How much is one living blue whale worth in the fight against climate change? A lot more than you may think, says financial economist Ralph Chami. He explains the value of bringing the language of dollars and cents to conservation—and offers his vision of a new economy that would profit off regenerating nature, not extracting from it.
We develop a framework for natural resource valuation that directly addresses the fundamental collective action problem in environmental protection. Our framework uses the lessons of behavioral economics to create values that individual decision makers find credible and relatable, in addition to stimulating excitement or concern that is essential to prompting action. We then apply this framework to value forest elephants in Africa and great whales that are found off the coasts of Brazil and Chile. The values we estimate for individual members of these species are significant: $1.75 million per forest elephant and an average of $2 million per whale. We discuss how our valuations lead to new designs for environmental preservation and restoration policies.
Incorporating the carbon services of wild animals into financial markets has the potential to benefit both climate
and conservation through the development of carbon offsets that are equitable and nature positive. However, for this paradigm to be successful, many challenges regarding science, finance and law still need to be overcome.
The involvement of financial markets is critical to deliver effective and long-lasting solutions to mitigate climate change and reverse biodiversity loss. However, financial markets have not invested in ecosystem services because these are often valued based on non-market prices, which deter investments.
Humanity faces a dual threat to its existence: climate change and biodiversity loss. The two risks are linked through human activity and an economic system that promotes growth at the expense of nature. Creating a nature-based economy can mitigate the dual risks and bring sustained, shared prosperity. The article shows how markets can be developed around the protection and regeneration of nature.
This paper sets out challenges and opportunities associated with the surge in monetarisation of nature across the global economy. It establishes a baseline of where we are in the evolution of nature markets and areas that need to be addressed in ensuring that nature markets deliver equitable, nature positive outcomes. The paper does not set out recommendations or conclusions, as this work is only now due to begin.
Humanity stands at a crossroad, faced with the dual threats of climate change and species-biodiversity loss. The very foundation upon which our lives depend is at risk, yet our actions—our lifestyles and economic activities—do not yet align with this stark and quickly approaching calamity. COVID-19 exposed what scientists have been saying for many decades—that humanity’s economic and social wellbeing are inextricably bound to nature.
In this paper, we discuss Blue Carbon resources in coastal, open-ocean and deep-sea ecosystems and highlight the benefits of measures such as restoration and creation as well as conservation and protection in helping to unleash their potential for mitigating climate change risks. We also highlight the challenges—such as valuation and governance—to marshaling their mitigation role and discuss the need for policy action for natural capital market development, and for global coordination.
Ralph Chami was not an environmental economist. He was a financial economist. But a bucket list trip to see blue whales changed that. Ralph joins us on episode 134 of Bigger Than Us to tell the story of how he ended up calculating the value of whales and their carbon sequestration. His work on whales has given long-needed proof to scientists who have long been concerned about the shrinking whale population.
African forest elephants fight climate change by contributing in surprising ways to natural carbon capture.
