At first glance, natural capital accounting appears to be a valid step for businesses in the movement toward a more sustainable future, as it’s said to help those businesses gain a better understanding of their environmental impacts, by normalizing them into a monetary unit, which can be measured and tracked.
However, according to Food & Water Watch Europe, natural capital accounting is not the solution that it seems to be, and is “plagued with myriad problems.”
“Governments should not be fooled into thinking that natural capital accounting is a silver bullet to all their environmental and economic problems. Natural capital accounting extends the domain of economic activity and seeks to create economic values where none exist. But, natural capital accounting is really just a desperate attempt to fix a flailing economic model and not an attempt to better manage our fragile environment. Not only does it have serious consequences for the governance of nature and important democratic processes, it is shifting the management of nature into the hands of the same economic actors who are destroying it.” – Wenonah Hauter, Executive Director of Food & Water Europe
One big problem with assigning a pecuniary value to natural resources, and thereby commodifying nature, is that it will eventually transfer environmental protection away from the public and toward private interests.
“Even though the concept of natural capital accounting has been developed and promoted as a policy solution, it is little more than a theory which cannot become reality. The process of converting nature into natural capital and then incorporating it into national accounts and the economy is entirely counterproductive to better environmental management and sustainability.
Many problems exist, from inaccurate information and inaccurate valuation, to the significant loss of values from converting nature into monetary terms. If it actually were possible for natural capital accounting to occur in reality, the subsequent process of commodification required to incorporate nature into the economy creates several more problems. From the idea that ecosystems can be separated into individual products and commodities, to the fact that nature would have to be privatised and property rights would need to be granted in order to become commodities, natural capital accounting in fact becomes a front for the financialisation, privatisation and marketisation of nature.” – Food & Water Europe
For an in-depth look at the issues that Food & Water Europe brings up about natural capital accounting, read or download the full report here: No Accounting for Taste: Natural Capital Accounting and the Financialisation of Nature