us is short. What's more, correctly pricing externalities will only slow matters down a little.

    That which is unsustainable will eventually end.

  10. I think it's more a matter of confusion than of influence. Of course, it is the status quo that benefits from the confusion, so this may be more a matter of emphasis than a difference of opinion.

    It is clear that rapacity is built into our system and those most successful at it like it that way.

    It is unclear what we have to replace it. So mobilization makes no sense to me - mobilization to what end?

    I agree with William that Monbiot starts stronger than he ends. My wild hope is to join or nucleate some conversation that would come to some well-thought-out alternative. For now, it may be useful to focus on why what we have is not going to work very well. I think Monbiot makes a good case for that.

    Dieter Helm, the Chairman of the Natural Capital Committee, said the following in the same report I quoted from just a moment ago. “The environment is part of the economy and needs to be properly integrated into it so that growth opportunities will not be missed.”(9)

    There, ladies and gentlemen, you have what seems to me the Government’s real agenda. This is not to protect the natural world from the depredations of the economy. It is to harness the natural world to the economic growth that has been destroying it. All the things which have been so damaging to the living planet are now being sold to us as its salvation; commodification, economic growth, financialisation, abstraction. Now, we are told, these devastating processes will protect it.

    The problem is the mechanism of weighing behaviors itself; changing the weights can help but it can't resolve the issue. We have no way of steering toward the future except our addiction to exponential growth, which cannot in the long run resolve how we attain to a system whose impact does not grow at all.

  11. My point relates to the one about trust - there are a lot of examples of government using vehicles with one apparent purpose to serve another, or to change the goalposts when it chooses, EG: we would be a long way further behind our EC emissions targets if the Govt. hadn't decided one day to redefine gas power stations as 'green energy' on the ground that they emit less CO2 than traditional coal-fired ones. As Monbiot points out with his example, it is very hard to give like-for-like value in tearing down one natural asset and replacing it with a new one somewhere else, so development/building/growth won't be hampered unduly.

    I'm with Monbiot on aggressively opposing neoliberalism, on the grounds that its core ethical assumptions are both contradictory and profoundly unethical (in my eyes). As mentioned below, though, this sort of mechanism for carbon emissions management is not neoliberal - they hate taxation.

    Id we had a plausible, practical and consistent energy policy we wouldn't need coal power for much longer. If we didn't subsidise the ROI for the private finance investment vehicles, then, soon enough, none would get built.

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  13. Nope, you're letting your hippie bashing get away from you. Issues of trust are not the same as wanting to be in charge; rather trust often implies that power has little to do with it.
    And besides, if the folks in charge really are untrustworthy, as I believe the last century or so of planning applications and destructions indicate, then he's got a point, hasn't he?

  14. Thanks!

    Rather tangentially, about that Dow facility:

    If you take the back roads from Austin to Galveston, you drive right by it on an obscure and otherwise unimpressive two-lane. New in Texas at the time, Irene and I were taken by surprise by it. Irene took a remarkable picture of it from a rail overpass, and I ruminated on the plant's presence so close to sea level, here.

    It turns out I have a college friend who works as a chemical engineer there, but he doesn't tell me very much about what goes on at the facility, and pointedly said he would not be able to give me a tour.

  15. From Nosmo's link:

    Dow and Coca-Cola and Rio Tinto, to name three Nature Conservancy partners, are motivated not by public spirit but by a survival instinct. If business goals overlap with ecological impulses, so much the better, but if they don’t, most companies will continue on a polluting path.

    Green is good, but if a company is responding to customer demand that it be more "green", greenwash is often more cost-effective. Why internalize more of your external costs than you must to stay competitive?

    This leaves little room for conservationists to operate. Recently, Tercek wrote an editorial on climate change for the Conservancy’s magazine. He considered it “pretty banal, hardly radical,” but some of his red-state trustees were unhappy and requested a meeting. “My guess is some of the trustees will be so uncomfortable they’ll leave,” Tercek said.

    The Nature Conservancy is on a slippery slope. Will they turn down corporate donations rather than sell greenwash? Until they do, I'll donate my money to organizations that aren't afraid to speak truth to power.

  16. Frankly, I don't have time to read through all the comments (finals week, board meeting, etc.) so someone may have already read and someone else may have debunked, but I did read the article and feel compelled to chime in.

    What we're really discussing is incentives. We need behaviors to change, people tend strongly to act on incentives, what will incentivize them to act in a certain way? That way may be flying less, voting in a certain way, moving closer to where they work, giving up eating meat, etc.

    In order to understand that, we have to understand how people value things. Money is one way of doing so but, as I tell my wife when I transfer money into her account, when I do so I'm really giving her time. It takes me time to earn that money and I have a finite supply of time. I value her satisfaction enough to devote that amount of time to it rather than to something else. So it's fundamentally a case of understanding what of value people will give up in return for some other thing of value. Many of those things have financial prices attached to them, but some do not.

    If my daughter is graduating from high school in May but my brother is undergoing a necessary, life-saving operation that day, which do I attend? It's a matter of which I will give up for the other. What will I give up in order to, for example, have my haunts in the Mojave Desert not be turned into a vast photovoltaic array? Well, I love the desert for the aesthetic reasons that Monbiot is discussing. On the other hand, I love the idea of moving from complete dependence on fossil fuels. What do I support?

    As I've frequently blogged about, I get 52 m.p.g. in my car, mostly by driving at 55 m.p.h. in cruise control (and having a vehicle that's very expensive by any performance or luxury based evaluation). And yet I estimate that I spend 40 hours in the car that I could otherwise spend elsewhere. And my Company values my time at FAR more than the price of the gasoline I save driving in this way, and I could use the time for family, homework and study, blogging and reading blogs, etc. So I might value my obsession with m.p.g. in terms of dollars or hours. Each would yield a different equation of state. And, of course, an hour of my time is valued here at far more than an hour of Burmese subsistence farmer. Further, sadly, I'm likely to have more hours in my finite pool.

    If anyone (or Monbiot) can determine another way to objectively measure how people value things then, perhaps, an incentive system not dependent on fungible financial assets can be implemented. But, as it stands now, financial assets are pretty much the only objective measuring stick that has wide applicability. And there's no question that financial considerations are capable of providing very strong incentives. Monbiot's values based considerations are going to have a very difficult time translating into incentives on the basis of understanding what people will give up to implement the political and social behaviors he prefers.

    I realize this isn't particularly well thought out, but I value an A in my current course more than I do refining and crystallizing the argument.

  17. Rating Monbiot's arguments:

    1. Comparing things that are incommensurable. Yes, and this is an unavoidable problem in economics. For example, and this applies here and in the food security thread, even for things that can be reasonably measured in dollars, dollars don't provide a sound way of comparing value across people. Economists often try anyway but the theoretical problems especially in an unequal economy are known and not really in dispute:

    But you can't really get around comparing the incommensurable. If you have to make a decision between incommensurable things, you have to compare them. You don't necessarily need to do so in dollar terms; being more concrete about what we are trading may be a preferable approach.

    2. Maybe, though I don't find this one so convincing.

    3. This is a good point. The issue is going to be how do we get the political system to do enough, not how do we get it to adopt the right approach. This is a reason why I favor a multi-faceted approach and prefer not bashing any particular approach including price-based approaches, but especially not the most popular approaches, which are the regulatory and direct investment based approaches. Approaches that put the solutions front and center are easier to sell to most people, but economists prefer approaches that make the costs explicit while leaving the solutions as a blank to be filled in by the market.

    4. The general thrust may be right but his particular point about values seems off in a few ways. First of all I basically agree with this: The gulf in values is not as wide especially on the environmental side; the denial movement is if anything evidence that people are not comfortable with the idea that they are acting in ways inconsistent with leaving a world as good as they found it to their children.

    Second of all, if you were searching for a way to make environmentalism more palatable to your typical US conservative, you could not do worse than neoliberalism. Carbon taxes or tradable permits are the most appealing ideas to conservative economists, but for typical voters they are the very least appealing options, especially among conservatives. Most conservatives are much more anti-tax than they are anti-regulation, and while they have a learned aversion to the word "regulation" they do like rules. While conservatives generally see less urgency in addressing climate change, if you ask them to rank the various options to address it the only difference between liberals and conservatives is that conservatives are more fond of nuclear power.

    The problem with the neoliberal approach isn't that it appeals to the wrong values, it's that it makes a fetish of hiding as much as possible the values behind the decision. This doesn't help push for solutions; it just makes the environmental movement look like it doesn't truly possess moral values and is mainly after your pocketbook. Would anyone in their right mind ever say "Murder is morally wrong, so we should tax it highly so that only the most economically valuable instances are committed."? Of course not. There may be practical reasons to handle global warming this way anyway, but it puts us in the awkward position of talking about this issue like it's not a moral values issue.

  18. I've just read Frank Ackerman's "Can We Afford the Future", a nice basic summary of economic treatments of climate (published 2009), perhaps too easy and accessible for the more sophisticated, and came away with a very poor impression of attempts to shove reality into formulas. Yes, I know, it's the way things are done, and not entirely wrong.

    However, I got a rousing agreement from PW today on my conclusion that the cheapest way to address climate is as soon as possible. It certainly gets more expensive the longer we wait. The fog of formulas seems to me to hide this self-evident fact. I know there's that vexing question, how, but burking the question of necessity with endless justifications for inaction seems immoral to me.

    I know my way of putting it is simple-minded and I go more by intuition (gulp) and common sense than careful logical steps.

    Climate weirding, arising from an increase of energy in the system, is on the increase. Dealing with the kind of emergencies that have been becoming more frequent (including a significant rise in lesser extremes, not the huge headliners such as tornadoes and hurricanes) as they occur is very expensive. This is what we are storing up for ourselves with each day and year of procrastination. There are a variety of things we could be doing right away. Symptomatic relief and after the fact rescue on a global scale is a recipe for real trouble, accelerating over time. In addition, it is likely to cause ever increasing global unrest.
    One more thing. There are a wide variety of things that can be done. Insisting on a perfect across-the-board solution can be used as yet another excuse for inaction. I agree that we need to be inclusive. God forbid we get that sulfur spray shield instead once people get in a hurry for short term relief, storing up yet more future trouble.

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