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Culture War Roundup for the week of December 4, 2023

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The SEC has proposed a new type of company, a Natural Asset Company (NAC.) As the main proponents, Intrinsic Exchange Group, state:

By taking a NAC public through an IPO, the market transaction will succeed in converting the long-understood – but to-date unpriced – value of nature into financial capital. This monetization event will generate the funding needed to manage, restore, and grow healthy ecosystems around the world and bring us closer to achieving a truly sustainable, circular economy.

While there are also criterion for farmland and mixed use lands to qualify, it sounds like they expect the public to buy shares of land to pay the owners to not develop it in certain ways. I'm not sure how popular this idea will become. Carbon credits are a thing so there might be some buy-in from the public.

Margaret Byfield at Real Clear Markets takes a dimmer view of NACs:

The best comparison would be using the air we breathe as a cryptocurrency of sorts. And, these natural assets that collectively belong to all of us would now belong to corporations run by what many would call environmental special interests.

Based on just this first sentence, I'm not sure she knows what a cryptocurrency is. Maybe she means it will be subject to a speculative bubble. However, the consequence that most concerns her is that other countries could own stakes in our Natural Parks:

Another feature of these new companies is that the land belonging to sovereign nations and private landowners alike can be subject to the control of NACs. Sovereign nations, such as the United States Government, can provide their lands to private investors, including those outside the United States. China, for example, may be able to invest in an NAC and effectively be a stakeholder in our national parks. Russia could assume control of lands currently leased to produce oil and place them off limits for future natural resource development.

Both supporters and critics seem to think that an NAC will be big deal. The IEG believes that, "The financing gap for biodiversity is estimated between US$598-824 billion per year, for climate change about US$5 trillion dollars per year, and for the transition to a more sustainable, resilient, and equitable economy, orders of magnitude larger."

But I have a hard time conceptualizing how a NAC will tap into all that wealth and power. What is the expected impact for the average Joe and for international politics? Will I no longer be able to "breathe the free air," as real life starts to resemble the Lorax movie? Will foreign countries strategically buy land and prevent Americans from accessing resources?

A NAC’s business model is to actively manage the licensed area, which includes activities that generate traditional cash flows (e.g., revenues from carbon credits, crops, fisheries, ecotourism). In addition, NACs will support the generation and growth of ecosystem services that, while not currently monetized, can be valued via a market transaction and considered as part of the overall value of a NAC’s equity.

Nature’s Non-Use Value – The less tangible inherent value of nature, including people’s value for species and ecosystems in and of themselves. This category includes:

Bequest Value – The value of preserving nature for future generations.

Existence Value – The value people place to ensure the continued existence of ecosystems and/or the species that live within them.

This is very strange to me, how can you measure these things that are explicitly non-economic? It's like expecting economic returns from a charity, a fundamentally different concept to a corporation that exists to make money. If you want to preserve the environment, legislate restrictions. Don't try to marketize things that don't produce returns like ecosystem services, that's a recipe for unintended consequences. What happens once some company releases tens of millions of bees and demands to be paid for all this pollination (far in excess of what is needed) even as they damage whatever ecosystem they're in?

This is very strange to me, how can you measure these things that are explicitly non-economic?

Presumably by measuring how much people will pay to have them?* In other words, how much in taxes or fees people are willing to pay for a national park, a normal park in their neighborhood, for avoiding industrialization and so on.

I suspect that's the point of the NAC, to find out that value.

*when there's an actual risk of them being taken away

What happens once some company releases tens of millions of bees and demands to be paid for all this pollination (far in excess of what is needed) even as they damage whatever ecosystem they're in?

Do your best to compute net impact, and if the benefits of pollination are exceeded by the damage, fine them for the cost?

At any rate, I'm not opposed in principle to NACs, even if I'm cynical on their outcomes or the intentions behind many advocating for them. From a libertarian perspective, I think that if people want a say in what people do on private land, such as wanting your neighbor not to build a high rise next to your bungalow, they should be willing to pay them off instead of restrict their rights legislatively. There are cases where more general externalities hold, such as for pollution, but for mere aesthetic preferences, my preferences are "fuck you, pay me".

From a libertarian perspective, I think that if people want a say in what people do on private land, such as wanting your neighbor not to build a high rise next to your bungalow, they should be willing to pay them off instead of restrict their rights legislatively.

You are perfectly free to build a high-rise beside my bungalow, it's your land and I don't get to say what you can do with your own things.

By the same token, I am perfectly free to hold our brass band practice sessions in my living room at 3:00 a.m. just when you got your colicky baby off to sleep. You can't tell me what to do with my own things on my own land.

Or the pair of us could agree not to be assholes and try to find a compromise where both of us get to enjoy what we possess without inconveniencing the other too much.

(Libertarian arguments do seem to have the flaw of swerving too easily and too soon into "I have the right to be an asshole so long as I don't step one inch off my own possession, and you just have to suck my chocolate salty balls, loser").

You are perfectly free to build a high-rise beside my bungalow, it's your land and I don't get to say what you can do with your own things.

I don't think there is a right to have an unrestricted view of the horizon. If you want to buy the air above my land in order to preserve your view of the horizon, then of course that's fine. And you can sue the "economically disadvantaged" "urban youths" who move into my apartment building if they trespass on your land or play their boomboxes too loud.

By the same token, I am perfectly free to hold our brass band practice sessions in my living room at 3:00 a.m. just when you got your colicky baby off to sleep. You can't tell me what to do with my own things on my own land.

Noise loud enough to extend onto someone else's property and interfere with his enjoyment of that property is a valid subject of a lawsuit, I'm pretty sure.

What is and is not a valid basis for a lawsuit is a political decision, just as whether or not you can build a high rise next door is a political decision. There's no principled difference.

Fortunately I am an unprincipled person and happily say that I want the high rise and not the noise.