“Putting a price on nature opens the door to its financialisation, not its protection”

An excellent podcast by African Futures Lab, featuring international human rights lawyer Meghna Abraham.

In September 2024, Ursula von der Leyen, president of the European Commission, announced that the EU needed to create new financial tools to address the biodiversity and climate crises.

“Works is already ongoing at the United Nations and in the European Commission, to define a global standard for nature credits,” von der Leyen said. “Because these have to be true nature credits, and no greenwashing.”

She had also talked about “nature credits” in December 2023, at COP28 in Dubai. “Zambia and Kenya, for example, have vast forests,” she said. “They deserve to be rewarded for keeping them alive. That is of utmost importance. Here too, credits – let us call them nature credits – can play an important role.”

In October 2024, REDD-Monitor wrote about von der Leyen’s comments about “new financial tools” and “nature credits”. In particular, I was concerned about von der Leyen’s comparison of nature credits with the EU Emissions Trading System, which she claimed was “an incredibly effective market for carbon”.

Von der Leyen seems oblivious to the serious problems with the ETS, including the price swings, the massive oversupply of pollution allowances, the collapse of Clean Development Mechanism credits, the Big Polluters that cashed in on the ETS, or the massive fraud that has taken place.

I recently listened to a podcast by the African Futures Lab featuring international human rights lawyer Meghna Abraham. She’s on the advisory council of the Bonavero Institute of Human Rights at Oxford University. She was formerly the Executive Director of the Center for Economic and Social Rights and before that worked at Amnesty International for more than a decade.

The podcast is titled, “Reparations for climate and biodiversity loss” and the whole conversation is well worth listening to. In the podcast, Abraham says, “Putting a price on nature opens the door to its financialisation, not its protection.”

As Abraham notes,

“Framing nature as ‘natural capital’ paves the way for its financialization, turning forests, wetlands, and rivers into tradable assets on global markets. Financialization doesn't stop harm — it launders it.”

I think Abraham’s response to the following question about justice and market-based solutions is worth a closer look — lightly edited here for clarity:

African Futures Lab: When you look at the words that Ursula von der Leyen was using, it was almost about justice. But the solution was more like a market-based solution. So how do we make sure that we bring this dimension of justice, but at the same time, the solutions that we bring or we think are the right ones are not diverted from their purpose?

Meghna Abraham: Part of the challenge that at least that I’m encountering when I’m looking at this is that of course we have a lot of cases being brought against extractive companies for the harm that they are causing. I don’t think many of them, however, are going deep enough into the biodiversity loss aspect.

There is an interesting exception to that. There’s actually a case that's recently been filed in Brazil against people responsible for deforestation, which is raising exactly these kinds of issues. So it’s going to be very exciting to see how that progresses.

But largely, it’s not done.

First, I think it’s partly because the framework that we have on conservation is not oriented towards capturing these kinds of larger harms. If you look at a lot of the conservation laws that exist, which unfortunately originate from a fortress conservation model, they are very often going after that poacher, the sort of individual who has engaged in wildlife crimes or other kinds of behaviour.

I'm not saying it’s not important that that is addressed.

But it is not really designed to go after the companies who are benefiting from large-scale patterns of extraction of particular resources. That kind of conduct is unfortunately often agreed with the government. But the responsibility for the harms caused have not been properly captured or addressed in domestic laws. I would say that’s a tentative view that I have on that particular issue.

And I think there’s a lot more work that could be done in that space to be capturing that and to be going for the larger actors who are benefiting from biodiversity loss instead of staying at the level of the individuals.

Second, on justice, I think this is really the key issue on the table. Maybe we need to get into what is being proposed there by the president of the European Union. There is a notion that is being really brought about now, which is called natural capital, the natural capital approach. It is based on an idea roughly that if we put an economic value on nature, it will make it easier to protect it.

So we stay in a sort of market-based logic: if we put a value on nature, it makes it possible then to see nature not as limitless, which has been part of the problem. And you say to companies and others and all other actors, well, actually, this is the value of nature. Whatever you are harming has to be factored into decision making and managed.

I do understand some activists, some leading thinkers in this space, support this view. It is tempting, because it feels like we’re filling a gap.

But overall I think there is a massive challenge with it because it is trying to put nature in this economic model. Which, yes, could be helpful partly when we’re talking about compensation. Unfortunately, it has really more opened up the door to financialisation of nature.

So instead of saying, “Actually, here’s the value of nature and it’s so high that it shouldn’t be touched.” Which is the value, the worldview of, say, an Indigenous group who says this is so intrinsic to our survival, you can’t put a value on it.

You can’t say this is the dollar value of this mountain to me, because it is integral to my identity.

We do get to the dollar value and that has opened the door to offsetting. That’s exactly what von der Leyen is talking about. Which with biodiversity, it’s called no net loss.

If I harm as an agribusiness, let’s say, I’m harming a forest in Nigeria, but I will make up for that by trying to support an activity which will protect biodiversity in the Congo. In overall net, we don’t have a loss. That is the concept.

And all the more so in terms of what von der Leyen is talking about. A farmer in Europe, you know, there’s some kind of harm caused there, but they can offset that behaviour by supporting protection of biodiversity elsewhere.

There are many obvious problems with this. First of all, it’s based on, frankly, quite dodgy science.

There isn’t a scientific basis to back this up. Essentially there’s an idea of, say, protecting key forest in the Congo and making sure it’s not going to be cut. And then there’s a value put to the carbon savings we have from that, essentially.

Is that actually additional? That’s the first question. I think actually the value of that sort of forest may have already been factored in to the models that exist in terms of looking at emissions. And it’s even more complex when we move away from carbon to the biodiversity value of that forest, what it means for that particular ecosystem.

Then, how do we ensure there’s no leakage? Basically where the negative impacts are just being transferred elsewhere.

And is it permanent? How do you measure it and quantify it? There are a lot of concerns about the science.

There are also a lot of concerns about the model itself, which is extremely financialised. A lot of people are making money off this. That’s the idea behind it. That’s going to help apparently fund biodiversity.

But at a deeper level it is a replica of that old colonial model where we are saying essentially people in the Global North can continue, or large companies can continue to consume, can continue to harm the environment and that will be balanced out by actually locking up land largely in the Global South.

Which per se is problematic.

Why should people in the Global South have to do things which make up for consumption in the Global North? This, of course, also involves lots of risks for communities who rely on that land. None of this land is pristine, virgin land that’s sitting somewhere. We know that communities all over the world rely on that land, even if that nature and that relationship is not legally recognised.

So what we’re seeing now are the risks of people being displaced off the land with a lot of projects being brought in. There’s a lot of evidence on this from work that’s been done by GRAIN, by the Centre for Research on Multinational Research, many others.

GRAIN has done an excellent report recently looking at all the offsets that are registered in different databases and showing how much land, particularly in Africa, is being brought under these projects and showing the concerns of many of these offsetting projects.

I think fundamentally, we have to decide. And this is where I think the reparations approach comes in.

Yes, there’s definitely a need to be investing more in protection of nature, but should it be contingent on an offset? Where you say the only way we can protect this nature is if there is going to be a trade-off for allowing certain harmful behaviour to continue. I think that is the bigger problem that needs to be questioned.

From a justice perspective, it’s the exact opposite of what we’d like to achieve. Because, in fact, many of the companies who have caused the original harms are now going to benefit from these offsetting schemes with very little responsibility or change, just paying a little bit of money somewhere.

Actually there are a lot of people making money — it’s not just a little bit of money, there's a lot of money on the table — but technically that’s the proposition.