TEM Stories: The profits of putting a price on nature
Everything can be measured in terms of financial value. Including the trees in your yard.
Imagine a farmer earning an income for improving the quality of their soil, without the use of chemical pesticides or fertilisers. Imagine your local community could earn an income for cleaning up the coastline to allow the local mangroves to flourish. The wonderful thing is that measuring the financial value of ecosystem services does not require imagination. It already exists in the world of environmental economics. One critical pathway for the emergence of environmental economics is the carbon market. A quickly evolving, albeit not new, world of green economies where there is a financial value placed on reducing pollution.
I spent two weeks on the Malaysian side of Borneo once. An island in Southeast Asia’s Malay Archipelago, world renowned for its dense ancient rainforests, thriving wildlife diversity and home to the closest living ancestor of humans – orangutans. The trip formed part of the last senior course in my Zoology degree and I was there to monitor the abundance of micro-bats.
When we arrived, my 10 student colleagues and I hopped into a minibus and were driven 3 hours across the varied Borneo landscape, our destination a remote research facility deep in the rainforest of the Danum Valley. Along the way the buildings and densely populated shanty towns of the main city Kota Kinabalu morphed into sub-tropical tree-lined landscapes and then slowly into rainforest. After a while, the surrounding view shifted as the tall trees dropped away. At one point I noticed that instead of lush rainforest trees we were surrounded by bright green rolling hills that were shaved bare in some parts and dominated by low, spikey shrub-like palms as far as the eye could see.
Our guide, the Danum Valley lead researcher stopped the minibus. He said he wanted to talk to us about the landscape.
“What you can see here is palm oil plantations. These are privately owned lands and the demand for global palm oil has skyrocketed over recent years which is having a devastating effect on old-growth rainforests across Borneo”.
He explained that a Bornean farmer could earn significantly more income by cutting down the trees on his small block and planting palm oil plants instead. His next words struck me and I have never forgotten them:
“How can you ask a farmer with 5 small children to feed, and barely enough money to survive, not to cut down the rainforest on his block of land and triple his income?”
Indeed, how could we ask a farmer to value the role of rainforests to the rest of the world? This was the first time I understood completely, the impact of consumerism. Every time a person grabs a product from a supermarket shelf with palm oil in the list of ingredients it triggers a chain reaction of events along an invisible supply chain all the way back to that small scale local farmer in Borneo, who then produces and sells more palm oil to have that one product on the shelf replaced. A chain reaction known as supply, fuelled by demand.
We as consumers have an enormous impact, much greater than many people realise. Thankfully on the issue of unsustainable palm oil, there is now far reaching awareness about the impact of palm oil on rainforest communities and many brands proudly promote “palm oil free” or “sustainable palm oil”. But that sort of change through supply chains, by consumers and businesses takes time. What cause of events lead to a more sustainable palm oil industry? The answer is market demand and company action. Over time it all makes a difference.
Imagine now that instead of that farmer having to tear down his rainforest trees and grow palm oil to sell to Western companies and make his family money – that he could be paid by other Western companies to NOT cut down his vital patch of rainforest. The farmer would earn an income to protect and conserve that patch so that it continues to provide precious oxygen, absorb carbon dioxide pollution from the air meanwhile preserving the habitat of endemic birds, amphibians, reptiles, and micro-bats found nowhere else in the world but his special part of Borneo.
Palm oil is a perfect example of the impact of consumer and investor demand. The demand now, is to know what companies are doing to reduce the impacts of climate change. Offsetting emissions is a critical pathway for emerging green economies, that compete with other unsustainable economies such as the rise of palm oil. Companies that offset their greenhouse gas emissions contribute in 2 ways – they reduce their measurable carbon footprint and support the development of alternative marketplaces that generate credible income for communities, while supporting or enhancing the environment – immediately.
Let’s be frank, engineering solutions, strategies and plans to reduce emissions by traditional means take time. Businesses that are serious about acting, about understanding their impact in today’s terms, work in the price of pollution now and do not wait. Offsetting allows a business to realise the cost of operating in a low carbon future, today. Additionally, it contributes to the evolution of fair and equitable green economies that are required for a sustainable global society. Once upon a time, offsetting was considered the last resort to manage “unavoidable” emissions for a business. But in today’s world, ALL business-related environmental emissions are unavoidable, until they aren’t.
Perhaps in time to come, final year zoology students visiting Borneo for a once-in-a-lifetime zoology expedition might have their research guide stop the minibus and say;
“What you see here are rainforest communities that are protected in perpetuity. The landowners in these parts earn an income by conserving forests and the wildlife that exist here because Western companies invest to reduce carbon dioxide from the air. The demand for carbon offsetting has increased significantly this decade to prevent a global climate crisis, which has had an incredible effect on rainforest preservation.”