At this week’s World Economic Forum, the food-energy-water nexus will be a common theme running through many conversations, and that is a good thing. Water, food and energy security are chronic impediments to economic growth and social stability. But now we need to take the next step, and look at what underlies that nexus.
The answer is natural capital.
People have typically valued nature either sentimentally, or else as raw materials whose value is based on their extraction costs and ultimate market price, with the assumption that they would be available forever. Now, everyone from farmers and fishermen to bankers and financiers are waking up to two vital facts. First, we are dependent upon nature far more and in far more complex ways than we knew. And second, natural capital –– the stock that yields a flow of services like flood control, and resources like a healthy, regenerating fish population––is not inexhaustible.
We need a more sophisticated and nuanced calculation, one based on sound financial principles from the private sector and a deeper appreciation for how nature’s resources and services contribute to economic and ecological well-being. Leaving natural capital out of the equation imperils both ecosystems and the economies built upon them.
Given this new reality, we should not be surprised that the innovative thinking in conservation is coming from unlikely corners. Successful businesses, livable cities, and thriving wildlands all rest on the same living foundation: nature.
Consider flood plains, for example, and their relation to food, energy, water, and economic risk. Before levees, floods spread fertile silt across the floodplain, while wetlands removed impurities from the water. With levees, silt stays in the river, eventually clogging hydropower turbines. Crops on the floodplain require more fertilizer, water quality worsens downriver, and the risk of catastrophic floods rises as more and more levees are built and pressure on the whole system rises.
Far better, in the words of one farmer from Iowa –– a community not often considered environmentalists –– to “let floodplains be floodplains again.” Working with nature is more effective, less expensive, and offers more potential benefits than business as usual.
For too long environmental issues have been seen as separate from everyday concerns, but they are intertwined in everything we do. They intersect in places like Iowa when floods underscore the true value of functioning floodplains. They intersect for ranchers in the Northern Great Plains when they see that conservation and ranching can coexist and even thrive, for nomadic herders in the the Gobi Desert working with huge mining companies, for cocoa growers on West African plantations.
The challenges and opportunities revealed in the simple idea of letting floodplains be floodplains extend beyond any single river basin or country. But working at the scale necessary to effect real change is impossible if we approach it farmer by farmer, no matter how innovative and forward-looking they may be. The real impact of rethinking the value of nature and incorporating that new thinking into investment, development, and policy decisions will come as entire industries see the necessity, from a business perspective, of viewing nature in a fundamentally different light.
I look forward to our discussions in Davos this week, where those decision makers and industry leaders will come together to find common solutions to ensure that nature can continue to provide the food, clean water, energy and other services our growing population depends upon for survival.
Mark Tercek is president and CEO of The Nature Conservancy, the world’s leading conservation organization working around the world to save the lands and waters that sustain all life. He and Jonathan Adams, who co-authored this blog, are currently working on a book on natural capital.