U.S. Rep. Jamaal Bowman, D-N.Y., did not respond to Federal Newswire's request for comment on Natural Asset Companies seeking approval for land conservation efforts.
The New York Stock Exchange and Intrinsic Exchange Group have collaborated to introduce NACs, which are a novel asset class aimed at transforming ecosystems and related services into tradeable financial assets, according to an article published in Climate Conscious. Conservationists, however, worry NACS will only benefit wealthy investment firms and could eventually lead to the privatization of public assets.
"The alarm is sounding. Our reliance on fossil fuels has brought us to the brink," Bowman said in an Aug. 9, 2021, Twitter post. "We can prevent further extreme consequences of climate change. But it will require us to reorient our society toward clean energy and conservation. We need the Green New Deal framework, now."
Bowman also serves as the chair of the Subcommittee on Energy in the 117th Congress, according to his website.
NACs encompass various services that can be traded, including water purification, carbon sequestration, tourism, pollination, food production and soil fertility, Climate Conscious reported.
Intrinsic Exchange Group asserts the existing economic system's imbalance impedes the resolution of complex challenges like climate change, with positive externalities, such as valuable natural resources, failing to generate wealth while negative externalities, like pollution, burden the general public with costs. The introduction of NACs seeks to provide incentives for businesses to support conservation efforts, according to the Climate Conscious article.
Concerns have emerged regarding the true intentions and beneficiaries of NACs, Climate Conscious reported. Some individuals worry NACs might be a disguised mechanism that primarily benefits the wealthy while disregarding the plight of damaged landscapes.
Critics highlight investors, including corporate raiders and asset management firms, are likely to reap the greatest rewards from NACs, according to the Climate Conscious article. Environmental advocates are raising questions about the ownership of shared resources and the potential privatization of natural assets. Notably, prominent investors like the Rockefeller Foundation, Inter-American Development Bank and Aberdare Ventures have aligned themselves with the New York Stock Exchange and Intrinsic Exchange Group, raising suspicions about their underlying motivations.
Proponents argue NACs can deliver advantages if implemented with genuine intent. According to the Climate Conscious article, Intrinsic Exchange Group aims to channel funds into sustainable enterprises, such as regenerative farms, to foster a healthier environment and transform the way farmers are remunerated.
By incentivizing farmers for preserving wildlife habitats and adopting regenerative practices, small-scale farms can enhance profitability while also promoting biodiversity and mitigating soil degradation, Climate Conscious reported. Moreover, proper restoration of soil and ecosystems holds promise in combating climate change, as soil serves as an effective carbon sink.
The efficacy of NACs in achieving their intended goals and addressing environmental concerns remains uncertain. It is imperative to closely monitor whether the financialization of nature leads to the privatization of commonly shared resources and whether it genuinely serves the interests of conservation and climate action, the article noted. Only time will ascertain whether NACs prove to be a valuable tool that unites conservationists and large corporations, or if they exacerbate existing apprehensions regarding the exploitation of natural resources for financial gain.
Harvard Business School Online explains the tragedy of the commons is “a situation in which individuals with access to a public resource (also called a common) act in their own interest and, in doing so, ultimately deplete the resource.”
The tragedy of the commons theory explains how individuals prioritize their personal needs, even if it harms others.In situations where a common-pool resource, which lies between a public and private good, is at risk of overuse, individuals may prioritize their short-term interests, leading to unsustainable consumption and disregarding potential harm to the environment or the general public, according to Harvard Business School Online.
According to Greg E. Walcher at the Heartland Institute, skepticism and conspiracy theories have arisen around the intentions of NACs. Critics argue Wall Street is seeking to capitalize on nature and assert control over natural assets. While the company claims to have conservation goals, some remain wary of its ultimate aim to extract profits from natural processes that they seek to monetize.
The use of funds generated by NACs for conservation efforts is uncertain, as the focus shifts toward commodifying nature and allowing it to be bought and sold on the open market, the Heartland Institute article reported. While the concept of NACs may face resistance in regions where nature is not for sale, there are possibilities for investors in areas with available land.
The success of NACs will depend on whether the promised conservation projects and sustainability goals are upheld once nature becomes a tradable commodity, according to the Heartland Institute. Critics express concern about potential consequences, such as the monetization of clean water, clean air and access to natural resources.
