Economist: Nature’s Banker
Business and Conservation: Nature’s Banker
Lessons from the Nature Conservancy
Nature’s Fortune: How Business and Society Thrive by Investing in Nature. By Mark Tercek and Jonathan Adams. Basic Books; 243 pages; $26.99.
MARK TERCEK might seem an unlikely boss of the Nature Conservancy, a big American green group. He spent little time outdoors in his youth and then a quarter of a century working for an investment bank. He has probably worn sandals from time to time; he is not known to have worn a beard. Yet this is apposite. Mr Tercek is at the forefront of a new, businesslike sort of environmentalism, which is changing the way companies and governments view nature.
It typically involves putting a valuation on the useful things that nature does, such as the provision of clean water by a spring or flood protection provided by a forest. Once the value of such “ecosystem services” is established, it can be included in business plans. Thus, New York City’s planners established that, to address their polluted water supply, they could either spend $8 billion to build a giant water treatment plant or $1.5 billion on planting trees and otherwise improving the Catskills watershed. At a stroke, they had a business case for tree-hugging.
Mr Tercek and his co-author, Jonathan Adams, provide many such examples in this overdue digest. The most successful involve water—thus, the flexible Australian water market that helped mitigate the effects of a serious drought; or Coca Cola’s pledge to use water so efficiently that, by 2020, the company will supply as much to cities and the environment as it consumes. This was not born of idealism. Coca Cola faced a threat of lawsuits and water shortages if it did not improve the way it used water—its commitment is all the stronger for that.
Mr Tercek concedes that the economics of environmental protection are often less propitious. Sometimes, the water treatment plant will be cheaper than afforestation. Moreover, regulation is often needed to create markets for nature’s bounty to be traded on, and it may not be forthcoming. Thus, the world’s failure to establish effective carbon markets in order to cut greenhouse-gas emissions. But that is no reason to damn the approach. Once the business case for greenery is accepted, as Mr Tercek shows, the results are often stunning.