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– [Voiceover] What if economic and financial markets 00:27 could save the planet? 00:31 (birds chirping) 00:33 – We use nature because she’s valuable, 00:35 but we lose nature because she is free. 00:39 – If we invest money in protecting nature, 00:42 we’ll earn very, very high financial return. 00:46 – [Voiceover] Economists, bankers, investment funds, 00:48 and financiers are taking an interest 00:51 in the environmental crisis. 00:53 They say that they can protect 00:54 the planet their way, with money. 00:58 How much is the beach that you visit 00:59 every year actually worth? 01:01 How much for the forest that you love to walk in so much? 01:05 What is the value of a plant, a mammal, an insect? 01:09 Does this combination seem at all unnatural to you? 01:14 – Financialization equals the rape of the earth. 01:20 (monkeys chattering) 01:23 (snake hissing) 01:29 – [Voiceover] Endangered species and forests 01:31 are treated like financial products. 01:34 Can markets succeed where politics have so far failed? 01:38 But at what risk? At what price? 01:45 (crowd talking) 01:51 – Sometimes I describe the challenge that we have 01:54 as the economic invisibility of nature. 01:56 What I mean by that is that most of what nature 01:58 provides is not transacted in markets. 02:01 Whether it’s clean air or fresh water, 02:03 or whether it’s the pollination of bees for fruit trees. 02:06 When did a bee ever send you an invoice? 02:12 – [Voiceover] Billions of workers toiling away without 02:13 a break, in silence, and for no pay. 02:18 For millennia, no one recognized neither their 02:20 value nor all the work they do. 02:24 It took a tragedy for us to finally 02:26 recognize their economic value. 02:29 (buzzing) 02:34 – [Voiceover] In the US, a large part of the natural 02:37 wild bee population has died off. 02:39 The same thing is happening in Europe. 02:41 There are hundreds of people who 02:43 keep large numbers of bees. 02:46 They keep them in hives, and when 02:48 a farmer wants his field pollinated, he actually calls 02:52 one of these commercial pollination firms. 02:56 There’s a rate for hiring a million bees 02:58 for a week to pollinate your crops. 03:06 – [Voiceover] What if tomorrow they 03:08 were to disappear entirely? 03:10 What if we had to replace these bees 03:12 with humans, and therefore pay them? 03:16 – [Pavan] The pollination service of bees is economically 03:18 invisible, but the total value of that 03:21 was found to be something like 200 billion dollars. 03:24 That’s almost eight percent of the total 03:27 agricultural output on earth. 03:30 – [Voiceover] We look at these little creatures differently 03:32 now that we know that they’re worth 03:33 200 billion dollars, don’t we? 03:36 We immediately pay more attention to them. 03:39 All that wealth in a beehive, 03:42 and we humans never realized it. 03:49 But what if the solution was already here? 03:51 We just need to put a price on everything 03:53 that nature provides, pollination, 03:55 the pleasure of walking in a park, clean air. 03:59 – How much would it be worth? 04:01 Wow, that is a good question. 04:05 Hmm. 04:07 – How much would it be worth? 04:10 You can’t put a price on it. 04:11 – Can’t put a price on it. – You can’t. 04:12 You just can’t. It’s priceless. 04:14 – I want nature to be free. 04:16 Nature was there before we were, and we should learn 04:20 how to protect it, and that should not 04:22 have to do something with money. 04:24 – [Voiceover] But now, nature’s worth 04:27 is measured by its price. 04:34 Having plenty of clean air, water, and animal species 04:38 is of no interest to the markets. 04:40 They hate things that are abundant and free. 04:44 The equation is beginning to change. 04:46 – [Voiceover] Our economic system was created 04:48 in a very different era. 04:50 It was created hundreds of years ago when what was valuable, 04:53 what was scarce, were capital and labor. 04:58 So that’s what we put a value on. 05:00 All the natural resources, all the ecosystems, 05:03 all the clean air, clean water, there was too much of that, 05:07 so we didn’t put a value on it. 05:12 – [Voiceover] Nature is the El Dorado of the 21st century. 05:16 A new economic sector with promises 05:18 of huge returns for investors. 05:21 Banks, finance, corporations, 05:23 and states are attracted into it. 05:26 They all know that on a dead planet, 05:28 no one will do business anymore. 05:33 – [Ricardo] That’s fundamental economic theory. 05:36 Supply and demand, and effectively right now, 05:40 the price we’re putting on the environment 05:42 and on natural services is zero, effectively. 05:46 But that’s going to have to change as the supply 05:48 of these natural resources continues to dwindle, 05:51 and the demand in the form of people continues to grow. 05:55 (elephant trumpeting) 05:58 – [Voiceover] Applying the law of supply and demand 06:00 to natural resources and species is something new. 06:04 Until now, almost no one had ever thought of putting 06:07 life itself into the economic machine. 06:34 (train whistle) 06:36 – [Voiceover] Since the Industrial Revolution, 06:38 the world’s population has increased sixfold, 06:42 water consumption risen by a factor of three, 06:46 the amount of carbon in the atmosphere has doubled, 06:50 the global temperature has increased, 06:54 and half the world’s rain forests have disappeared. 06:59 Our ecological footprint is escalating. 07:02 To satisfy our needs, we’re using 07:05 the resources of one and a half earths. 07:08 If we continue at this rate, by 2030 we’ll need two planets. 07:13 By 2050, two and a half. 07:17 – What happens if there are very much less trees? 07:22 If there’s not the clean water we need 07:24 where we need it, when we need it? 07:26 If there isn’t the clean air where 07:28 we want it and where we need it? 07:30 That becomes scarcer, that becomes more valuable. 07:33 We’re just going to start to put a price on it. 07:35 We’re going to start to put a price on the destruction 07:37 of it, and we believe there are opportunities 07:40 in that transition, to profit from that transition. 07:45 – [Voiceover] Besides, business has already started. 07:49 About a hundred miles east of Los Angeles, there’s a fly. 07:54 Probably the most expensive fly in the world. 08:12 – Through here. Here it comes. 08:15 Right here, flying right by us. That is one of them. 08:18 Here it is again. (buzzing) 08:19 See that up there? 08:22 A century ago, there may have been on the order 08:26 of around 40 square miles of habitat. 08:32 That is essentially the distribution of the sand dune, 08:36 and over the 20th century, 95 percent of the remaining 08:41 habitat has been destroyed or converted over to other uses. 08:47 (train bell) 08:49 Only a small fraction of that five percent supports 08:53 good populations of this rare insect, 08:57 this Delhi Sands flower-loving fly. 09:03 (buzzing) 09:05 – [Voiceover] Colton County underwent 09:07 huge economic development. 09:09 Business and industry gradually swallowed the sand dunes, 09:13 while the so-called Delhi Sand flower-loving fly 09:16 had the sad honor of becoming the first American 09:19 fly on the endangered species list. 09:22 To protect it, in 1993, the state froze 09:26 all commercial activity on its habitat. 09:29 Colton’s growth dropped to zero, all because of a bug. 09:34 – The citizens here want jobs. 09:37 The citizens want retail services. 09:40 They want more businesses to be here, 09:43 and right now, we’re prevented from bringing them into town. 09:47 – [Voiceover] So the fly found itself hated by the entire 09:49 population, but one man’s misfortune… 09:52 – [Voiceover] The fly is a rare species with rare property. 09:55 It makes a very good financial investment. 09:58 We can create as much value for both our stockholders 10:01 as well as create a biological opportunity 10:04 for conservation by turning that into a mitigation bank. 10:08 So our most recent sales have been $250,000 an acre. 10:15 – [Voiceover] A bank saw an opportunity here, 10:17 a mitigation bank. 10:19 It realized that it could make money 10:21 off these useless little sand flies. 10:23 It bought a part of the fly’s habitat, 10:26 and then it did nothing, leaving the insect 10:29 to live in peace while selling shares. 10:33 If a business wants to develop a project on the land where 10:35 the fly lives, it will find itself blocked by the state, 10:39 but by buying shares, the entrepreneur can offset 10:42 his impact by investing in the insect’s protection, 10:46 and secures his right to develop his business. 10:49 The bank has already made 20 million dollars. 10:53 – [Michael] The free market tends to find out 10:54 a good balance between adequate conservation, 10:56 shareholder value, and allowing development to go forward. 11:03 – [Voiceover] A bank making money by protecting a species. 11:07 That sounds like a win-win situation, right? 11:10 But for the inhabitants, the bank is still 11:12 a fly in the ointment. 11:15 – [Greg] The fly is winning the war. 11:19 With the flies in place, we’ve lost 11:21 millions and millions and millions of dollars, 11:23 years and years and years of time. 11:26 We can’t replace what we’ve lost. 11:30 It would be cheaper to pay people to go out 11:32 and kill the flies than to mitigate. 11:34 Joke, joke. But true, but true, but true. 11:41 (trolley bell) 11:46 – [Voiceover] In the United States, species protection 11:49 is in the hands of these new bankers. 11:52 Businesses, estate agents, road builders, anyone 11:56 whose activity endangers animals, has to pay these banks. 12:03 They protect more than a million acres of land. 12:10 They sell wetlands credits, cacti credits, 12:14 prairie dog credits, even lizards credits. 12:26 Wildlands is the biggest mitigation 12:28 bank of the American west. 12:31 – Our annual revenues exceed 40 million dollars 12:34 a year in mitigation sales. 12:37 We mitigate for giant garter snake, 12:40 for salmon, steelhead, Delta smelt, splittail, 12:45 Swainson hawk, for burrowing owl, for desert tortoise, 12:50 elderberry longhorn beetle, tadpole shrimp, fairy shrimp. 12:57 Our customers are aware of the local 12:59 solutions that we can provide. 13:01 These customers will come and say, 13:03 “I’m building a shopping center and I’m affecting 13:05 “vernal pools, we’re affecting a burrowing owl, 13:09 “do you have something that can help me 13:11 “offset my requirements?” 13:13 So we take a look at our inventory, we provide 13:16 them a quotation for a solution, and then 13:19 we barter those credits to them. 13:22 It’s in a non-tangible transaction. 13:24 We give them a relief of their liability 13:27 as a certificate of goodwill. 13:32 – [Voiceover] But how do these banks choose to invest in 13:35 and protect one species rather than another? 13:40 And what happens to those endangered species 13:42 living in areas of the US where there’s nobody? 13:45 Where there’s no economic development, 13:47 and therefore, no one to buy credits? 13:51 – [Steve] Choosing between one endangered species 13:53 and another endangered species all depends on market demand. 13:59 Buying landscapes, protecting landscapes, 14:01 accumulating the landscapes, it’s a phenomenal opportunity 14:05 to be able to use a business model 14:09 to achieve sustainability of nature. 14:12 If we weren’t profitable, we wouldn’t have money 14:14 to re-invest in these future projects. 14:17 – [Voiceover] The laws of the market 14:18 applied to endangered species. 14:21 Surprising, right? 14:23 How can we let banks decide which species 14:26 are worth saving, and which one’s not? 14:30 Which ones deserve to live, and which are 14:32 to die on the order of profit? 14:38 (howling) 14:44 – [Voiceover] If you were to go on the 14:45 SpeciesBanking.com you would find 14:47 probably about 700 different banks. 14:51 It’s roughly between two and a half to three and a half, 14:56 four billion dollars a year that are in banking. 15:01 – [Voiceover] This market for endangered 15:02 species is developing. 15:05 Today, all these mitigation banks are listed. 15:08 You want to know which one protects the California 15:10 Gnatcatcher, the Tiger Salamander or the Swainson’s Hawk? 15:15 With one click, the endangered species appear 15:18 with the number of credits issued. 15:51 – Hi, I’m John. 15:54 I work for a company. A big company. 15:57 A company that still doesn’t realize it relies on nature, 16:00 which is why I’m organizing a meeting, 16:03 a big meeting, to discuss natural capital. 16:06 It’s a new idea to boost our business. 16:08 You’ve heard of financial capital, right? 16:10 So what is natural capital? 16:12 – Natural capital is capital which nature created, not us. 16:18 The climate system is natural capital. 16:20 The trees are the natural capital because they take 16:22 carbon dioxide out of the atmosphere and produce oxygen. 16:25 Biodiversity is a form of natural capital. 16:30 – So let’s take a shoe. 16:32 This one’s a leather. Leather comes from cows. 16:34 To make a cow, you need grass and grain. 16:37 That’s a lot of land and a lot of water. 16:41 – [Voiceover] It provides the clean water that we need, 16:44 the healthy food that we need. 16:46 Nature, through things like forests, 16:49 provides us protection from storms or floods, 16:52 and that’s what I mean by “nature’s fortune.” 16:57 When we speak like academics, we call what 17:00 nature does for us “ecosystem services.” 17:04 – [Voiceover] So nature has become a real business. 17:07 It has its own capital, and can 17:09 offer its services to consumers. 17:12 Without rain in the Amazon rainforests, there would be 17:15 no agricultural economy in South America, 17:20 a service estimated to be worth 240 billion dollars. 17:26 – The total loss of value every year 17:29 was almost two to four trillion US dollars. 17:32 That is two to four million million US dollars. 17:36 That’s almost the same size as the loss that was suffered 17:39 in the financial meltdown in 2008, 17:42 which was about five trillion dollars. 17:44 So that gives you a sense of how big these losses are, 17:47 and yet, they are invisible, because we are not 17:49 accounting for the capital when it disappears. 17:51 When the forests disappear, when the wetland is closed, 17:54 we are not accounting for the losses 17:56 because we are not accounting for the income. 17:57 The assets are invisible. Same problem. 17:59 Economic invisibility of nature. 18:44 – [Geoffrey] There are certainly some people who feel uneasy 18:46 about putting a price on nature. 18:48 They feel that somehow nature is intrinsically invaluable, 18:53 that bringing the profit motive and associated greed 18:56 to bear on natural phenomena is somehow 18:59 just the wrong thing to be doing. 19:04 I think that’s short-sighted. 19:07 – [Voiceover] Certain others are indeed 19:08 not so short-sighted. 19:11 They have chosen their side, that of the 19:13 so-called economic efficiency. 19:17 The Ecosystem Marketplace is a non-profit company 19:20 which issues environmental economic reports. 19:23 It is growing with each passing year. 19:28 – [Michael Jenkins] And the idea was to create a 19:30 Bloomberg of environmental markets, where you had 19:33 literally all the transaction data 19:36 publicly, transparently, and credibly available. 19:39 Then that stimulates markets, so we created 19:43 what we call “The Matrix,” which really lays out 19:46 the 24 different kinds of market instruments. 19:52 – [Voiceover] The Matrix is the Bible of the markets 19:54 for ecosystem services, markets in biodiversity, 19:59 water, carbon, green tourism, genetic resources. 20:04 The Ecosystem Marketplace invented this matrix 20:08 to show the potential for growth in these new El Dorados. 20:11 For instance, 10 percent each year for biodiversity 20:15 markets, 55 percent for carbon. 20:22 – [Michael Jenkins] What we’re seeing that’s exciting 20:24 is that it’s starting to get uptake in other places. 20:28 China, Brazil, Mexico, Peru. 20:31 We’re starting to see some real interest in these kinds of, 20:35 an instrument for compensation around biodiversity laws. 20:41 – [Voiceover] This jungle in Borneo is worth 20:43 some 34 millions dollars. 20:46 The state conceded it to an investment fund 20:49 that set up the world’s largest mitigation bank. 20:53 It intends to make a profit by offering its credits 20:56 to customers, such as pension funds and insurance companies. 21:01 – [Voiceover] There’s not very much of that forest left 21:03 in Sabah, and there’s not very much left in good condition. 21:06 There’s maybe only about 80,000 hectares 21:09 of good lowland forest, they’re called 21:11 primary forests, that hasn’t been lodged. 21:14 So that’s what makes protecting this lowland forest 21:16 very important, and that’s where the main iconic 21:20 species actually live, in lowland forest. 21:23 It’s where the fruiting trees are, 21:25 so that’s where the orangutans are, the elephants. 21:34 – [Voiceover] Borneo is the third 21:36 largest island in the world. 21:38 Its forest is almost 150 million years old 21:41 and a century ago, it covered the entire island. 21:45 Today, two thirds of it have vanished. 21:53 – [Voiceover] Malua BioBank is a 34,000 hectare 21:56 forest reserve in Malaysian Borneo, 21:59 and what’s unique about this particular project 22:02 is that it seeks to take a commercial approach 22:05 rather than a charitable approach to conservation. 22:08 It’s trying to monetize the ecological value in the forest. 22:12 – [Voiceover] Palm oil plantations 22:14 have replaced the primary forest. 22:16 Today, the island is an ocean of monoculture. 22:20 The ecological catastrophe is complete. 22:23 At this rate, the last remaining organutans 22:25 will have disappeared by the end of the decade. 22:29 – [Darius] If Malua has converted their ecological value 22:33 to a monetary value, instead of being worth nothing, 22:36 and those banteng and orangutan being worth absolutely, 22:41 having no value, then the palm oil company next door 22:44 would have to pay that price in order to be able 22:47 to destroy it and develop it. 22:51 – [Voiceover] The Malua bank sells its jungle credits 22:53 to palm oil producers, and any other 22:55 food processing companies around the world 22:57 that use the oil in their products, 23:00 while forcing those who destroy primary forests 23:03 to pay for this destruction, save the great apes. 23:33 – [Voiceover] Pavan Sukhdev is the global 23:35 reference of natural capital. 23:37 He argues that there is nothing shady about putting 23:39 a price on nature, and it doesn’t mean that 23:41 it’s being turned into a commodity. 23:44 He simply hopes to make states more aware 23:46 of their ecological riches, and companies more responsible. 23:51 Pavan made his career at Deutsche Bank. 23:55 Can a banker change his own nature? 23:59 – I’m a banker. 24:01 I understand the difference between prices and values. 24:04 I also understand that nature has huge value, 24:07 which we have simply not learned how to appreciate. 24:13 – [Michael Jenkins] With a bank you look at both 24:15 the risk and the opportunity around these issues, 24:19 and I think all of them are recognizing that 24:22 natural resources are very important. 24:26 So the JPMorgan Chases, and the Merrill Lynches, 24:29 and Bank of America, all of these major banks, 24:33 they’re the institutions that invest in the businesses 24:36 that are doing the projects that are having 24:40 an effect on biodiversity, positive or negative. 24:43 They’re a very important piece of our coalition. 24:50 – [Voiceover] So that is who is behind 24:51 the Ecosystem Marketplace, who is interested 24:54 in these markets, in their potential, 24:57 and who sits on their boards and committees. 25:00 Some of the names that bring back a few memories. 25:11 – [Voiceover] When we look at the development 25:12 of biodiversity markets, we find some very 25:14 well known actors, banks in particular, 25:19 and what’s curious and scary at the same time 25:23 is that often times these are the very same banks 25:27 that were also very actively involved in the trading 25:33 that led to the last large financial crisis. 25:41 Banks, of course, don’t do that because they have, 25:46 at the heart, protection of nature. 25:50 They do that because they see a business in this. 25:54 They want to become the ones 25:56 who provide the trading platforms. 26:01 – [Voiceover] Bank of America Merrill Lynch was fined 26:03 a record 17 billion dollars by the American government 26:07 on charges linked to the subprime mortgage crisis. 26:11 JPMorgan Chase, the largest bank in the USA, 26:15 had to pay a 13 billion dollar fine for the same charges. 26:18 (wolf howling) 26:21 Citigroup, saved from bankruptcy by the same government, 26:24 paid hundreds of millions of dollars to escape 26:26 legal proceedings by disaffected clients. 26:30 (lion roaring) 26:32 We can even find companies set up by former employees 26:35 of Goldman Sachs, the same bank that made 26:38 billions in profit by speculating on the crisis. 26:47 Can leopards change their spots? 26:55 – [Michael Jenkins] For decades and decades, we have been 26:58 trying to save biodiversity and forests 27:04 and those things, out of the goodness of our heart, 27:06 out of the fact that we know that’s the right thing to do, 27:09 and we have failed, we have failed miserably. 27:13 I will challenge anybody in the 27:15 environmental movement about that. 27:19 – [Mark Tercek] You might even think they’re the bad guys. 27:22 Maybe they even have been the bad guys in the past, 27:25 but sometimes they were the bad guys because 27:27 they were making mistakes, they didn’t know better, 27:29 and see whether you can convert a bad guy, 27:33 or somebody who’s just not paying attention, 27:35 into being an ally, because if we can do that, 27:38 we can get so much more done. 27:40 – [Voiceover] That was the boss of one of the biggest 27:42 nature protection agencies in the US. 27:44 His remarks are somewhat surprising, aren’t they? 27:47 – [Mark Tercek] I had a really fortunate experience 27:50 when I worked at Goldman Sachs. 27:53 I had been a mainstream investment banker 27:55 for more than 20 years, and then my final position, 28:00 before I joined the Nature Conservancy, 28:01 was leading an environmental effort for the firm. 28:04 – [Voiceover] Ecologists and bankers, these are 28:06 the new faces of nature conservation. 28:09 With their economic weapon, 28:11 they have targeted the politicians. 28:13 Protecting the environment is an expensive business. 28:16 Certain areas of the planet are already contaminated. 28:20 Money has to be gotten from wherever it can be found. 28:25 – [Voiceover] When you finance biodiversity, 28:27 you can logically look to the public funds, 28:31 but at the end of the day, 28:34 many look at the public funds, and there are many 28:36 needs which you would need to address through 28:37 the public funds, so it is utmost important 28:40 that you use also private funding. 28:43 That’s why this innovative financing 28:46 mechanisms logic started to emerge. 28:51 – In Brussels, the lobbyist capital of the European Union, 28:55 you have between 15,000 and 50,000 lobbyists, 29:00 and most of them work for corporations. 29:07 The World Business Council for Sustainable Development 29:10 is a group of some 200 corporations, 29:12 many of them actually with very bad records on environmental 29:16 issues, like Rio Tinto, Shell, BP, etcetera, 29:21 and it was created in 92 with a goal 29:24 of influencing the original Rio summit. 29:36 – [Voiceover] I think we’re slowly but certainly moving 29:38 to a state where it will become 29:41 equal partners in a discussion. 29:44 Maybe I’m expressing a hope more than a reality today, 29:48 but it’s certainly a trend that I see happen. 29:51 Only if we get business and governments as equal partners 29:56 in this debate will we find the solutions, 29:59 and the scale to the solutions, that the world needs. 30:04 (jazz music) 30:07 – [Voiceover] The bet has paid off. 30:09 At the last Earth Summit, the United Nations 30:11 rolled out the red carpet for the private companies. 30:20 All these corporations met in a luxury hotel in Rio. 30:24 Oil, chemical, steel giants, themselves regularly 30:29 accused of practices harmful to the environment. 30:34 – It means we do have to, in good management sense, 30:38 explore risks and opportunities. 30:40 We have to understand our ecosystem. 30:44 – [Voiceover] Just to bring that alive a little bit, 30:46 this is the Nestle commitment to no deforestation. 30:49 I think we were the first major company 30:51 to make this kind of commitment. 30:56 – It was pretty clear to us the area that we really needed 30:59 to think about was biodiversity and ecosystem. 31:03 – [Voiceover] Dow Chemical was one of the manufactures 31:05 of Agent Orange, a herbicide used in the Vietnam War 31:08 that caused thousands of cancers and malformations. 31:12 It is also linked through the purchase of Union Carbide 31:14 to the Bhopal catastrophe, where a factory exploded 31:17 in 84, releasing 40 tons of chemicals, 31:20 killing 10,000, and causing sickness to another 300,000. 31:27 – [Belen] The same companies that belong to this group, 31:30 in their real daily activities, in their lobby towards 31:32 government, are lobbying for exactly the opposite, 31:36 are lobbying for policies that benefit their commercial 31:41 interests, that don’t affect their activities, 31:44 that they don’t need to make any structural change, 31:46 that they can keep on having devastating impacts 31:50 on communities, on the environment. 31:54 – [Janez] We want to have this partnership 31:57 with the business sector, because without that partnership, 32:01 we have practically no real chance to succeed. 32:09 – [Voiceover] It only took 20 years for the banker, 32:13 the politician, and the businessman, a symbolic trinity, 32:19 to begin speaking in harmony about the environment. 32:25 – Post-war economic history has been a very exciting time, 32:28 because it’s seen the emergence of the multi-national 32:30 corporation, but part of that emergence, and part of that 32:34 success, has been through the deregulation 32:39 and the innovations in trade in capital markets. 32:42 – So, basically I do believe that I am not talking about 32:46 environmental interests here, and that I am talking 32:49 about new industrial policy needed. 32:53 It’s actually not about green growth, 32:57 it is about growth, full stop. 33:01 Thank you. 33:02 (clapping) 33:15 (lion roaring) 33:17 – [Voiceover] So are the politicians, bankers, 33:19 and corporations all in bed together? 33:23 Is there an international plot against nature? 33:28 And what if this alliance was the only 33:30 means of saving the planet? 33:36 We would like to believe in this brave new world. 33:43 Believe that the banks and the 33:45 business corporations have changed. 33:49 Is it a metamorphosis, or just greenwash? 33:56 – I’m an ambitious guy, as you may have noticed. 33:59 I think we can do this, change the rules of the game. 34:03 I’m really looking forward to the next 10 years because 34:05 it will completely transform the way we run our economies. 34:10 We will strike a balance between financial or economical 34:14 success, natural or environmental, and social success, 34:19 and if we can do that, then the vision that I’ve 34:21 said before, nine billion people, all living well 34:26 within the boundaries of the planet, 34:28 will become a reality, because that’s how, 34:30 with a measured way, our economy performs. 34:37 – [Voiceover] The promise of additional profits, 34:39 coupled with a desire to improve their image, 34:41 has certainly encouraged some businesses 34:43 to commit themselves to preserving the environment. 34:47 Vale is a mining giant, and a member of the 34:50 World Business Council for Sustainable Development. 34:53 The corporation operates in 38 different countries. 34:57 Its train is an institution in Brazil. 35:01 Over 500 miles, from the heart of the Amazon 35:03 to the Atlantic ocean, the company transports the people 35:08 (train horn) 35:12 and 100 million tons of iron ore every year. 35:18 Aware of its ecological impact, the company decided 35:21 to reforest certain areas of the Amazon. 35:26 It has already replanted over 100,000 acres of trees 35:30 with a further 400,000 acres in the pipeline. 35:44 (clapping) 35:47 – [Voiceover] And yet in 2012, Vale received the 35:49 Public Eye award, the prize for corporate irresponsibility. 35:54 – With these nominations, some of the worst 35:56 examples of corporate irresponsibility 35:58 in the last year have been identified. 36:01 What is needed is not just the recognition of what is wrong 36:04 with, say, their environmental and labor practices, 36:08 but systemic improvements. 36:10 I hope that these awards will raise consciousness 36:13 of some of the kinds of worst practices 36:16 that are going on in the world today. 36:19 (yelling) 36:20 – [Voiceover] What did Vale do to deserve such an award? 36:24 What did Vale do to trigger the creation 36:26 of an international victim’s organization 36:29 while spending more than a billion dollars 36:31 each year promoting sustainable development? 36:38 Along its railway track, there are, amongst other things, 36:42 five factories working 24 hours a day 36:44 transforming the ore into cast iron, in the process 36:48 spitting out foul-smelling and hazardous smoke, 36:52 and just below, there’s a village. 37:56 – [Voiceover] In the heart of the Amazon, 37:58 the multi-national operates the planet’s most important 38:00 iron ore mine, and even if Vale plants trees to offset 38:04 its impact, it also knows how to transform 38:07 its good deeds into profitable shares. 38:11 These investments allow it to be listed 38:13 on the Sustainable Development index of the stock exchange. 38:17 However, while claiming to replant the Amazonian forest, 38:21 Vale is only growing a single species of tree, eucalyptus. 39:03 – [Voiceover] In 30 years, all the land 39:05 with eucalyptus will become barren. 39:09 Until then, the financial markets will have 39:11 rewarded Vale for their green investment. 39:14 Ultimately, the multi-national will make even more profit 39:17 by selling its trees for biofuel. 39:21 Disguising a monoculture into 39:23 a millennia-old Amazonian rainforest. 39:26 This is one of the great deceptions of the green economy, 39:30 a lie that consists in claiming 39:32 that markets can protect biodiversity. 39:35 – Biodiversity markets are not an entirely new invention. 39:41 There are other types of markets 39:44 with parts of nature that we can look to 39:47 to see how they function, and who wins and who loses 39:52 when those markets are put in place. 39:55 (crowd talking) 39:59 – [Voiceover] In December 97, a majority 40:01 of countries signed the Kyoto Protocol. 40:04 They accepted the risks brought by climate change, 40:07 and committed themselves to reduce 40:09 their greenhouse gas emissions. 40:13 They also put in place market mechanisms to encourage 40:16 businesses to offset their impact on the environment. 40:20 That’s why Western companies began investing in protecting 40:22 nature or planting forests in developing nations, 40:26 from small businesses to huge multi-nationals. 40:31 Uganda has attracted some of these carbon investments. 40:37 – [Voiceover] To get the volumes and the amounts 40:39 of carbon that you have, you need to measure the trees. 40:44 Like diameters, heights, and then you get those values 40:49 and feed them to the formula to get 40:51 the carbon quantities that we have. 40:57 – [Voiceover] These men work in a profession 40:59 that did not exist before the signing 41:00 of the Kyoto Protocol on Climate Change. 41:07 They are carbon hunters. 41:10 – Height to is 20.6. 41:13 – [Voiceover] Each ton of CO2 stored 41:15 in the trees equals one carbon credit. 41:18 – 25 point zero. 41:20 – [Voiceover] Credits which a German company 41:22 offers to the international market. 42:18 – [Voiceover] In the past, this plantation land 42:21 was used often illegally by the villagers, 42:24 but in such a poor country, these people grew just enough 42:27 to eat or to sell at market, or to feed their cattle, 42:30 but everything changed with the arrival of Global Woods. 42:41 Vacancies for Forest Security Manager. 42:44 The jobs are to ensure that a forest plantation 42:46 stays free of damage caused by illegal grazing. 42:49 Abilities and qualifications, trained in policing 42:53 or army skills, including martial arts. 43:02 This is the main solution offered by international 43:05 politicians and the markets to protect the planet. 43:09 The developed nations pay to have trees planted, 43:12 rather than trying to change their ways. 43:17 But how should land be used? 43:19 To live on and grow food, or to replant trees? 43:23 In order to protect the forests in various locations 43:26 in Africa, the villagers have been expelled, 43:29 and their homes burned to the ground. 43:34 In Honduras, dozens of farmers have already died 43:37 protesting against these sorts of expulsions. 43:43 How can trees be worth more than people? 43:54 But for now, nothing can stop the charge 43:57 of the raging bull of Wall Street. 44:03 It has barely a second thought for who it tramples underfoot 44:06 when it finds new sectors in which to make money. 44:42 – They use speculation as if it were a bad word. 44:47 I don’t necessarily see speculation as always a bad thing. 44:51 Basically, what speculation is, is people taking risks, 44:56 and hopefully, the people who are taking the risks 44:59 can assume the risks if they don’t pan out. 45:03 Already we’ve seen millions of dollars being invested 45:06 in projects that protect forests, why? 45:10 Because people are hoping that they will be able 45:12 to make money selling carbon credits in the future. 45:15 They’re not making money now. 45:16 Most of them are not making money now. They’re speculating. 45:24 – [Geoffrey] During my lifetime, we’ve had plenty 45:25 of stock market crashes, so could these environmental 45:28 markets be liable to crashes of the same sort? 45:31 The answer is yes, in principle they could, and in fact, 45:33 we’ve actually lived through one of these recently. 45:36 – [Voiceover] Because the price of carbon 45:37 on the markets has collapsed, from around 45:40 30 dollars a ton to less than three. 45:43 How can we entrust our future to a market that sometimes 45:46 recognizes the value of nature, and sometimes doesn’t? 45:51 – The Bank of America Merrill Lynch and the World Bank 45:53 have announced a plan to offer World Bank green bonds… 45:59 – [Voiceover] Major banks and businesses have offered 46:01 “green bonds,” a monetary product 46:04 invented by the World Bank. 46:07 They have already issued tens of billions of dollars 46:10 worth of bonds in order, they say, to redirect 46:13 finance to serve the environment. 46:17 What is the guarantee that this so-called 46:19 green finance will benefit the planet? 46:28 – The likelihood that banks, traders, 46:35 will be developing the hardware and software 46:39 of this new market in a way that benefits them 46:43 rather than benefits nature will be the same 46:48 as was the case in the financial crisis, 2008, 2009. 46:55 These financial derivatives, financial products that were 46:59 being traded very rapidly, were not helping 47:02 house owners to safely finance their home. 47:07 No, they were developed and used 47:11 to increase the profits that banks could make. 47:15 – [Voiceover] This is where the financial crisis started. 47:18 The banks played on the dream of owning your own home. 47:22 In the USA, they used the promise of this illusion 47:25 to lure modest households with precarious finances. 47:29 Once the families were no longer able to repay their loans, 47:33 the house of cards collapsed, leading to the subprime crisis 47:37 that made millions of Americans homeless. 47:40 The world tipped into a social crisis. 47:44 – [Voiceover] Well, we’ve seen the consequences 47:46 of financialization, we’ve seen the collapse of Wall Street. 47:50 We are witnessing around the world, 47:52 this hungry money, which is only looking at how 47:56 to make the next profit, devastating economies, 47:59 devastating ecosystems, devastating the planet. 48:04 For them to say that the reason the planet 48:09 is being destroyed is because there wasn’t a price, 48:11 all we have to do is a map. 48:14 Wherever there was a price, the minerals 48:17 have been mined, the earth has been raped. 48:21 Where there was reverence and respect, 48:24 nature stands in high integrity. 48:26 The evidence is very, very clear. 48:29 Price has led to degradation and destruction. 48:31 Pricing and financialization is a disease 48:35 that we have to overcome. 48:37 It’s like a cancer on this planet and in the human mind. 48:49 – [Voiceover] But what is the connection between 48:50 junk bonds, speculators, and houses, 48:53 and forests, insects, and orangutans? 48:58 In the past, when people wanted to buy a property, 49:00 they went to their bank to ask for a loan. 49:03 The bank would assess their ability to repay the loan. 49:06 The financial crisis made everyone realize 49:09 that loans were no longer just the domain of banks. 49:13 In fact, household debts are transformed into securities, 49:17 bought by investors, then split up and mixed in 49:19 with other debts to create derivatives more or less risky, 49:23 therefore more or less profitable, 49:25 and finally put onto financial markets. 49:28 One day, too many homeowners were unable 49:31 to continue paying back their debts, 49:33 triggering a flood of bankruptcies. 49:36 The world then discovered that some investors had speculated 49:39 on the inability of homeowners to repay their loans. 49:44 – It’s not that big a stretch of an imagination 49:48 to use the same logic of dividing up 49:54 the biodiversity credits, and dividing up 49:57 biodiversity, in a sense, and saying, 50:00 “You can now speculate on 50:06 “the future date of extinction of that species.” 50:10 (crowd talking loudly) 51:26 (dog whining) 51:30 – Yes, securitizations are sometimes bad, 51:32 and they led to the financial debacle. 51:34 Those were bad securitizations, 51:35 but securitizations also can be very, very good. 51:38 That doesn’t mean there should be no securitizations. 51:39 That means we must work harder, but just because 51:42 there’s a chance of something going wrong, 51:44 or just because there’s a chance that someone 51:45 might not like it, should we stop and not do it? 51:48 I think that would be a foolhardy mistake. 51:51 (birds chirping) 51:54 – [Voiceover] But if things were to go wrong, 51:56 what would the consequences be this time around? 51:59 Is there a level of acceptable risk? 52:03 Investment funds are already proposing species portfolios. 52:08 You could choose 50 orangutan, 30 fly, or 40 locust credits. 52:14 The Amazon rainforest is already listed 52:17 on the world’s first green stock exchange. 52:21 – [Jutta] Some people will say, “Well, but this is 52:24 “all conspiracy, this is not going to happen. 52:26 “This is not the purpose of nature accounting. 52:29 “We don’t want that.” 52:31 But how will they prevent this kind of development? 52:34 Once the methodologies are there to start speculating, 52:39 to start trading biodiversity? 52:43 You provide the instruments, and the use of those 52:47 instruments will be out of your hands. 52:52 – [Voiceover] At stake is our future on the planet. 52:55 Can we really mortgage that out, 52:57 and place it on the financial markets? 53:01 Lots of banks have committed to protecting species 53:04 for just 50 years, just enough time to make a profit, 53:08 yet just a speck of dust as far as the earth is concerned. 53:38 – [Vandana] We need to learn to get out 53:40 of the valuation on the market, which is only price, 53:43 where everything has a price and nothing has value, 53:46 to everything of nature having value, 53:48 and not being measured in price, 53:50 and finding other ways for humanity, 53:52 as humanity, for most of its history, has done. 53:56 It has not related to nature’s values through price. 54:04 – [Voiceover] The world of finance toyed with 54:06 the homes and households of America, 54:08 sparking a crisis around the world. 54:11 Only a handful of experts foresaw the danger 54:14 of the mechanisms we engendered. 54:16 Now we all know. 54:18 The same recipes are applied, 54:20 but this time their toy is nature. 54:23 Is it a good idea to leave the planet in their hands? 54:30 (dramatic music)

 

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