Utah’s State Treasurer, Marlo Oaks, issued a warning against a plan by the U.S. Department of Agriculture (USDA) to monetize "ecological services." The Sep. 16 letter to Terry Cosby, Chief of the Department of Agriculture's Natural Resources Conservation Service, was a response to the USDA’s Request for Public Input on the implementation of sustainability targets under the SUSTAINS Act.
Oaks expressed concerns over what he says is a dangerous effort by federal agencies and environmental groups they are funding to convert natural resources and ecological processes into financial commodities.
The USDA proposes to assign monetary value to clean air, water, and biodiversity, and then create markets where the services can be traded. Oaks contends that such measures, especially through new concepts like "Natural Asset Companies" (NACs) and "Natural Capital Accounts" (NCAs), pose risks to public land management, state economies, and even national security.
The New York Stock Exchange submitted a proposal to the Securities and Exchange Commission in September 2023 to allow investors, including foreign sovereign wealth funds, to buy and manage ecosystem services on U.S. lands. According to Oaks, this could have allowed private investors to control large swaths of land, including public lands crucial to the livelihoods of rural communities.
In his letter, Oaks pointed out that the potential for foreign ownership of NACs posed national security threats. By acquiring the rights to manage U.S. lands, Oaks says foreign adversaries such as China and Russia could restrict vital resources like energy production and agriculture.
“What better way for a foreign adversary to cripple the United States than by investing money to lock up our natural resources and food supply?” he wrote.
The NAC proposal was withdrawn in early 2024 following public opposition.
Oaks expressed concern in his letter about ongoing efforts by the Biden Administration to pursue conservation leases and Natural Capital Accounts. The initiatives, Oaks argued, mirror the same principles that made the NAC proposal controversial.
Under the NAC framework, Oaks said ecosystem services such as climate regulation or water filtration would be assigned arbitrary values by the federal government. The values would then be traded in markets similar to those used for traditional commodities.
However, Oaks argues that such valuations are inherently subjective and ripe for manipulation. He cited difficulties in applying traditional U.S. accounting standards to nature, noting that most "ecological services" do not generate tangible economic activity.
Even proponents of NACs, including accounting firm Ernst & Young, acknowledged the limitations in assessing biophysical measures without specialized expertise.
Oaks also expressed skepticism over the legal standing of “ecological performance rights”—a concept embedded in the NAC proposal. The rights pertain to non-exclusive public goods, such as clean air or biodiversity, and are not recognized under U.S. property law.
One of the most pressing concerns according to Oaks is the potential impact of such policies on Utah’s rural communities, which depend on public lands for activities like agriculture, grazing, and energy production. About 67% of Utah’s land is federally owned, with a significant portion dedicated to grazing and energy extraction.
The letter noted that Utah’s agricultural sector generates approximately $2.1 billion annually, with cattle sales accounting for $378 million. Federal restrictions have already led to a sharp decline in grazing on federal lands, reducing the viability of the local farming and ranching economy.
Should the federal government continue restricting land use under the guise of environmental protection, Oaks warned, it would devastate Utah’s rural economy.
“The financialization of nature represents a dangerous and misguided approach to land management and sustainability,” Oaks wrote. Instead, he called for continuing locally-driven land stewardship practices that balance economic productivity with environmental conservation.
