We live in an unprecedented time where our economy seems to take the center stage of in our lives. Unfortunately our economy is constructed in a way that is simply incompatible with our ecology. You could say that the system, and all of its moving parts, have been poorly designed. What if we could redesign the system to work for humanity and this planet we call home? How can we truly value our biosphere before we lose it forever? And how would a currency for the environment work?
For decades, economists have argued that prosperity requires growth, with environmental damage as the regrettable but unavoidable consequence. Though new voices are emerging, it seems like we have been listening to the same story for some time now: keep shareholders and owners happy by maximising profits at all costs, often planning in the short term and ignoring long term consequences. Lucky for companies, they never have to pay the full price of their business thanks to a thing called external costs or externalities. That is, they are external to the cost of business and can be negative or positive but work in favour of the business and affect a third party (e.g. citizens). For example a negative externality is the creation of air pollution through burning fossil fuels. A positive externality on the other hand is carbon sequestration by trees. This is where trees take carbon out of the atmosphere and store it for a long time.
If you think about it, our environment is like an angel investor in the global economy, secretly supporting many industries. For instance, the global pharmaceuticals industry is worth billions of euros but few know that up to 50% of this market is based on the genetic diversity of wild species. Forests are another great example of nature’s secret investment into humanity. Not only do forests store carbon, they also provide medicine and food for us to consume, can protect our cities from natural disasters and are home to thousands of other creatures, many not even discovered. And yet we only value the forest within our economic system when it is cut down and turned into a raw material.