19,99 €
Mehr erfahren.
- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
An exciting exploration of the new frontier of finance, to value the planet and protect what has too long been treated as free and taken for granted--the natural assets we need and love most In Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets, renowned environmental strategist, speaker, world traveler and author Paula DiPerna brings a unique voice and optic to de-mystify and unveil today's most fascinating financial disruption--pricing the priceless to flip conventional ideas of how we value natural assets and why. She asks the provocative question long ignored: Why do we value the indispensable atmosphere at zero, but dispensable production in the trillions? She digs into alternatives, with real-life examples from around the globe of fascinating and pioneering financial innovations--controversial and paradoxical, but essential. In the book, you'll travel from rainforests to Wall Street, Board Rooms to the Vatican, coral reefs to mangroves to China's carbon markets. Timely, adventurous, eclectic, and accessible, Pricing the Priceless brings alive the critical financial transformation that will determine future planetary health and social stability. With power, clarity and real-world experience, the author also examines: * Fascinating new financial inventions and experiments--insurance, bonds, markets, investment funds--all aimed at pricing what is precious and vital to human well-being * How the great current intergenerational shift in wealth and attitudes is redefining investment trends and the idea of what constitutes wealth and return * How climate change and other urgent environmental problems now require entirely new financial thinking to trigger solutions * How once-radical ideas about measuring economic progress are now re-imagining the very purpose of capitalism * Why finance needs critical re-invention to remain credible in the face of increasing public skepticism of business-as-usual economic practice A can't-miss read for thought leaders, business executives, investors, activists, and entrepreneurs, Pricing the Priceless is a landmark that will shape the world and future, bridging the tangible and intangible to answer a critical question of rising economic and social inspiration: What is money for?
Sie lesen das E-Book in den Legimi-Apps auf:
Seitenzahl: 511
Veröffentlichungsjahr: 2023
Ähnliche
Table of Contents
Cover
Title Page
Copyright
Dedication
Preface
1 Michelangelo's Finger: The Pope and the Atmosphere
2 Marooned: The Island of Wrong Things Measured
3 One of a Kind: The Gamble of Rarity and Price
4 Art in a Box: Pricelessness Saves Detroit
5 Mangroves and Money: All of Nature Is an Economic Machine
6 The Cosmic Penthouse: Carbon Pricing, Carbon Markets
7 Dare to Surmount: China Joins the Marathon
8 Wall Street to the Rescue? Nauru May Answer
9 Never Another Drop: The Flow of Water Markets
10 Wildlife and Wonderment: The Rhino Bond
11 Premiums to the Coral: Coral Reef Insurance
12 Forests as Infrastructure: The Forest Resilience Bond
13 Off Limits: The Value of Do Not Touch
14 Infinite Value: Return to Rome
Acknowledgments
References
Index
End User License Agreement
Guide
Cover Page
Title Page
Copyright
Dedication
Preface
Table of Contents
Begin Reading
Acknowledgments
References
Index
Wiley End User License Agreement
Pages
i
ii
iii
vii
viii
ix
x
1
2
3
4
5
6
7
8
9
10
11
12
13
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
177
178
179
180
181
182
183
184
185
186
187
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
241
242
243
244
245
246
253
247
248
249
250
251
252
255
256
257
258
259
260
261
262
263
PRICING THE PRICELESS
The Financial Transformation to VALUE THE PLANET, SOLVE THE CLIMATE CRISIS, AND PROTECT OUR MOST PRECIOUS ASSETS
PAULA DIPERNA
Copyright © 2023 by Paula DiPerna. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
ISBNs: 9781119913801 (Cloth), 9781119913825 (ePDF), 9781119913818 (ePub)
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per‐copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750‐8400, fax (978) 750‐4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748‐6011, fax (201) 748‐6008, or online at http://www.wiley.com/go/permission.
Trademarks: Wiley and the Wiley logo are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762‐2974, outside the United States at (317) 572‐3993 or fax (317) 572‐4002.
Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic formats. For more information about Wiley products, visit our web site at www.wiley.com.
Library of Congress Control Number:
Cover design: Paul McCarthy
Cover image: © Getty Images: Eyeem
To the hope that we may repay the patience of our wondrous planet
Preface
“One of the World's Coldest Places Is Now the Warmest It's Been in 1,000 Years,”
Scientists Say
Such was a news headline greeting the new year of 2023, but how to respond, how to process, absorb, take it in? As is said in French, the news was bouleversant (roughly, enough to turn you over).
“Ice in Greenland, one of the planet's refrigerators, is defrosting, leading to melting events that could raise sea levels 20 inches by the end of the century.”
Incomprehensible, ungraspable—information and the oceans, over the rim of the cup. And yet, facts like these will be ever present, their own tick‐tock. The climate crisis is not only a crisis of science, but of contemplation.
Facts collect and compound, and the question is whether they accelerate or paralyze our ability to act to address climate change. We have a need to know, but because solutions are elusive and costly, we tend to emphasize our quest for knowledge, as if that were action in itself.
Rachel Carson, author of the long ago Silent Spring, meticulously collected facts for her landmark book illuminating the impact of toxic insecticides that were disrupting many natural cycles, killing invisibly until we finally saw the corpses of birds and bees.
Carson's work triggered a ban on DDT and a revamp of how pesticides were used, leading to reforms within the chemical industry for which we can be grateful to this day, even as our knowledge and will to avoid the problems Carson cited has increased.
However, Carson's contribution transcended the science she put forward. She enabled us to see what we couldn't see before our eyes, what was far away, what we thought couldn't or wouldn't happen in the world we knew. She reminded us how easily nature could get out of balance while we weren't looking and then, oops, too late.
Climate change is of the same stealthy quality, happening at a distance until it comes home. For decades, climate science has brought us facts, but these too seemed to describe incidents and places beyond ourselves, not about us. Until the now of things.
Climate change, so quickly it seems, is proximate, notably in the extremes of weather that no longer qualify as odd. Victims of climate change seem close, even if there is no bulletin board making the connection. We hear more often of people we know losing their houses to fire, or flooding, or crazy wild storms, like the nightmare snow in the winter of 2023 in Buffalo, New York, where hundreds were stranded and shocked, or the chain of wildfires plaguing the world. Maybe we cannot tie all this rashness of weather inarguably to climate change, but common sense suspects the relationship. The ring of impacts touches us more personally each day.
We can also read climate change in our instincts. Gradually some years ago, I began to be aware of more wind around me—more breezes, more light warm wind coming off the earth, more treetops swaying, more wind in a common rainstorm. Then one day as it rained and blew, my neighbors lost a sturdy oak it had seemed no wind could topple, falling awfully close to their roof. Was that fall climate‐change related? It happened only once, but once would have been enough if they'd been standing too near. I put the incident aside. Not every errant event can be blamed on climate change.
Later, though, I came to learn that maybe my instincts on the wind were borne out. Wind, I was told by an astrophysicist devoted to wind research, plays a critical role in mediating temperature extremes and so my hunch of more wind around perhaps correlated with subtle changes in temperature patterns. Cause and effect? It will be a while before we can say for sure, but is certainty our best friend?
As examples in this book demonstrate, extreme weather events are becoming more frequent and we are not bystanders. We can feel it as earthly temperatures vary wildly, sometimes within the safe confines of the four seasons we all recognize—the four seasons of composer Antonio Vivaldi and every other artist in any culture who has ever contemplated seasons and for which every language has a word. And sometimes the extreme highs and lows, wetness and dryness occur within the familiar four. But, more of late, the extremes rearrange our experience, creating even a fifth season that has no resemblance to the others and occurs outside of any calendar.
I wonder if any language yet has a word for this alien time of year.
To an extent, climate change information may have reached a point of diminishing returns—we don't need to know much more before we put addressing climate change at the heart of our economic efforts and open our eyes to the rewards. Climate change has become the hub of our wheel.
Yes, changing climate presents a vast engineering problem, but also equally vast jobs creation potential for people with every level of skill. There is so much to redesign, retrofit, rehab, reinvent, and reconstruct—an exciting expansive reconception of how we organize our energy and energies. A thrilling recast, in fact, driven by the need to avert and stem risks, convert the invaluable to value, and invest a steady devotion to the precious.
I worked closely with French ocean explorer Jacques‐Yves Cousteau, who opened my eyes originally to the absurdities of our pricing systems relative to the stewardship of invaluable resources.
In the United States, vast oil reserves were discovered in Alaska and brought to market via a network of feeder pipelines from Prudhoe Bay to be loaded on to oil tankers and shipped to points around the world. Estimates were that Prudhoe's reserves would last about 25 years and serve as a “bridge” fuel to the next era of energy supply, perhaps even renewables that at the time were drawing research attention.
When the Exxon Valdez infamously ran aground in Alaska in 1989, causing the largest oil spill in US history at the time, hundreds of activists headed to Prince William Sound, where the oil tanker lay stricken and seabirds and sea mammals, especially otters, swam into dank pools of heavy crude. Emergency animal welfare centers were set up, and heartbreaking images of soiled and dying cormorants, gulls, otters, and other sickened animals flooded the airwaves.
Cousteau, however, seemed remote from the impact of the event and so I asked him, “Why aren't you upset about this tragedy?” He quickly responded, “I am upset, but the real tragedy is taking that oil out of the ground at today's prices.”
Oil was oozing on the sea, as wasted there as it might have been when it reached its destination. America's profligate energy consumption was made possible by undervaluing nature and a sense of limitless rights of use.
In the public narrative, the running aground of the Exxon Valdez was a wildlife story, not an oil story, and soon the ship underwent a name change to leave the shame of the accident behind, and all went on as before.
Since Cousteau's remarks about the tragedy of undervalue, though, I've tried to keep close to the price questions, not to debase the more metaphysical aspects of nature but because—for reasons I outline in this book—underpricing indicates disrespect. What is free, we take, and we take to an extreme.
We have tended to demonize fossil fuels as our woes about climate change have intensified, as if the fuels themselves were the villains, whispering “Burn me” seductively in our ears. Yet fossil fuels, too, have been victims of our failure to account for the irreplaceable in our pricing and accounting systems. Fossil fuels have also suffered our disrespect. Now we seek to banish them even as we truly have no coherent plan to fairly and efficiently distribute their replacements. And even though this book venerates the billions, even trillions, of dollars worth of unpaid labor provided by nature, I surely know that people cannot eat “ecosystem services” or pour those values into gas tanks, or use them to heat homes or boil water. The gap between theory and practice closes, but too slowly.
Perhaps this is the charge of leadership for the foreseeable future?
We fell into a belief that sustainability was a plateau point and a forever construct, if only we could reach it, but we haven't yet.
Part of the climate crisis is that our sense of cause and effect is too stretched, and our target dates too far away. Science projects impacts to the end of the century, or 2050, even 2030. But those dates outrun the stamina we have today.
The climate crisis is outsized, too large for our psyches. The planet's resilience has been our illusion.
Perhaps instead of living in fear that we must catch up with a crisis, to fend it off, we can transform our fear into animated compulsion to create a beautiful and inspiring counterforce, that collects our best and most brilliant beliefs in the answers at hand, infuses the hopes of all people as the propulsion, and then off we go in manageable bursts of forward motion.
Greenland, of course, is far to the planetary north—but is it only Greenlanders who can hear the ice of ages melting into cups of slushie?
If we can put meeting the climate change challenge at the center of our lives and imagination, especially our economic and financial decision‐making for five years, then another five, and so on, we will gradually tilt the earth toward resolution.
1Michelangelo's Finger: The Pope and the Atmosphere
There was no hush when Pope Francis entered the Sala Clementina in the private Apostolic Palace in Rome. Instead, we flew to our feet in a standing ovation—some even hooted and cheered as if for a baseball hero who had hit it out of the park. But if this was not the standard decorum for the occasion, the pope did not seem to mind. He broke into a broad smile, walked across the room to greet his cardinals, and then took his place.
The pope does not usually grant audiences in July, we were told, but he was making an exception because of his stirring commitment to the topic at hand: climate change and its deleterious impacts especially on the poor, the core theme of his landmark environmental encyclical, Laudato Si, issued in 2015 just before a pivotal UN Climate Change Conference to be held in Paris. The encyclical placed the pope at the forefront of leadership on insisting that governments address the care of our common home, planet earth. The encyclical was not static, and the pope seemed intent on keeping it topical and in the public eye.
This meeting with him marked the third anniversary of Laudato Si, and we had all been invited to the Vatican to make suggestions for advancing the statement's meaning and impact.
My trip to Rome began in London, where I had flown from New York so I could spend the night and continue on reasonably rested first thing the next morning. I left my hotel so early that the lone night porter had to let me out, lifting the heavy brass bar bolted across the antique wooden lobby door.
Nearly alone on the city streets, the taxi driver peppered the trip with curious chitchat.
“Where are you flying?” he asked.
“To Rome,” I replied.
“And what's that for, dearie?” he probed. “Vacation?”
I could not resist. “Believe it or not, I have an audience with the pope.”
“Well, that's a big one, isn't it?” he said. Then, speechless for barely a second, he let out the long tale of how he had happened to get married twice. We all have our priorities, I thought.
Gatwick Airport was wide awake, its serpentine gallery of duty‐free shops chock‐full of dallying passengers, as if planes were no longer the point of airports.
At last I got to my gate, the zigzag aluminum boarding ramp shaking like a portable dock on a summer lake—no carved marble masterpiece staircases leading into grand Vatican meeting rooms quite yet.
But in Rome, American Express was keen to let us know where we'd arrived. “Don't tackle tagliatelle without it,” warned the billboard in the customs hall.
I entered the joyful state of listening to Italian, trotting out my basic version. I had chosen a hotel just outside the Vatican, thinking I had better be a stone's throw from the action.
The driver knew the street but not the specific address. “Is it on the right or the left side of Concilazione?” he wondered. “If we knew, I could avoid a lot of turns.” I didn't know and neither did his GPS.
We pushed on. The driver took a second to point out the Castel'Sant Angelo in full view nearby, and then said, “So signora, let's take a guess. What do you think—left or right?”
Life is always some sort of gamble in Italy, some aspect of a pursuit of the artful. “What would Tosca say?” I teased him back, knowing he'd get the Puccini opera reference for sure as we passed ‘Sant'Angelo, site of the opera's last scene. He burst out laughing.
“Let's try right,” said I.
That was wrong, but the driver gave me a stately bow as he dropped me on the nearest corner. My hotel was just a few suitcase rolls away, and so was St. Peter's Cathedral, icon of multitudes but that day, off‐season, standing alone in silent gleaming white marble perfection. I had only to raise my eyes to take it all in.
In the morning, I found a Daily Gospel under my door. It turned out that the hotel doubled as the home base of the Salvatorians, a monastic order founded in the 1880s. I left the gospel on my desk and headed out.
Above, a sky‐diving unbroken blue sky, and Rome's summer heat was very present. At the vaulted entrance to the square, homeless men were still curled up inside their overnight cardboard boxes, and trash was tucked between bricks as if treasured possessions left for future generations to find. In the street, a woman draped in black bent herself into a right angle like a bracket holding up a shelf, whispering her misery in such a choked yet audible voice, she might have been cast by Shakespeare to play a pauper hag to break our hearts.
Security guards and carabinieri were everywhere, and I could feel the eyes of the police on my back as I bent to tie my shoe, heading for the private Uffizi gate entrance.
What was I doing here, I, who had left the practice of Catholicism years ago? For one thing, I had a lifelong fear of all things Church dating back to my First Communion days, when the nuns commanded that we keep our heads down while the priests did their magic on the altar, turning bread and wine into the body and blood of Christ. Ask no questions, we were told, and so I peeked often, widening my fingers just enough to see if I alone was sneaking a look, thinking I was flirting with going to hell. In this cradle of obedience where rigid authority ruled, popes were beyond us all, out of imagination and out of reach.
But this new pope, the former cardinal from Argentina named Jorge Mario Bergoglio, elected Pope Francis in 2013, was close to real life, venturing directly into the concerns of real people wrestling with complexities and ambiguities. After all, when he declared shortly after becoming pope, “Who am I to judge?” about gay people of goodwill seeking their god, he stunned the world with his thoughtful grasp of the boundaries between theory and practice, and I welcomed with relief and admiration his astonishing rejection of dogma.
The pope was also bringing his moral authority to knotty environmental and economic issues, such as climate change, which have festered for decades without resolution because they, like some social issues, have also been prisoners of dogma and preconception. The major environmental problems that plague us today have defied resolution mostly because they defy certainty and easy rules.
The sweeping Laudato Si, published to global acclaim in the buildup to the UN conference in Paris, was intended to add the weight of the pope's voice to the impending international negotiations and clearly stated that nature is a common inheritance of all people equally. The pope urged all nations to once and for all accept the science of climate change as irrefutable and all environmental problems as a universal responsibility.
Still, on the subject of tactics and what to actually do, I felt obliged to challenge a few misguided but influential paragraphs in the pope's encyclical that would not help the cause. Refreshingly flexible on social issues, the pope seemed stuck like many with a tired, rigid mantra when it came to climate change and environment—that money, capitalism, and markets were the root of environmental evils. Specifically, the pope had too roundly reproached carbon markets and “carbon credits” as false, mere reflections of commercialism and permitting what he termed “the guise of a certain commitment to the environment.”
However, I believed that when properly designed, monitored, and implemented, carbon markets were vital to implementing the pope's best hopes for Laudato Si. They are integral to the vital idea of “putting a price on carbon,” for one thing, and so may be one of the very few effective economic means to reckon with global environmental urgency.
Pricing carbon means attaching a clear financial cost to emitting deleterious carbon dioxide and other greenhouse gases (GHGs) into the atmosphere from the burning of fossil fuels, otherwise a cost‐free act of pollution. “Pricing carbon,” a goal of environmental advocacy for decades, has never quite established itself in the financial mainstream because carbon markets have been set up in fits and starts in a patchwork of inconsistent policies, nation to nation.
Then, just as carbon markets had a chance to be accepted and coalesce globally, scheduled to be a high‐priority discussion at the impending Paris conference, the pope was condemning them. So, to try to avoid this setback, I wrote the pope a letter to seek a change in his view. The subject line was “Laudato Si and ‘Carbon Credits’—observations and possibly useful advice.”
Dear Holy Father, it is in the spirit of mutual dedication and belief that I humbly bring to your attention some references in the Laudato Si that may benefit from reflection and modification and which may have resulted in advice that did not have the benefit of complete information on the topic, namely, environmental markets … that have tended to undermine confidence in useful tools … and the policy relative to a “price on carbon,” an unfortunate shorthand that oversimplifies a complex matter. …
First, I would like to provide some philosophical and moral context for my views. As you well know, all of time stands still in Michelangelo's “Creation of Adam” on the ceiling of the Sistine Chapel, perhaps one of the most famous paintings ever known. And, in the painting, all divine power sparks not as two fingers touch, but as they come only close to touching. The power seems to live rather in the space between Adam's finger and the finger of the god who is reaching out. That space between them is invisible, intangible, limited yet omnipotent and, of course, priceless. Earth's atmosphere is also as fragile, as limited as this space. Thus, we must protect it, by discouraging gluttonous use and abuse of this ineffable rarity. …
Carbon markets do not privatize or exonerate. They are simply accounting systems like any other that assign value where the failure to assign value to date has led to obscene denigration of that which we have considered ours to use freely, at no cost. … I put myself at your disposal. I would travel to Rome, if desired, to discuss the topic. With my gratitude and any blessing a humble searching soul such as I may convey from my being to yours,
Most sincerely,
To have a chance of the letter actually reaching the pope, I first ran it by a Vatican diplomat at the UN office of the Holy See, who read and cleared it, and even promised to put it in the diplomatic pouch he sent weekly to Rome. The letter found its way to the desk of Cardinal Peter Appiah Turkson of Ghana, then the pope's key advisor on Laudato Si and Prefect for the Dicastery for Promoting Integral Human Development, who sent me a polite thank‐you note. But seeing the phone number next to the cardinal's name, I immediately called and, through the goodwill of the cardinal's personal secretary, booked a follow‐up for some weeks later to flesh out the topic with Cardinal Turkson. At the appointed hour, the affable cardinal and I batted around the issue of carbon markets for a bit, and he acceded to my visiting him in Rome to speak further in person.
Perhaps he didn't expect me actually to do it, but I made the trip that fall. We met at the Palazzo San Callisto, an open hexagon of pink stucco with palm trees swaying in the garden. In the homey salon, the cardinal and his assistant Father Josh Kureethadam and I chatted about the paragraphs on carbon markets including “carbon credits” in Laudato Si I had questioned. I further made my case, understanding that the pope could not retract opinions expressed in his original Laudato Si, but suggesting that perhaps the pope could issue a clarifying addendum or editorial in L'Osservatore Romano, the Vatican newspaper.
I went so far as to suggest that the Vatican declare a plan for all its operations in Rome to become “carbon neutral,” which would mean the Vatican could directly test out the workings of carbon markets, including buying “carbon credits,” also known as “offsets.” These are derived from environmental projects such as reforestation intended to neutralize a metric ton of greenhouse gas emitted in one setting by capturing it, or “offsetting” it elsewhere. Interpreted by some as relieving the burden on major emitters of greenhouse gases to directly reduce their own actual emissions, offsets courted controversy and what the pope himself had termed the “guise” of action. A carbon‐neutral Vatican would require the Vatican to try to reduce the fossil fuels it burned and purchase carbon credits equal to the emissions it could not eliminate. I suggested that surely countless committed enterprises in the world would cover any associated costs, to spare the Vatican budget and support the demonstration. The Vatican would set a monumental example, I suggested, of how carbon pricing can work, including the constructive role of carbon credits, especially since critics of carbon credits tarnished them with comparison to indulgence letters once sold by clerical leaders, including popes, in return for forgiveness of sins. Cardinal Turkson said he would consider my views, and Father Josh gently saw me out.
That Christmas, I perched a tiny bright red feathery cardinal in the pine wreath on my door and sent a photo of it to Cardinal Turkson as a Christmas card. I heard nothing for several months. But the following spring when I checked in again with Father Josh, he let me know our discussion had not been forgotten. I was invited to a forthcoming special conference in Rome of environmental and theological leaders to discuss my points and several others that were being proposed to deepen and extend the reach of Laudato Si.
And so began my journey to the inner sanctums of the Vatican and beyond, tracking the radical transformation under way in finance, in which carbon markets are but one part.
Old ideas about money—what it's worth, how it operates, and what backs it up—are becoming useless and obsolete because of a gaping flaw in our financial systems no longer possible to ignore: failure to financially value and price the priceless, the ineffable elements of life, especially our atmosphere, on which our environmental and social stability now increasingly depend. The result? Intangible yet indispensable natural assets taken financially for granted, and therefore essentially laid waste.
Reversing this reality is neither fringe nor naïve, but a necessary seismic shift.
From the pope to mega‐investor Larry Fink, who heads Blackrock, perennially the world's largest financial asset manager, to Swedish teenager Greta Thunberg, who squatted outside her school to protest climate change and triggered a global movement, to mainstream bankers and oil company barons in China, and everyday people everywhere, our world hears multiple unconnected voices coming together in the same global chorus proclaiming that our financial systems have fallen far short of protecting the planet and that capitalism needs to change its priorities to avoid catastrophic environmental and social detriment.
Though once fresh, these calls for what has been termed reimagined, more inclusive, or stakeholder‐led capitalism have become their own drumbeat, stuck between wishful thinking and real‐world practice. No matter how loud or widespread they become, they can never gain traction without the missing piece, the tool of pricing the priceless—experimental, at times controversial, but upending and inevitable.
It seemed to me that dismissing capitalism and the drive to make money as irredeemably in conflict with environmental stewardship is another rigid sweeping dogma whose time has gone. At the least, we cannot merely continue to complain about the excesses of the past. Suppose, instead, we could use money and its language—the language of price—to protect the priceless elements of living and social cohesion that we cherish, rather than sabotage them?
And what if a quiet revolution has occurred among the money changers and lenders, and the Wall Streets of the world—such distrusted entities—were evolving from dens of suspected villainy into incubators of noble ideas that can be used to advance the greater good, such as protecting the atmosphere?
Carbon markets, carbon pricing, and other financial innovations (including new forms of insurance, bonds, investment funds, and indices) are part of this revolution and a simultaneous reprogramming of the financial workings of the world so that inanimate black‐red ink balance sheets no longer function in an isolated arena undefined and unscrutinized by the needs of people and the planet. At the heart of this rebooting process is price.
Capitalism and finance are nothing more than the motor systems of pricing and valuing—who pays for what and how much based on a perceived value, or, in simplistic terms, “The value of a thing is what it will bring.”
Now though, as we face expanding environmental and social risks, there is a paramount need to use price to value and shield the assets that invisibly, for the most part, underpin our well‐being. Pricing makes an asset visible, illuminating the value of saving and protecting it, and the cost of losing it. Either we come to terms with the actual chain of value of natural resources and other intangible essentials and account for them literally and figuratively in our economic system, or they will slip away because we undervalue them, allowing them to be spent by the lowest bidder for lack of appropriate financial recognition.
In short, we may have to accept that there is a financial price to be assigned to the so‐called “nonfinancial goods” we love and need most, and that it is neither immoral nor shameful to do so. On the contrary, pricing the priceless may be the only practical solution to resolve increasingly unfathomable contradictions.
For example, why do our capital markets value companies such as Uber, which offer merely on‐demand service we can live without, in the billions of dollars, but our atmosphere, on which all life depends, at zero?
Why do we place an unbridled financial premium on ocean‐view property but treat the coral reefs that protect that property from catastrophic storms as financially worthless?
Why do we value our infinitely scarce freshwater so low that we are free to blast and contaminate it as we force it underground to release natural gas in the hydrofracking process, only to then burn the gas with scandalous energy inefficiency?
Only pricing the priceless can redress these destructive patterns by transferring bookable financial value away from what is mostly extractive or exploitative and toward what is vital, and irreplaceable. This move redefines the essence of profit and loss and brings to light what truly supports reliable and worthwhile economic investment: natural assets.
In turn, if capital markets reward coherent risk management and resource stewardship of those assets in higher credit ratings for public entities, for example, then those entities are in turn recognized as more financially and reputationally sound, able to perhaps borrow favorably to meet other pressing needs, or even reinvest in natural asset protection.
In this sequence, pricing the priceless translates the natural capital of clean water or standing forest into bankable collateral, as compared to short‐term raw material. If clean water and other natural resources enter the financial ledgers of public budgets as vital assets, then by extension public funds can be commanded to care for and protect those assets commensurately. After all, assets are generally treated as prized and nonexpendable.
Once these assets have a notable value, protecting them becomes logical and better understood by taxpayers, who might otherwise think of environmental protection as dispensable, a costly frill that can be put off because its value comes tomorrow, not today. Pricing the priceless captures financial prominence for natural assets that are otherwise mere footnotes on the books.
Moreover, momentum is with us as disparate forces converge to confront and disrupt enshrined financial presumptions. First is the evolution in the global economy away from traditionally valued tangible goods, such as manufactured products, to the valuation of intangible goods, such as brands, apps, intellectual property, service industries, and basic research and development. This transition reset the econometric comfort level that intangibles can be expressed in tangible pricing and serve acceptably as wellsprings to economic growth.
Second is the intensifying skepticism that conventional economic practice works for the general good. There is heightening awareness of economic inequality with plenty of backup data, thrown into stark relief by the COVID‐19 pandemic that exposed just how many people live at the economic precipice. Public yearning for justice and credible institutions feels ready to combust and increasingly does, typified by the “yellow vest” protestors who set fires to grand boulevard cafes in Paris in 2018 to vent anger at higher taxes, including carbon taxes. In 2022, according to the Carnegie Endowment for International Peace, economic protests “soared” worldwide, largely driven by inflation and recession worries.
Third, there is compounding evidence and increasing recognition that environmental problems are urgent, especially climate change. Numerous polls, surveys, and voting patterns worldwide confirm that people, especially those under 40, want action on climate change, clean energy, and social progress. The annual UN conference on climate change held in November 2021 in Glasgow, COP26, was nearly brought to a standstill by activist protestors pressing for governments to act more decisively. In November 2022, the host government of COP27, Egypt, cancelled some public programs due to security worries.
Meanwhile, extreme weather events continue, and communities are left alone to cope; for example, in the United States in 2021, the failure to prepare was so blatant that the whole city of New Orleans lost power after a single catastrophic storm, and extreme monsoons in Pakistan in 2022 left most of the low‐lying country underwater with no rescue plan. Global anxiety mounts.
Fourth is the emergence of alternative ideas about what backs up money as legal tender. Seemingly overnight, there is expanding use and consideration of intangible, even libertarian, digital currencies such as Bitcoin, Ether, iWallet, Alipay, NFTs, digital yuan, maybe even digital US greenbacks, not quite dismissed by the sitting head of the US Federal Reserve in 2022, Lewis Powell. If transactions of once‐esoteric homemade digital currencies are credible and acceptable, why not a water bond or carbon credit resting on the underlying value of lasting environmental health?
Fifth is a surprisingly broad wake‐up among mainstream asset managers, bankers, and asset owners to environmental, social, and governance (ESG) risks as financial risks and, on the other hand, that money can be made, not lost, by investing to minimize them. Global uptake of ESG investing concepts proceeds rapidly, and new metrics and investment vehicles are being invented, tested, and applied.
Sixth, there is a tidal wave of money seeking purpose, accompanied by huge intergenerational turnover in wealth and attitude. By 2030, according to Wealth X, about $18 trillion will change hands, about 60% of that in North America alone. Research firm Cerulli estimates global transfer as high as $84 trillion by 2045. In 2020, research by Barclays Private Bank reported that “investing for both financial returns and with consideration for its impact on the world has been gaining momentum for some time. … This is led by the children who are positively influencing their parents on ethical and social investment matters … most of the patriarchs and matriarchs of high net worth families (59% of 40–60 year olds and 68% of over 60 year olds) say that their children have taken the lead on ethical and social investment matters for the family.” In 2022, the Schwab Modern Wealth Survey found that 79% of millennials, 82% of Gen Z, and 70% of Gen X used “personal values” to guide their investment decisions. The 2022 Bank of America Private Bank Study of Wealthy Americans found that investment in ESG vehicles had doubled in 2018, with 73% growth among millennials.
Finally, these tendencies amount to major financial genre blur, to match so many other genre blurs rippling through society. For‐profit and nonprofit financial motivation are gradually resembling each other, and stewards of capital can no longer be proud to brag about raw financial gain alone.
So, taken together, these trends will catalyze a significant financial disruption where outdated models and economic presumptions are wholly replaced. No longer just a matter of personal moral stance or choice, the need to examine why and how money is applied grows encompassing.
The social, environmental, and economic challenges are complex, with evident moral and even spiritual dimensions. Yet they have no chance of solution without fresh credible and productive new scrutiny of what we value as assets.
The stakes are vast and high. Estimates of the unbooked value of nature in conventional global economic ledgers have been as high as $125 trillion per year—more than global gross domestic product (GDP). In other words, unpriced priceless assets can lead to astronomical value squandered because we are blind to it.
Achieving the new dynamic of pricing the priceless taps both philosophical and practical concerns. But what does that mean?
Nature and natural resources do essential physical work for us but do not get paid a penny, like lowly free laborers. Trees and grasses hold the surface of the earth together but have been valued almost only when cut down as lumber for products and building. Crops are grown year after year and sold, but the soil that makes agriculture possible is paid nothing. Coral reefs slow down the waves of the sea to protect the coasts, but earn no direct value recognition themselves. Swampy wetlands filter poisons and dirt from our water, also for no fee.
Since nature provides these and myriad other services at no cost, we have become used to a take‐what‐you‐can approach. Result? Pollution, degradation, climate change, and a false security that nature's services will never cease to function no matter how much insult we deliver.
Yet in the end, all financial profit depends on these priceless services, termed “ecosystem services,” invisible, quiet, and now in trouble, because without these services, economies cannot function with predictability or foresight, and goods cannot be produced.
But how to pay nature, and who will pay?
The most cosmic free laborer of all is our delicate and exceedingly thin atmosphere, providing not only all our breathable air, but also hosting our weather patterns and deflecting the burning heat of the sun, overall making life on earth possible. Yet our financial systems place no value on atmospheric functions. As a result, we have indifferently crowded our atmosphere with greenhouse gas emissions, unavoidable by‐products of burning the fossil fuels like oil, gas, and coal—themselves incomparable natural assets—that made modern industrialization possible. But, on the way, the buildup of fossil fuel emissions trapped solar heat and catalyzed major climate disruptions to wreak havoc.
To try to reverse this process and better value the atmosphere, carbon markets put a price on using increasingly rare space in the atmosphere for greenhouse gas pollution, The more space you occupy with pollutants, the more you pay, in theory, so the incentive develops to take up less space (i.e. pollute less). But this simple carbon market premise has been suspect because it treats the atmosphere like real estate and because of the long‐prevailing view that capital and the methods of capitalism cannot have the greater good at heart. That is why Pope Francis found carbon markets distasteful.
Indeed, pricing the priceless can be morally risky, for it can also demean our most revered invaluables, labeling them as mere commodities, subject to fluctuation, speculation, gouging, or cheating.
Because there can never be sufficient money to buy back a priceless item once it is gone, any pricing system intended to protect the priceless can never truly set the price high enough. So how do we price what is beyond price?
Such is the vexing and inescapable paradox of our current economic lives. Addressing climate change is entwined in that paradox. It requires that we assign a tangible value to those intangibles that make up the aptly named global commons, the transcending intangible of our time. Reconciling these irreconcilables fairly for all people is perhaps the emerging purpose of the economy itself. Are we up to it?
Capitalism is a dogma, but anti‐capitalism can be equally dogmatic. To stem climate change and other problems, we must perhaps suspend moral judgments even as we are compelled by moral commitment. At least until miracles happen.
We can keep faith with preconceptions, or we can throw them off.
I am no apologist for capitalism, for its ugly ills and ill results are as visible in human history as pricelessness is invisible. In some ways, contemporary capitalism has become a caricature of itself, spreading as much poverty as wealth, directing investment to the reckless extraction of minerals and fuels, rampant shearing of forests, paving over of wetlands, and countless other dubious projects. Yet it is also possible that capitalism can right its wrongs, and I am open to optimism instead of complaint and despair.
Also, finance should not be an exclusive province. Perhaps the fact that finance has been left only to financiers to interpret accounts for public doubt that finance serves other than to make the rich richer, all the more in the aftermath of the ostentatious and self‐centered Trump era in the United States that left the idea of common good in shambles.
People across all social groups and ages are in a tailspin, wondering where they fit in the economic engine. Still, most do not realize that a main cause of our distress is that intangible priceless assets have had no champion in our economy. Greed is easy to blame for waste and inequities, but we can get beyond that fallback to the root and remediable causes—faulty measurement and valuation.
There are trillions of dollars sloshing around in our world looking for useful application, and we can capture them for the betterment of all. However, this requires a clean lens: a vigilant lowering of our doubts and raising our tolerance for ambiguity. The idea of pricing the priceless will influence where tides of money flow, with the potential to convert massive amounts of capital from “bad” uses to “good.”
To price the priceless is to bridge the tangible and intangible and embark on a breakthrough that will dictate the prosperity and well‐being of everyone, everywhere—a brand‐new look at what we value and how.
The titanic battle is not merely between the politics of left and right, or free markets and their alternatives, but between private and public interest more broadly, a battle expressed in pricing.
Pricing the priceless answers a critical question of rising personal and social inspiration: in our tense and cherished world, what is money for?
2Marooned: The Island of Wrong Things Measured
I am writing this in the sun, because I want to. I crave the warmth and the angle of view to the vast glassine lake below.
I am not alone. Smoke rises from a brushfire not far away, set by a worker clearing away dried leaves from a garden that is otherwise perfectly groomed. It is a brushfire to create both food and beauty.
Bells ring bronzed tones from belfries of stone churches built by hand at least five centuries ago.
Ferry boats cruise like toys on the blue water, up and down between towns and villages, carrying people of all ages and races to work or holiday in a rhythmic medley of busy human transaction. The boats glide on the surface of the deep lake, gouged by retreating glaciers about 10,000 years ago, the ice claw instigators of everything I see.
What is it worth? The beauty, the enterprise, the time in evolution, labor, and human history, the fuel spent in the boats, the drinkability of the water, the sweeping panorama of the lake, the water held in the flowers and the soil, the seeds carried by the birds who land here from all over and fly all over too, the snow on the peaks melting and giving water back, the pleasure of it all? I can run out of time and space listing what I see in just one sitting, starting with the fact that I came outside for the warmth.
Did the sun start it all, this cascade of value that nevertheless has known no price?
Maybe if we could price the sun, that would cover all the rest, and we would not have to price the other details, down to each fuel tank and tourist trinket sold, to come up with a dollar value of all the elements of nature in my view, so many things that for too long have been left out of conventional calculations of value and cost, considered external to the core.
What is that sun worth?
If we knew that value, would we pay for it? Could we? Conventional economic study cannot answer these questions, even though its very purpose is to measure and express the value of objects and ideas in monetary terms all can understand.
And perhaps so much the better, for that which makes us human is precisely that we do not reduce ourselves to tangible measurable components, that we can embark on the uncertain voyages of living that we value but cannot say why or how much, such as falling in love, having a child, taking walks or a deep breath, or listening to the reassuring sound of our own heart beating.
Indeed, what does priceless really mean? We all may have our definitions, but surely something priceless cannot be re‐created as it was originally, once it is gone. Something rare and easily lost, a loss the depth of which we can never accept, that goes on forever. Something that defies the familiar expressions of money. And something of which we might take little notice because there is no price on it. All that money cannot buy?
To be human is to live by the beacon of pricelessness, even as the forces of economics, bankers, and capitalism have pressed to reduce all of living to the short‐term formula of tangible costs and profit, captured in the wholly inadequate symbol of price. This conventional view of ascribing value has most especially left out the value of the forces and gifts of nature, for the value of the planet has also been beyond our capacity to express, given all the services it provides us in phenomenal forces, resources, magisterial beauties, and countless mysteries, the stripes of the zebra, the perfect petals of the rose. What amount would we deposit in a bank to pay for all this? There are no banks, bills, or price tags sufficient for the job.
That earthly delights come mostly free of charge has been their undoing, and for decades new‐thinking economists have tried to redress this pricing dilemma and take integrated account of environmental costs and benefits in the fundamental formulas, balance sheets, and calculations of economic value. Despite repeated effort, though, moving from theory to practice has been plodding and slow. Too anomalous, and outlandish, even outsider, literally.
“Externalities,” economists have had to call these things for which there has been no accounting and no clear method to conventionally price. Booking the unbooked, in fact, has been the raison d’être of the field of environmental economics; even the US National Academy of Sciences had examined prospects for national environmental accounting in 1999 in the ambitious report “Nature's Numbers,” but nothing came of it.
Given new environmental urgency, in spring 2021 the UN announced an updated framework to value unexploited natural resources in the UN's official System of Environmental Economic Accounting, referenced by about 90 nations to supplement other national economic measurements. In the United States, the Biden administration catalyzed a similar resurrected effort, with results announced in January 2023. But 15 more years of work were projected by the highly detailed analysis involving all US government departments, including the US Office of Management and Budget. The report concluded, “By 2036 there is high expectation both domestically and internationally that the United States will incorporate the environment and nature into economic decision making.”
At this pace, far‐sighted efforts remain frozen policy abstractions, distant from the public's day‐to‐day understanding of why such changes matter and still truly external to the actual national econometric planning and budgeting that determine how public money is spent. The direct and indirect benefits of clean air and water, especially the atmosphere, have been the quintessential externalities.
To this list of environmental assets we can add good health, social coherence and harmony, educational advancement, safe streets, reliable fire departments, arts, and culture. These are the services and supports the so‐called nonprofit sector provides that keep the rest of the world whole and functioning. They add meaning and pleasure to living, reinforcing it all, but are still so easy to label as extra, dispensable items to starve for funding when time comes to decide public budgets and allocate tax dollars.
What would happen if we could at last bring these so‐called “externalities” into the countinghouse of our economic system and make them visible in quantitative terms, so we could better gauge their true worth, heighten their value, and shield them from trivialization and harm? This disruption of the financial status quo would be heroic, sparked by the idea of pricing the priceless.
Otherwise, we risk just getting more accurate at tracking planetary resource demise, and we ought not be so slow at improving our economic decision‐making that we can no longer benefit from those improvements. The transition should be well within our modern economic know‐how, since we have jumped from the industrial age to the IT age in a flash, able to ascribe enormous cash and market value to much we cannot see or touch, as examples such as Uber make vivid.
When the new car service was just barely up and running, I was in San Francisco with colleagues eager to show me Bay Area hospitality. After lunch al fresco, they offered me an Uber ride to my next stop. Zip. They gleefully tap‐tapped their iPhones and ordered a car. Zip, zip. “Do you want to watch it coming?”
The polished phone screen presented the now familiar miniature perfectly delineated streetscape and, clearly threading along, the little bug icon of a car, headed to the A spot on the map—me. Countdown: 9 minutes, 8, 7—be there soon. Then, whoosh. The cyber‐bug car reached “A” just as the real car swung into the real street and I was off in my Uber.
Soon enough, Uber, the company, was a darling of the world's financial markets, expanding globally and raising fistfuls of capital. Uber already had a market capitalization at its outset in 2015 of about $60 billion, in the same realm as the market value of General Motors, which actually produces cars and other material goods.
Yet the value of Uber, like that of WeWork and other shared‐economy new‐model IT businesses, is largely the perceived value of disrupting legacy pre‐IT‐age systems, and consumer demand for novelty. Uber creates nothing new, embodies a digital nothingness, produces little but right‐now satisfaction, and is indirectly subsidized by its drivers, who use their own cars driving. Yet in late 2020, fueled in part by the results of a referendum in California that exonerated Uber from complying with various protective labor laws, another form of indirect subsidy, the value of Uber had climbed to $78 billion.
Our atmosphere, by contrast? Zero has been the cash value of the atmosphere by any current means of bookkeeping or conventional economic theory, even though life on our planet would be impossible without this premier omnipotent intangible.
No money can buy the atmosphere or re‐create it. It is so rare and limited that an American astronaut reportedly said that seen from the space shuttle far above, the thin halo of atmosphere was in the same relationship to the earth as peach fuzz to the peach.
The value of our atmosphere lies outside any chance of pricing it, so we became atmospheric gluttons. It is this wild consumption that has brought us face to face with the ubiquitous challenge of climate change, seemingly intractable.
As we know, climate change is triggered by the buildup in the atmosphere of notorious greenhouse gases, heat‐trapping by‐products of combustion of coal, oil, and gas. These easy‐burning fossil fuels made the Industrial Revolution and industrial wealth possible, powering factories, cars, motorbikes, ships, planes, anything that runs on electricity or gasoline, and virtually every aspect of modern economic progress anywhere.
All enterprises cause emissions directly and indirectly, and so does meeting most human needs and desires. We became enthralled with fossil fuels, and we cannot be blamed for that, for there they were, decaying primeval organic material loaded with carbon, underground for millennia in Jurassic pools and rock formations, as if waiting there for us to find one day. The fuels were so plentiful and expedient to burn that the richer countries indulged themselves lavishly for the last half a century or so and then all poorer countries began to do the same.
People cannot escape poverty without using energy, and fossil fuels have been the easiest fuels to use. The awful irony of our modern industrial world, though, is that its success has rested on converting our natural endowment of carbon‐based substances from safe to unsafe. Almost all modern economic progress derives from tearing out those substances from deep below, forcing them to the surface, blazing them willy‐nilly, letting their gaseous by‐products waft into the air such that they now must be removed from that air, perhaps even injected as gases underground again where the cycle started in the first place.
Preposterous but true—all our industrial economic growth has depended on our putting up into the atmosphere that which we now must bring down.
Spending nature madly, we must now un‐spend it.
That society is not necessarily fated to overspend nature and, on the contrary, that people innately understand the importance of managing shared resources were key and pioneering research themes of political scientist Elinor Ostrom, the first woman to win the Nobel Prize in Economics. In 2009, she was recognized along with social scientist Oliver E. Williamson for her work on economic governance of common resources and her lifelong cross‐cutting study of how communities can protect resources they understand and perceive to be of common benefit. In fact, Ostrom's early book Governing the Commons: The Evolution of Institutions for Collective Action, published in 1990, directly challenged the more pessimistic view of “the tragedy of the commons,” which suggested that because resources are finite, people would be bound to act in their self‐interest rather than the common interest, leading to resource exhaustion.
In her Nobel lecture, Ostrom reflected, saying, “The most important lesson for public policy analysis derived from the intellectual journey I have outlined is that humans have a more complex motivational structure and more capability to solve social dilemmas than posited in earlier rational‐choice theory. … I argue that a core goal of public policy should be to facilitate the development of institutions that bring out the best in humans.”
