Hiring Mother Earth To Do Her Thing
(Page 2 of 3)
September-October 2008
by E.B. Boyd, from Whole Life Times
New York City, for example, decided to invest in maintaining the Catskill Mountains watershed because using it to filter drinking water was at least 80 percent cheaper than building a new water plant. When authorities in Seattle’s King County were short of funds to repair levee systems, they created a plan to restore floodplains and let nature do the work. Wal-Mart and Japanese car manufacturers that ship goods through the Panama Canal are being encouraged to fund a project to pay neighboring landowners to restore and maintain forests on their lands. The forests would reduce soil erosion and silt buildup in the canal, which in turn will cut the insurance premiums the corporations pay to protect their barges against business delays caused when the canal closes for dredging.
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In each of these arrangements, the customer benefits by getting a specific service out of nature. Conservationists are benefiting by getting what they have been seeking all along: restored habitats and a reversal of environmental degradation.
Along with the excitement about the new paradigm is a growing sense of urgency driven by the realization that some services provided by nature might not be around much longer. For some of these processes, like flood protection, waste management, or pollution abatement, the alternative will be expensive human-made solutions. For others, like carbon sequestration, there is no meaningful technological alternative. In 2005 the United Nations made an alarming pronouncement: Because 60 percent of the services provided by nature are being degraded faster than they can be replaced, the “ability of the planet’s ecosystems to sustain future generations can no longer be taken for granted.”
As a result, public policy leaders are now considering and in some cases implementing new rules. From that regulatory environment, innovative business practices have arisen, principally in the form of credit schemes (the most well known and mature of these being carbon credits). Businesses or government authorities that can’t meet the new standards “outsource” their compliance by buying credits from others.
Though seemingly promising, credit schemes, also known as environmental markets, are still in their infancy. “It’s still very much the vanguard companies that are willing to take a small risk,” says Emma Stewart, director of environmental research and development at Business for Social Responsibility, a nonprofit business association that advises members on socially responsible solutions. Before environmental marketplaces become more commonplace, basic market mechanisms will have to be created: easy ways for credit buyers and sellers to find each other; enforcement mechanisms to ensure that conservation is being delivered; common ways of measuring units of damage and conservation; and efficient pricing systems.