Seeing the forest-spirits for the biodiversity offsets

Notes for presentation to United Nations Environment Programme (UNEP) Convention on Biological Diversity (CBD) and World Conservation Monitoring Centre (WCMC) workshop at Chatham House on Markets for biodiversity and ecosystem services: challenges and opportunities, 29th November 2011.


I have been invited to speak of factors against the valuation of biodiversity and ecosystem services.


Of course I think that biodiversity should be valued. But there are many different ways of valuing something, all with different outcomes. In economics and business, the term ‘valuation’ is normally assumed to mean a monetary measure of a definable thing. This, of course, is one of the critical steps on the route to commodification, i.e. the process that enables something to attain a market value. What is of concern is that as such market values or prices come into focus for previously unpriced things, they can crowd out other values and value practices. This can have significant and varied displacement effects.


Newly created biodiversity and ecosystem service commodities that can be exchanged on offset markets align the ecological transformations associated with economic development and extractive industry with compensating priced values for conserved nature elsewhere. As such, they rely on radical value commensurability assumptions. These permit the loss of ecological options through development in one location to be compensated for, and traded with, maintenance or gain in apparently similar options in another location.1


There are a number of problematic assumptions and outcomes here:

  1. geography, place and intraspecific variation mean that like is not being exchanged for like on these markets;
  2. the model is development-led and thus requires ecological degradation in order for conservation units or credits to attain a market value;
  3. this means that degradation will occur at development sites and makes overall no net loss (of biodiversity) hard to reach in practice;
  4. and given that in commodity markets value rises with scarcity, this is a strange model to apply to the conservation of species and biodiversity. In this context scarcity implies rarity which implies risk of extinction. This is surely something to be avoided in creating policy in support of the continued presence of diverse species.


It is also important to be clear about what sort of markets are being created here. In a sense there is no real thing that is exchanged in new markets for biodiversity and ecosystem services. What are being traded are new representations of nature’s health and degradation that become legible in terms of monetary value. The process arguably is enhancing two problematic practices.


One is the strengthening of structures enabling purchase of the permission to pollute. Research has demonstrated in varied contexts that when such permissions are purchased, other behaviours towards lessening damage tend to be foregone and reduced. An ethical motivation to act favourably towards ecosystems and nonhuman nature is transformed into a monetary one, in a way that can discount and undermine any intrinsic motivation towards ecologically ethical and caring behaviour.2


As several commentators have pointed out, there is an uncomfortable echo here of the medieval practice of buying indulgences. In this practice the guilt of the sinner is allayed, simply by offsetting this guilt through purchase of a suitable unit of indulgence from an appropriate authority.3 Whoever becomes this authority is a political issue that fosters particular hierarchies and power relationships in the allocations of valued units of indulgence. The existence of the underlying problematic behaviour need not be addressed or altered in this model.


The second is that new markets for biodiversity and ecosystem services are basically constituted by the creation of markets for the rent of new land-associated values.4 These are represented by conservation measures such as carbon, biodiversity and ecosystem services that essentially become rented by those using or valuing them elsewhere. In biodiversity offsets, for example, permission to degrade biodiversity in one location is being bought through rent payments for the maintenance of a somehow equivalent ‘piece’ of biodiversity elsewhere. It is thus relevant to consider the implications of this bringing forth of new layers of land value that can be exchanged in new markets for their rent. Rising economic rents tend to be accompanied by two connected processes.

  1. an impetus to appropriate and privatise sources of rent-value, in order to capture the financial income that accrue from their sale on markets;
  2. financial speculation on newly ‘rentable’ assets, so as to push up their market value.


History tells us that these processes tend to generate contexts whereby land, and today the newly valued conservation entities associated with land areas, can become more valuable than the people on it.5 As is the case with current land-grabbing for food and biofuel production, there are some problematic and interconnected outcomes of these phenomena: they tend towards systematic enclosure of previously common resources; they enhance displacement of the different maintaining value practices associated with peoples whose cultures are variously embedded in land areas and ecosystems; and they enhance wealth differentials, often along particular axes of difference such as gender.


These combined processes are counter-productive in terms of biodiversity conservation outcomes for two key reasons:

  1. Research shows a high positive correlation to exist between biodiversity and cultural diversity.6 As such, the erosion of different biocultural values occurring through the displacements noted above seems set to also erode biodiversity. In this reasoning, incorporation within a global market economy that creates exchange values out of previously existing use and other existence values, will tend to transform the expression of land-entwined cultural values in ways that will have problematic ecological, as well as social, effects.
  2. The enhancing of wealth differentials, as seems likely to occur through consolidations of priced value associated with new markets in the rent of biodiversity and ecosystem services, will exacerbate problematic ecological outcomes. Research conducted recently at McGill University, for example, suggests, that it is economic inequality, as measured by the Gini coefficient among countries and among US states, that is the best predictor of biodiversity loss.7 In this analysis, ‘the connection between income inequality and biodiversity loss persists after controlling for biophysical conditions, human population size, and per capita GDP or income’.8 Importantly, a reason may be that such inequality tends to thwart the collective action required for the sustenance of public goods.


To close, then, new markets for biodiversity and ecosystem services may be counterproductive in conservation terms in several ways:

  1. they facilitate ecological degradation through development and resource extraction;
  2. they displace the ecologically-maintaining value practices associated with cultures with very different nature knowledges and values;
  3. and, by enhancing economic inequality, they may hamper possibilities for effective collective action in relation to the sustenance of public environmental goods.

Connected peer reviewed publications

Sullivan, S. 2018 Making nature investable: from legibility to leverageability in fabricating ‘nature’ as ‘natural capital’. Science and Technology Studies 31(3): 47-76.

Carver, L. and Sullivan, S. 2017 How economic contexts shape calculations of yield in biodiversity offsetting. Conservation Biology 31(5): 1053–1065.

Sullivan, S. 2013 After the green rush? Biodiversity offsets, uranium power and the ‘calculus of casualties’ in greening growth. Human Geography 6(1): 80-101.

Sullivan, S. 2013 Banking nature? The spectacular financialisation of environmental conservation. Antipode 45(1): 198-217.


  1. As discussed in O’Neill, J. 1998 The Market: Ethics, Knowledge and Politics. London: Routledge.
  2. Hannis, M. and Rawles, K. forthcoming. Compensation or bribery? Ethical issues in relation to radwaste host communities, after Frey, B.S. and Jegen, R. 2000 Motivation crowding theory: a survey of empirical evidence. Zurich IEER Working Paper No. 26 and CESifo Working Paper Series No. 245, online:
  3. Goodin, R.E. 1994 Selling environmental indulgences. Kyklos 47: 573-596; Smith, K. 2007 The Carbon Neutral Myth: Offset Indulgences for Your Carbon Sins. The Transnational Institute and Carbon Trade Watch, online:
  4. See Swyngedouw, E. 2010 Rent and landed property, pp. 310-315 in Fine, B. and Saad-Filho, A. (eds.) Companion to Marxist Economics. London: E Elgar.
  5. Sassen, S. 2010 A savage sorting of winners and losers: contemporary versions of primitive accumulation. Globalizations 7(1-2): 23-50; de Schutter, O. 2011 The green rush: the global race for farmland and the rights of land users. 52(2): 503-559.
  6. Loh, J. and D. Harmon. 2005 A global index of biocultural diversity. Ecological Indicators 5: 231–241.
  7. Mikkelson, G., Gonzalez, A. and Peterson, G.D. 2007 Economic inequality predicts biodiversity loss. PloS ONE 2(5): e444. doi:10.1371/journal.pone.0000444
  8. Ibid. p. 1.

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