Natural Capital and Biodiversity: Money, Markets and Offsets

This chapter is concerned with the commodification of biodiversity, and in particular with the development of offset markets as a means to achieving “no net loss” or “net gains” in biodiversity. The chapter places the commodification of biodiversity in the context of wider debates about the commodification of environmental goods. What are the sources of environmental problems such as biodiversity loss? Market endorsing arguments in neo-classical welfare economics claim that their source lies in the incomplete commodification of environmental goods and the solution in their commodification. Market-sceptical positions are critical of arguments for commodification and more strongly claim that the generalised commodification of environmental goods is itself a source of environmental problems. The chapter shows how commodification of biodiversity and offset markets illustrate some of the problems with the commodification of environmental goods: environmental governance is rendered consistent with systemic growth imperatives that are a source of environmental problems; market modes of valuation foster ubiquitous substitutability; forms of injustice result through the displacement of burdens and the loss of places and livelihoods that meet vital biological and social needs. These problems are related. The design of systems of environmental governance consistent with continuing economic growth requires places and habitats to be substitutable so their destruction can be compensated with “no net loss.” The shift in location shifts burdens and impacts. Where it is most “efficient” to shift them is to the poor. Environmental problems such as biodiversity loss have their source not in incomplete commodification, but rather in their commodification.