While some of us have been focussed on getting Canadian municipalities to bring natural areas under their jurisdiction into their asset management systems, the Americans have been making some notable and significant strides in advancing natural asset or natural capital management in the private sector.
On September 22, 2021, the New York Stock Exchange launched a new asset class and an accompanying vehicle called a natural asset company (NAC) that allows specialized corporations to hold the rights to selected ecosystem services produced on a given piece of land. While some considered this latest move as a new mechanism to continue to profit from nature and advance the land grabs by the wealthy already under way (e.g., Wall Street’s Takeover of Nature Advances with Launch of New Asset Class), the verdict is still out on what this will really mean. After all, if natural resources have been unsustainably extracted for well over a century under the current financial system that has ignored them as an asset, will this change mean more of the same but in ways not previously sanctioned? Or could NACs become a vehicle for recognizing the value of intact ecosystems and for investing to keep them that way?
On April 22, 2022 (yes, Earth Day) the President elect issued Executive Order 14072 called Strengthening the Nation’s Forests, Communities, and Local Economies and was comprised of the following four sections, including specific mention of nature-based solutions in the fourth:
- Policy (related to strengthening America’s forests)
- Restoring and Conserving the Nation’s Forests, Including Mature and Old-Growth Forests
- Stopping International Deforestation, and
- Deploying Nature-Based Solutions to Tackle Climate Change and Enhance Resilience.
On August 18, 2022 the White House released a Draft National Strategy to Reflect Natural Assets on America’s Balance Sheet for public comment. This paper lays out a framework for – literally – accounting for natural assets in the United States, and including these assets in the measure of the country’s economic strength. This paper recommends, among other things, that:
- The natural capital accounts should be integrated into the broader existing U.S. economic statistical system, using the expertise that Federal agencies already possess, so that these accounts can be as useful as possible to decision-makers at the Federal, State, Tribal, and local levels, as well as to the private sector—which has repeatedly called for government leadership in developing these statistics.
- The natural capital accounts and environmental-economic statistics should measure our progress over time.
- In developing these accounts and statistics, we should work with the international community to advance implementation.
It also speaks to this being a transparent and coordinated strategy that:
- builds on existing international standards,
- can accommodate different uses and perspectives on value, and
- applies “rigorous and established economic science for monetizing the value of natural assets”.
While I don’t claim to understand economic science well enough to critique the NACs or the White House’s Draft National Strategy to Develop Statistics for Environmental Economic Decisions, I do recognize these as important developments in the field of natural asset management which Canadians cannot afford to ignore.