Accounting for biodiversity loss
NEW MARKET-BASED APPROACHES TO PROTECTING AND RESTORING BIODIVERSITY
Natural Asset Companies (NACs), a new type of corporation have been established by the Intrinsic Exchange Group in partnership with the New York Stock Exchange to catalyse private sector action in this sphere. 82 The primary purpose of NACs is to maximise the production of ecosystem services. NACs are expected to be listed and traded on the exchange and work to provide funding for the protection of the natural assets they represent and ecosystem services these assets provide. 83 Their introduction signals a significant shift in how the mainstream economy perceives nature and its services. Rather than nature as an asset to be exploited with negative externalities borne by nature itself, NACs put value on what was once received as free-of-charge benefits and have the potential to move finance from exploitation to preservation and stewardship.
In recent years, governments have trialled payment for ecosystem services (PES) to finance conservation and restoration of nature. Under PES programmes, the beneficiaries of ecosystem services pay to conserve and restore those ecosystems. 79 For example, under the Communal Areas Management Programme for Indigenous Resources in Zimbabwe, the state awards inhabitants of a savannah ecosystem the right to charge for the services it provides to safari tourists. 80 Under the Ganga Action Plan in India, the state pays restoration costs for the benefit of citizens to clean the water in the river to a “bathing standard”. 81
82 Be Invested, Intrinsic Exchange Group. 83 Ibid.
79 The Economics of Biodiversity: The Dasgupta Review, HMTreasury, February 2021. 80 Ibid. 81 Ibid.
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