A new initiative from the Biden administration is developing an economic model that would put a price on preserving natural resources.
Announced last week, the plan to "put nature on the [nation's] balance sheet" means that the U.S. is joining a growing number of countries that are re-examining the way health and natural resources are valued as part of a nation's wealth.
The effort could result in a re-ordering of financial principles that have underpinned world trade for centuries.
"Our planet’s water, soil, air, and other natural assets play a critical role in sustaining and powering our economy — from supplying the food we eat, to supporting critical supply chains, to spurring innovation and providing recreational opportunities, and more," the plan's author's wrote. "The challenges of climate change, pollution, and environmental injustice carry implications for the economy, the environment, and public health that Americans across the nation have been experiencing for decades. Yet, the data we rely on to describe and measure our economy are largely disconnected from the realities of the natural world. This disconnect in data prevents us from reaching our full economic potential while protecting the environment, and ensuring future opportunity for Americans."
Since the Arawak, Taino, and Lucayan peoples first encountered Italian explorer Christopher Columbus and his Spanish ships, extractive capitalism has been the bedrock of the American economy -- and economics globally.
But a growing list of nations are trying to develop new models that put the preservation and restoration of natural resources on equal footing with extractive industries.
In February 2021 the United Kingdom published a 600 page landmark study called the Dasgupta Review, named for its author, the Cambridge economist Partha Dasgupta.
The study found that human development was destroying the natural resources that made progress possible in the first place.
"We have failed to manage our global portfolio of assets sustainably," Dasgupta wrote. "Estimates show that between 1992 and 2014, produced capital per person doubled, and human capital per person increased by about 13% globally; but the stock of natural capital per person declined by nearly 40%."
And the pace at which we're accumulating wealth is costing us the entire planet. "While humanity has prospered immensely in recent decades, the ways in which we have achieved such prosperity means that it has come at a devastating cost to Nature,"" Dasgupta wrote. "Estimates of our total impact on Nature suggest that we would require 1.6 Earths to maintain the world’s current living standards."
The devastation is visible all around us. Animal populations dropped by an average of 68% since 1970, according to a 2020 World Wildlife Fund report. Over the last one hundred years, humans have deforested land roughly the size of the entire United States.
The first American economists proposed putting a value on natural wealth in the early parts of the 20th century
U.S. economists Irving Fisher and a little known academic named Alvin Johnson both floated the concept of natural capital back in the early 1900s.
The idea that natural capital and wealth exists alongside the artificial wealth created through human industry may sound obvious, but it provides a framework for re-evaluating how much conservation is worth -- potentially enabling a way to charge and pay for preserving resources rather than exploiting them.
In the 1960s, the Presidential campaign of Robert Kennedy crystallized the critique of existing economic practices in a speech just days after Kennedy announced his bid for the oval office.
Kennedy, who was assassinated during the 1968 Presidential campaign, made the re-evaluation of wealth a pillar of his platform.
"Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl," Kennedy said in a speech in Kansas just days after announcing his candidacy. "It measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans."
Now, over fifty years later, the White House Office of Science and Technology along with the Office of Management and Budget and the Department of Commerce, is picking up the thread of Kennedy's argument.
"The path articulated in this Strategic Plan treats nature as an asset and incorporates these natural assets on the national balance sheet," the Biden economic team wrote in its draft. "These accounts and statistics can work alongside traditional economic statistics, such as GDP, to help guide economic decision making to be more inclusive of the services—or benefits to humans—nature provides."
Once it's enacted the National Strategy will produce new data that account for the country's natural assets and how those assets are either being restored, maintained or depleted. The goal is to include these natural assets in accounting for a new kind of gross national product. And one that does a better job of measuring what Kennedy called "that which makes life worthwhile."
Or... as the National Strategy puts it... "a more complete view of our economic vitality and progress—one that appropriately reflects the fragility and value of nature in supporting it."