Exploring Restoration with WaterLANDS Episode 2

Risks of Nature Commodification

Julia Martin-Ortega and Joshua Cohen

University of Leeds

Episode Transcript

00:00 - Introduction

Hello and welcome to Exploring Restoration with WaterLANDS, a podcast diving into the drivers, challenges and solutions to restoring our ecosystems as seen through the lens of WaterLANDS – an ambitious Horizon 2020 Green Deal project aimed at learning how we can apply holistic wetland restoration at a landscape scale.

In this series, we will talk to the people at the heart of creating and delivering on-the-ground wetland restoration in Europe, and the research and science supporting this work. Throughout the series, we will be delving into the ecology, governance, policies and financing of successful wetland restoration, and the crucial role of community in the arts in empowering people to instigate better change for our future.

Though, the discourse around climate can be bleak, it is up to all of us to change the narrative and focus on what we can do now. Now that the European Union's historic Nature Restoration Law has been passed, it is time to be proactive.

Through this series, we aim to give you a valuable insight into what is being done and what we can do going forward, so that you too can be part of it. Let's get started.

01:42 – Laoise

We're here this week in Leeds with the WaterLANDS General Assembly. So, partners from all over Europe have come together here for the week to talk about the projects and the different aspects of wetland restoration that are going on.

01:53 – Sadhbh

Today we're joined by Julia Martin-Ortega and Josh Cohen, who are both researchers with the University of Leeds and are working on different areas of WaterLANDS. So, on the community engagement piece, the financing aspect, and also directly on the UK restoration Action Site.

02:08 – Laoise

Today, we're going to be speaking with Julia and Josh about green finance and the risks of commodifying nature. But before we delve into that, I was wondering if you could just start by telling us a bit about you, about your broad area of work, and then how you got into restoration of peatlands and wetlands and everything.

02:26 – Julia Martin-Ortega

Great. Thank you very much. We’re very happy to be here with you today and to host you in Leeds. I am a professor of ecological economics, now this is a branch of economics in which we actually pretty much question and put under scrutiny the mainstream economics and we try to think about alternative conceptualisations of how we relate to nature. So that's very much my area of work.

I look into the relationships of humans and nature, very particularly around the values that we hope for nature, and how those values are recognised in the decisions that we take about how we manage nature.

I've always worked in the area of water and water systems. So for me, working in wetlands and peatlands was a very natural evolution from just looking at rivers and water bodies and being in the UK and peatlands having such an important role in regulating climate, but also in providing water for drinking. It's just a very natural space for me to be working, coming from this water space and water nature and human relationship space.

03:37 – Josh Cohen

Yeah, it's great to be here as well. I'm a social environmental anthropologist. So, anthropology is a very broad topic but basically looking at the diversity of ways human beings relate, relate to each other, relate to the world, and normally has a methodology that's quite ethnographic. So that means sort of interviews or participant observation, where you take part in the daily life of people, and to learn more about it, and why that matters, and how I came to this to this work, I've always been interested in people, plants and water always seems to come into my work in different ways, and normally, some aspect of politics that comes weaves through that right? Because it's human beings, it's always politics involved.

And actually, I first came to the University of Leeds a few years ago, working on water, working on rivers, specifically. And then this opportunity came up, and it was great opportunity, a great project. It puts people at the centre. And like, Julia was saying that peatlands are so vital for water, for drinking water, for ecosystem, for everything, especially in this part of the world, just seemed like a really important thing to be part of.

04:57 – Laoise

So I suppose, like, you're saying WaterLANDS, then is such a perfect project because it has the water and the people, the wetland restoration, and then obviously there's also this green financing aspect within WaterLANDS. Is that how you got involved in this area? Or did this come about before the project?

05:18 – Julia

Well, actually, for me, this idea of green finance and the risk of nature commodification that we're going to be talking about in a minute is very much at the heart of ecological economics. So for me, this is a very known space, actually, in general, and something that we've been worrying about for a while. What has been very interesting, though, and this is something that has heightened my interest very much, was that we came into the space of WaterLANDS, one thing that we realised very soon, from the beginning, is that there's a very, very important drive, a massive drive, if I can call it, for involving investing in green finance, and very particular in bringing private actors into the sector of financing nature based solutions in general, but in this case, and in particular in our case, peatland restoration.

So when you know so this green finance and the risk that this can have was something I was already very aware of, but suddenly I realised that this was something that was not being discussed in the space of peatland restoration, wetland restoration, anywhere – like here in the UK, but also across Europe. And it was something that was not present, the risks of commodification were not present at all in the conversation that we were having as part of this project. So for me, I was like feeling the responsibility that I needed to bring these issues into the conversation.

06:42 – Sadhbh

So, when we talk about green financing, what do you mean by that?

06:45 – Julia

Well, that's actually a very good question, because there's a lot of you know, the word gets thrown around and there is no actual, proper - I mean, there is some definitions, but I have a feeling that the word is used most commonly as bringing private actors into the financing of nature-based solutions, or nature recovery, nature measures, climate interventions.

Now what happens is that traditionally, these kind of nature interventions have been funded by public money, through grants, through subsidies, through different kind of things, and a narrative has grown around the fact that, well, we maybe need to be bringing private actors into this thing for several reasons, one of them being that, you know, they need to do their part. You know, we have a problem with nature, and businesses are part of that picture, and they need to bring that, but also as a way of thinking, we can maybe leverage more money and to make this much more accelerated, this investment in nature isolation.

Also, there is an assumption within the economic system, that is that if you introduce market instruments and market mechanisms, that is going to drive economic activity around it, that's also going to drive innovation. If businesses are interested in this space and there's something for them to gain, they're going to drive the market to be more technologically innovative, for example, and we're going find better solutions. So essentially, we are going to be able to accelerate the recovery of nature. So that is, I will say, I would argue that is the most common usage of the term of green finance in this in this context, is increasing investment in nature restoration, but doing so by delivering money from the private sector.

08:32 – Josh

So, how we started – so Julia had this awareness coming from Ecological Economics, that there's this risk of nature commodification, that this is something that people are aware of, but we were being involved in WaterLANDS, and then there's this interest in private finance coming in, green finance coming in to help with restoration efforts. We were invited to go to some conferences, meetings on green finance and what that looked like, and what was needed, what might come out of that. And we noticed, we started talking to each other, just saying, well, hang on, the things, the risks that people are raising in these spaces at least, are only about the financial – how do we get more money? How do we get more landowners to come over. How do we convince more investors, that kind of thing. How do we make it a safe investment bet for people? And these other risks weren't coming up. So, we thought, okay, again, I feel like a sense of responsibility. Okay, we're in this space. How can we help address that? That there's these other types of risks that we think could be there but aren't being adequately spoken about.

Julia - 09:47

I will add to this, because as part of those conversations that we were attending or being part of and we were witnessing, there was this very strong, overpowering narrative here. Okay, so, there's been estimations that if we are going to meet climate and biodiversity targets, and I'm talking globally now, we need to cover a financial gap, which has been estimated in the 4.1 trillion US dollars, okay? And that's huge, right? So the argument there is that we're never going to be able to cover up that gap, and for that, we do need to bring different, more money, right? And where is that money? That money is with the private sector. That money is with the corporates, and that is a very, very strong narrative. It's very overpowering.

We have this massive gap. We need the money so everybody who has very good intentions and very good aims to do nature recovery realise that, you know, we need to go and find that money. So that is why we need to call in for these corporates to bring the private finance. And that makes a lot of sense, right? If you look at it, that makes a lot of sense. And that's why we understand that all the conversation has been around “how we how do we materialise that?” As Josh was saying, “how do we make landowners interact with these corporates so they can sell carbon credits”, you know, “we can also start selling biodiversity credits”, etc. So the conversation was completely dominated by that overpowering narrative of, we need to close the financial gap. There's a big gap, and we need to close it.

And of course, we understand that, and that's incredibly important. But we were also a bit, let's say, alarmed that, you know, these other risks of commodification, which we’re going to define and talk about in a moment, were completely absent from this conversation.

11:29 – Sadhbh

And so, when you talk about these risks and how nature commodification can be a problem, what are some of those risks? What kind of problems can this cause?

11:38 - Julia

Okay, let's start by maybe defining what we mean by nature commodification. So, nature commodification is, let's be a bit more technical now, is the symbolic and institutional changes that occur in our relationship with nature when we bring nature into the sphere of money and market exchange.

This means that the moment that we start bringing something into a narrative of money and exchange and market exchange, you know, I buy your carbon credits. That means that is going to lead to a change in the way we relate to nature, okay? And also, that is going to lead to a set of institutional arrangements that we make around that. So if you and I are going to sell, I'm going to buy carbon credits from you, this means that now the carbon economy is something different for me, because I'm buying it and you're selling it, and it also means that we need to make arrangements about, you know, how we're going to do that, that purchase, right? What are the credits? What are the arrangements that we do around that? Now, that represents a change in the way we relate to nature, right?

So this means that before, traditionally, as a society, we were protecting nature, because we thought we had to, it was the right thing to do, is the moral thing to do. We need it, right. This is a planet in which we live in, so we need to take care of it, and we need to protect right, and it was wrong to do damage to the planet.

In the moment that we change that into an exchange, a market exchange, this mean that we’re moving from that motivation of protecting nature to what is a market exchange, a transaction between it, and that comes with changes, and these changes come with risks. Now this is not to say, aspects of nature have been commodified for centuries, if not millennia, right? We buy food for many, many centuries, millennia. We also buy our energy.

So, this is about expanding the frontier of things that get commodified. Now we're talking about buying and selling carbon, buying and selling biodiversity. So that is how we define the risk of commodification. And, you know, we've been very precise. We talk about risks, okay, this means risks are things that may or may not happen, but that we have very strong grounds to think that they can happen. And if they can happen, there can be problems, yeah.

13:58 – Josh

And so there's a few, there's a few risks associated with that.

So there's the risk of property right access and sort of on a smaller scale for communities. So if someone is able to buy a large amount of land for carbon credits or whatever, through green finance then other people can't afford that, or maybe prices go up, we need controls in place to take care of that.

Again, related to that, there's an issue related to the concentration of wealth. Again, you know, we live in a country where there’s already a huge concentration of wealth, and a planet, and potentially this could play a role in accelerating that.

So that's another issue that we're concerned about with expanding the commodification of nature, like Julia was saying, we've already done that for however long – we're sitting in Leeds where, you know, we had huge industries surrounded by, in the past, wool production, that kind of thing. Nature has been commodified for a long time, but it's this expansion that we're worried about, and what role that might play in accelerating, reinforcing, the already troubling social, ecological, economic patterns.

15:09 - Julia

Just to give some examples of this, we're starting to pick up from the media, one of the strong arguments that was put forward in terms of carbon credits and selling carbon credits was the idea that rural communities, which had maybe lower economic activity and they were a bit worried about losing population, that's a problem, right? So, if the communities can sell the credits from their land through peatland restoration, for example, that was going to generate opportunities locally. I mean that these communities could use this money from the carbon credits to do community projects, to keep the youth, to keep the people.

However, what we have started to witness is, for example, there's been cases in Scotland about this, in which big corporates now come and buy the land, and instead of it being the community who is enjoying these benefits from the land, in terms of the carbon credits, they are excluded from that process and it's a big corporate who just takes the money, you know, and just do whatever it has to do with it.

So, you know, the ideas sound really good, you know, to generate a benefit from it, a profit from the land, and make the people enjoy that benefit. But the moment that there are big forces, will come from private interest, well, that is not working as it was intended.

And also, it's very important, remember, we say this is about changing the motivation for conservation if we now make nature for profit. The question is, what happens when there is not a profit? So you know when some of these lands are going to be very profitable, then great, okay, you're making the profit. But what happens if there is no profit to be made? It means that we don't do that restoration? Obviously, the argument is about that. Then this is when the public, the public money, can come in and protect the areas which are not profitable. But what concerns us is the deeper changes that this makes. If we change our relationship, if we say our symbolic understanding of our relationship, then this means that these nonprofit, profitable areas become this burden to society.

We see this, an example is with public buses, right? So, for a private bus, if the bus line is profitable, then great. Everybody's happy with that. But then there are some bus lines that are not profitable, but they still need to be there because they need to serve the people. But the whole narrative has changed right now. It's all we need to take care of this. You know, this is this cannot be. This is not part of the profitable model.

So, we are concerned about this deeper change, and the changes in the narratives and the changes in the discourses around how we protect nature. Something we should say, though which is important, is that we need to distinguish the motivations for private investment in nature recovery and restoration. It’s not the same, for example, if a private actor is coming to invest in nature because there's cost savings to be made, for example, water companies sometimes invest in restoration because this saves money from their operations, because there's less treatment works that need to be done in terms of cleaning the water, for example, that come from the restoration, that actually is different. You know, there's a cost saving. There's a real clear element of why this company can do that, that can maybe work. That's very different from when a company plans to make profit out of selling the carbon. Right? You can see, there's a huge difference between wanting a return from your investment, and then you need that land to be making you money in terms of the carbon. It's very different from what, if I invest in restoration, this means that I'm going to have less costs for my operations, and that's it, I'm just interested in cost saving. So, for me, it's very important that we distinguish this because I think the changes in that rhetoric and the changes in this discourse can be quite different in those cases, right?

However, something we should note is that, and the figures on this are still very new so there's not a lot of consolidated evidence, but there is one report from the Global Centre for Biodiversity and Climate, which calculates that at the global level, this is not UK, this is the global level, 90% of the current private investment in nature based solutions are actually revenue motivated – meaning that the investors want to make a revenue, as opposed to 24% which are cost savings. This is the global level.

And as I say, you know, those figures are, there's not a ton of consolidated evidence on this. This is just one report that we have found from a reputable source. But in any case, regardless of the very specific number of that figure, is the importance of the size of the market that we're talking about here.

19:54 - Josh

And I suppose one last risk that we didn't speak about, and thinking of the global level, maybe at the local level and the national level as well, is what that does to ways of viewing, ways of valuing nature that are outside of property rights, you're extending further into nature, forms of transactional relationships, transactional forms of valuing and then what does that do in places where people, perhaps are already taking care of nature, because that is viewed, say, a river might be viewed as a brother or a part of a family, lots of different ways of valuing nature. What happens when there's more and more money coming in and that finds its way into those kinds of relationships, and that's a question, that's a risk. We're not saying what will come from that, but there's a risk that that transforms that, and you're breaking some sort of existing reasons for protecting nature with something else that, as Julia was saying, is more vulnerable to the sort of vicissitudes of the market, of changes in prices, in carbon, of whatever it is you're changing. And there's a risk there that something is changed in a very fundamental way, that has risks for people living in that place, and for nature.

21:19 - Julia

Maybe I'll say one more risk here is that, you know, in nature conservation, in nature recovery, for decades now, we have followed, or try to follow, principles, which is what we call the mitigation hierarchy. So the thing is that first you try to do no harm. This is the top of your pyramid. So that sort of the bigger base of your pyramid has to be try to do no harm to nature. If you cannot do no harm, then try to minimise this harm as much as possible. If you have to do some damage, then you have to repair the damage, and only finally, when you cannot repair the damage, this is when you have to offset it. Now, if we are creating a market for this offsetting, this means that I’m going to allow the damage to happen, and then I'm going to offset for this damage, while that was supposed to be the last resort.

However, if there is now an economic activity on the offsetting, it means that there is, there's going to be brokers, there is going to be people who buy and sell, you know, who are in the market, of buying and selling. The market setting, as we are saying, that is creating an activity that's creating an incentive for that side of the mitigation hierarchy.

So, in a way, we are reverting the pyramid. Say there is a risk that is, you know, if your business model is entirely of offsetting, you want offsetting to happen. You need offsetting to happen as a business, right? So that's going to create an economic activity, and it's important because there is a lot of activity around carbon markets, a lot of activities around biodiversity markets, right? And for example, just to give an example, an example of the European Trading Scheme, which is the carbon market in the European Union. It has created a lot of, there's actually more, economic activity around the market than actually the amount of carbon being bought.

And so, it's a little bit like the Gold Rush in the US, in the west of the US, when the people who became really rich from the Gold Rush were not the people who found the gold, they were the people who built the roads, the people who built the saloons, the people who built the city. So, you know, the moment that you have created that economic activity, things happen in that space, and you create that reality.

Now, something that I want to say, emphasise very much, is that all of these are risks. We're not saying this is already - I mean, we have worries that this might be already happening - but what I mean, this doesn't need to happen, but if we do not acknowledge that these are risks, if we don't put in very, very strong governance settings, governing instruments, governance arrangements to prevent these things, that is when the big problem comes in.

You know, because all the examples that we have given, you could theoretically say, well, for example, the example I gave about what happens when the ecosystems are not profitable, you could say, well, that's when the government can come in. You know, there's things that can be done to try to prevent and mitigate those risks. What we are very alarmed about is that this is not in the conversation. So if it's not in the conversation, there is no way we're going to put these settings that are going to prevent this.

So, it's, you know, we that's our claim, that's our alarm. We want this to be acknowledged. We want this to be part of the conversation, and we want the policy makers, but also the restoration partners, because these are the people who really want to do the right thing, people who really want to restore nature. We want them to be more aware of this, and we want to work together in seeing how do we prevent this risk from happening? How we mitigate this risk from happening?

24:57 - Laoise

So, can you tell us a bit about the work that you've already done in this area, what you're doing to combat these risks?

25:03 - Josh

Yeah, so one of the things we've been doing, one paper that we've already developed, which is under review, has been looking at the policy frameworks, especially in the UK, looking at the UK, but thinking in the global context, right? What is in the policy framework for green finance and what are the risks that they're paying attention to? What can you see, if we went through, you know, as much as we could to see what risks are being paid attention to? And overwhelmingly, not entirely, but overwhelmingly, the risks are financial risks to investors, and that raised for us, increased our concern, I can say or confirmed our concern that we need to be doing more.

25:55 – Julia

So following that policy analysis that Josh has described, in which it was very evident that the risks of commodification were hardly paid any attention, we decided, okay, now we need to get to the ground. Okay, we need to see what is happening on the ground. Because we're starting to see some, let's call them media red flags. We're starting to see some things that happen in some communities around the UK, in which, indeed, there's these concerns about this community access to land that we were mentioning earlier, we started some things, but we really want to see what's happening on the ground.

Okay, so one thing that we are planning to do with our partners here, and we're very happy to actually be doing this together with them because, you know, these are the real people who are on the ground doing these things and doing the peatland restoration, and they have a very strong commitment to do nature restoration and to do it, you know, to do it well, to the well for the environment, but to do well for the people as well.

So, what we are doing is that we're organising a workshop with peatland restoration practitioners in which we're going to delve into this risk of commodification, and we will co design with them, and this is another very important part of WaterLANDS, is co-construction and co-design. We're going to design with them a research project in which we're going to go on the ground, we're going to select a few sites, and we're going to start interacting with the local community, but also with different actors, the land owners, the land managers, the restoration people, the civil society, you know, a whole range of actors in which we're going to try to explore whether there are already signs of risks of commodification actually visible, already starting to happen. You know, maybe I was just, you know, worrying about this but everything is nice in the ground without it, but let's see.

Trying to see, you know, is there any indication that some of these risks might be actually emerging, okay? And if so, in which ways, in how are they manifesting? And for us, this is a critical element. And if that is the case, then we really do need to send the policy makers a very strong message to say, you know, there's a rush for this green finance at the moment, particularly in the UK, please be very careful, because these are already the first signs. So, you're almost, we're going on a diagnostic quest, right? We're going to go and see and see how the patient is doing, and say, well, is there any pain? Is there any bleeding? Is there any element there?

28:31 - Josh

And also, okay, maybe the risks that we've identified there, maybe some of those are emerging, early stages. That's what we're looking for. But maybe there's other risks that we haven't, that we're not aware of, that’ss particular to this location, and that's why it's so important that we’re getting on the ground and talking to people and really getting a sense of what might going on in relation to this in this location.

28:51 - Julia

And the thing is that if you start paying attention, you know, maybe, hopefully, our listeners, when they hear us, then you start paying attention, and you start seeing things in the media. You start seeing campaigns you have seen, like local people's campaign, or you can see companies, concerns about certain companies. You know, there is something going on. We want to explore that, that thing that is going on, and see if, if it's really a concern, if we should be really concerned about it, and we essentially try to anticipate any damage to happen beforehand.

I think we now have a good awareness about environmental damage, but we also need to be very careful that however we design our interventions to restore nature, that is going to have consequences for our relationship with nature, so we want to make sure that is taken into account.

29:48 - Sadhbh

And so where do you plan to take this work? What's the next steps moving forward?

29:53 - Julia

Yeah, well, as we explained, this is we're designing this research on the ground right now, so really hoping, we have a timeline for the next, I'm thinking six to nine months to actually have actual empirical results. That's very important.

You know, as academic scientists, we, as I said at the beginning, you know, as an ecological economist, these are things that, for us, are well known, but often the debates are seen as being like, quite conceptual and intellectual, we want to gather the empirical evidence by going, as Josh was saying earlier, we go on the ground, we're going to do interviews, we're going to do this dialog with the people on the ground and provide that evidence.

So, what I what I really want to do, what we really want to do with that evidence, is bring that back to the policy makers and, you know, our work, obviously, is placed based here in the UK, but the issues are global and very particular in Europe. This is something that is happening across Europe, WaterLANDS is a European project, we want to be able to pass on that message, we want to refer to the situation at the moment, at the centre of the concerns about green finance, as Josh was saying, as the financial risk, the risk to the market, the risk to the investor, the risk to the consumer, trust in the market.

There is some concern about green washing. You know, that seems to be the only thing that there is a worry about, but green washing is seen as a potential backlash against the market. So if people lose faith in the market, then they're going to stop buying, right? So again, it's a risk to the market, with the risk of commodification being very, very marginal in, if at all in, the conversation.

What we want to do, well, we want to take this next is revert that and put the risk to nature and the risk to society at the centre of the conversation with the financial risk for the market and for the investment, it's important for being on more on the periphery of that being make sure that we get our priorities right.

31:57 – Laoise

So, as a final question at this point, what would be the next step for policy makers, or do you have any key recommendations or messages?

32:06 – Josh

I think the key message, as we said, is to place nature and people at the centre of the policy, take account of financial risks, but don’t have them at the centre – we need to reverse that priority. And I think probably for policymakers, one of them would be ok, listen to us, you know? This is the research we’ve got, we’ll make it as robust as possible and hopefully that will help make that shift, we can push for that shift, put nature and people at the centre, what else is there, you know? Put that at the centre and have the financial risk on the periphery.

32:44 – Julia

And I just want to add, you know, this thing that we’re saying, it sounds very obvious, but our research on the policy analysis proves that it’s not the case right now, so you know I’m sure if you to go talk to a policy maker, I’m sure they’ll understand, yes nature and society should be at the centre, they actually might even think that it’s at the centre, I’m pretty sure the intention is there, but when you look at the how, you know, how the policies are being framed and implemented, its actually not, so we need to make sure we don’t get complacent.

Of course, it’s a very obvious thing you can say, this is about restoring nature, how can you tell me that nature is not at the centre of what I’m doing when it’s about nature recovery? It looks like it’s at the centre, but when you look at the risks, it is not, it’s the financial risks that are at the centre, so I want to raise awareness about this and make a bit of self-reflection and say be careful, not because you’re doing something which is, in principle, good for nature, which is nature recovery, but the way you do it has massive implications on what happens with that so we need to consider that and that’s the key message that we want to pass on.

34:00 – Josh

And just one, I suppose, exactly what you said there, the why as well, I think that fits well in the WaterLANDS framework right, you’re trying to put people at the centre and that’s what we’re simply asking for, and arguing for, you know? And also the fact that restoration, that the previous work shows that putting people at the centre, having those good relationships, building those relationships of trust in places with people doing the restoration, helps that be more sustainable. And so I think it’s quite simple, but it’s important.

34:55 – Outro

Thank you for listening to “Exploring Restoration with WaterLANDS”, we are glad you could join us and look forward to having you with us for the next episode. If you would like to find out more about the project, you can go to waterlands.eu **spell out** where we have resources, news and further information on all things wetland and restoration. You can also find us on Instagram at “waterlandsart”, X at “WaterLANDS_EU, LinkedIn at “WaterLANDS” and BlueSky at “waterlandsh2020”.