In the spotlight

In the spotlight 1

The “Green economies” narrative needs to be stopped

We are living in a time where Mother Earth is struggling to sustain life, faced with financialised capitalism. A system where our earth and all life on it—underneath the ground, in forests and seas, as well as care and health in our homes and communities—is being turned into a commodity for corporations and the finance industry to profit from. This logic is permeating the three United Nations “Rio” conventions[1] which were set up to stop the existential threat faced by humanity from climate change, biodiversity loss and desertification.

Climate justice movements have long demanded that those most responsible for the climate crisis—historically industrialised countries, and wealthy classes within them—must provide the necessary resources to help solve it. Finance is one crucial part of a demand for climate debt and reparations. Yet, despite research showing that climate finance is needed in the trillions, not even 100 billion USD of real, public, democratic finance has been mobilized. Instead predatory private finance has stepped into the gap, with an array of new and bewildering financial instruments such as payments for ecosystems services, carbon banks, carbon credits, nature based offsets, and debt for nature swaps. Some banks hope that the voluntary carbon market, where financial actors can buy, sell, trade and speculate on carbon, will reach 1 trillion dollars by 2027, yielding mega profits for investors.

Meanwhile the new global biodiversity framework has called for 200 billion USD of biodiversity financing to be mobilized by 2030 and some are pushing for biodiversity offset markets. Like existing market-based climate finance, these will be characterised by “blended finance” where public money is used to “de-risk” investments (ensure “adequate” profits for private financial actors). New mechanisms like debt for nature swaps allow countries to effectively sell their protected territories to banks and the big conservation industry in exchange for debt restructuring. These are termed “innovative”, but the only innovation is to squeeze more profit from a dying planet when investments in extractive industries are being challenged, and to hand over control of ever more land and ocean territories to private financial investors without democratic oversight. Initiatives like the UN’s 30X30 commitment, to conserve 30% of Earth’s surface by 2030[2], are being implemented in ways that drive dispossession of communities and create new forms of corporate profiteering.

The normalization and expansion of these approaches, which many see as beneficial, poses profound dangers to people and the planet.

  • One, the financial sector is looking, above all else, for returns on their investments. This means that in many cases local communities are expelled from their lands, fishing grounds, and territories, to enclose them for lucrative carbon and conservation projects. Sometimes traditional practices of local peoples that store carbon and protect biodiversity are monetized, with the majority of any profits going to investors. Often violence is used to enforce dispossession: from private conservation militias or from police and armies of states who align themselves with corporate profiteers.
  • This deepens the power and reach of the very same actors who are responsible for the destruction of the earth and human rights injustices via their huge continued investments in mining, agribusiness and fossil fuels. It promotes the idea that profits for these corporations can continue while they pretend to “save” the planet. It does nothing to stop the crisis of corporate control, extraction, profit and over-consumption that is driving the crises.
  • By changing the narrative towards “green economies”, it shifts it away from the binding regulations and policy changes that our movements have been fighting for, which are needed to stop climate chaos and the collapse of biodiversity. It de-politicises questions of democratic access to and control of land, water, resources and territories by advancing a false narrative of a “triple win” (people, planet, profit), which stops us from asking who is paying the price, and who is reaping the profits, from these interventions.

We must stop the rise of the new financial-corporate-green complex. People who live on, with and from land and territories, communities of the global South, and working people all over the world have borne the cost of our current destructive capitalist/neoliberal economic system. In order to avoid repeating this, they must have power and control in the transition. Concretely this means we must demand an end to debt, fulfilment of promises for public climate and biodiversity finance, full respect for the human rights of peasants, Indigenous peoples, and other affected communities, and reparations made through popular and democratic channels.

In the spotlight 2

Confronting “Blue finance”

Over the past decade, international strategies for ocean conservation have changed radically. Increasingly, conservation projects are based on raising money through financial markets and are, therefore, intended to provide investors with profitable returns. Many refer to this as ‘blue finance’. International support for this is growing, and it is considered a critical way to bridge an imagined funding gap to save marine biodiversity. What can be understood as the financialization of conservation has produced so-called innovative financial instruments, including blue bonds and debt for ocean swaps.

Blue bonds build on an earlier wave of so-called ‘green’ or ‘social’ bonds. The basic premise is to raise capital in the international bond market but with the stipulation that the money is spent on green and/or pro-social outcomes. The obvious question is who defines what is green and social, and who checks that the money has been spent on green and social issues? This is deeply contested. In 2018, the World Bank helped the government of the Seychelles issue the world’s first blue bond. That was described as a bond intended to support ocean conservation and the development of the blue economy. In reality, it is an example of what is known as ‘blended finance’, where public funds (i.e. development aid) are used to facilitate investments from the private sector.

The basic idea behind a debt swap involves a creditor (the organisation that has lent money to a developing country’s government) agreeing to forgo a portion of what is owed to them. The savings this generates for the developing country are then redirected to conservation. That seems straightforward. However, the mechanisms involved can be highly complex, and each debt for nature swap is unique in how it is structured.

Blue finance is considered in its early days. However, already US conservation organisations, led by The Nature Conservancy, have refinanced over $2.5 billion in debt for ocean swaps in just five countries. A blue bond is also being pursued for the Great Blue Wall Initiative by the UN.

Despite international support for blue finance, where it is closely aligned with global ambitions for the 30×30 biodiversity target, there are several reasons why blue bonds and debt swaps pose risks to small-scale food producers. They can be opaque financial transactions that manipulate the debts of Southern countries, leading to a transfer of wealth and power to unaccountable US conservation organisations, now working in close partnership with investment firms and the banking sector. They further entrench the reckless view that saving nature must produce never-ending profits for the private sector.

A lack of finance is not the root cause of the biodiversity and climate crisis. These are crises of affluence and short-term profiteering, which are existential problems driven by poorly regulated global financial markets. Lasting solutions that promote livelihoods and food sovereignty must, therefore, come from political and cultural change, not through manipulating debt.

Read more about blue finance here.

[1] I. United Nations Framework convention on climate change II. The convention on biological diversity III. The United Nations convention to combat desertification.

[2] An example in In the spotlight 2, newsletter no. 46