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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?

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.

Do we have to convert every fucking thing in the world into dollars and cents? "Oh, you like looking at the sunset, well now that'll cost you!"

I understand trying to fundraise for conservation and environmental purposes, and using novel methods to do that; I even understand appealing to greed to motivate good causes, but for the love of God: a securities exchange flat-out putting "monetization" into the pitch is too on the nose about "you will live in the pod, you will eat the bugs, you will own nothing, and you will be happy".

I also don't trust "private investors" to give two hoots about "oh yeah so we swore cross our hearts that we'd never develop the land we bought, but that was before [valuable resource] was discovered on/in/under it". If they can't develop it themselves, they will find some loophole to sell it on to someone who will, and good luck with "but you promised!"

EDIT: Swipe me pink, they really do include "you like looking at nature" in the list of things to be assessed for economic value:

Step 4. Identify Ecosystem Services and Conduct a Preliminary Assessment of Their Relative Value

FLOW OF NON-USE VALUES
38 ECOSYSTEM AND SPECIES APPRECIATION/EXISTENCE/BEQUEST
Ecosystem and species appreciation concerns the well-being that people derive from the existence and preservation of the environment for current and future generations, irrespective of any direct or indirect use.

Yeah, we're all going to have to pay into the tree museum to see the trees.

Do we have to convert every fucking thing in the world into dollars and cents? "Oh, you like looking at the sunset, well now that'll cost you!"

Most of the time, sunsets are public goods, because it is extremely difficult to generally prevent people from observing them and your observing it does not impinge on my ability to observe it. Obviously, if people think there is a One True Best Location for observing a sunset, but like only ten people can fit there, then it becomes rivalrous and probably excludable, too. At that point, there's going to be some mechanism that meters who can use that particular location at sunset, whether it's people having to spend time by showing up two hours before sunset to grab one of the ten spots or people having to spend money to grab one.

It is also very common in development disputes to contest visual obstructions. If someone wants to build a high rise, but it will block the view of the sunset for a group of folks who used to be able to see it, the building will be contested. Here, the traditional solution is to, again, convert the dispute into dollars and cents, having the developer pay the obstructees to compensate them for their loss. In this case, they're getting a monetary benefit for their loss, rather than having to pay for their privilege, but it's relatively similar.

On a similar note, I just recently listed to this old old podcast, which raised several reasonable sounding concerns about things like National Park schemes for nature preservation. Worth a listen.

That said, this effort is likely as dumb as most carbon offset schemes, which Matt Levine routinely (and hilariously) lambastes. Definitely worth the read regularly if you're not already.