Why the Nature Economy Just Might Save the World

May 09, 2024

There’s a new term gaining traction in the world’s economic journals.  It is the 'Nature Economy’ and it is upending many of our traditional notions of growth and wealth.  I’ll discuss what this Nature Economy is more fully below but, in short, the term is used to describe a new paradigm, or way of thinking, about global economics that recognises ‘natural’ capital as a potentially profound force for generating sustainable prosperity.  Today, in the early 21st century, as we grapple with environmental crises, with the pain and atrocities of war, and with undeniable social and socioeconomic inequities around the world, the concept of the Nature Economy offers what I think are compelling alternatives to traditional notions of ‘success.’  More importantly, by understanding the principles of the Nature Economy, we might become more motivated to invest in creating healthier relationships with our planet, with our bodies, and with each other. 

No, clearly, this isn’t an everyday blogpost on the dangers of seed oils.  But it is a topic equally relevant to our health and well being.  As the world grapples with the complexities of climate change, biodiversity loss, and environmental degradation, the need to recognise and celebrate the Nature Economy has never been more pressing.  Adopting the principles of the Nature Economy should have a profound impact on our lifestyle and patterns of consumption. And, lifestyle has everything to do with health. Doesn’t it?

So, let’s dive into the Nature Economy.

Sometimes referred to as ‘ecological economics,’ the Nature Economy, as suggested above, recognises all human economic activity as occurring within nature and nature itself as a profound source of much of our wealth.  At its core, the Nature Economy challenges our prevailing orthodoxy that views nature as a passive input to be exploited for human gain. Instead, it acknowledges nature as a complex and dynamic system that provides many, if not most, of the essential services underpinning economic activity —from clean air and water to pollination and climate regulation. By recognising the true value of ecosystems and biodiversity, the Nature Economy seeks to integrate environmental considerations into decision-making processes, ensuring the long-term resilience and sustainability of human societies.

Central to the concept of the Nature Economy is also the notion of natural capital—the stock of renewable and non-renewable resources that provide benefits to society. Unlike traditional economic measures, which often neglect the contributions of nature, the Nature Economy assigns a tangible value to ecosystem services and biodiversity. This entails quantifying the economic value of clean air, fertile soils, and healthy ecosystems and accounting explicitly for the costs of environmental degradation and the benefits of conservation and restoration efforts.

A third critical feature of the Nature Economy is its reliance on and promotion of the circular economy—an economic model that aims to minimise waste and maximise resource efficiency by closing the loop of production, consumption, and disposal. By adopting principles of reduce, reuse, and recycle, the theory suggests, societies can decouple economic growth from environmental degradation, thereby achieving prosperity within planetary boundaries. This entails redesigning products and processes to eliminate waste, promoting sustainable consumption patterns, and fostering collaboration across value chains.

Still another defining feature of the Nature Economy is its commitment to sustainable development. Indeed, because the need for sustainable development seems unequivocal, the Nature Economy prioritises investment in and renewal of ecological infrastructure—the network of natural systems that support human well-being and economic activity. From wetlands and forests to coral reefs and mangroves, these ecosystems provide a range of services that are vital for human survival, including flood protection, water purification, and carbon sequestration. By safeguarding and restoring ecological infrastructure, societies can enhance resilience to climate change, mitigate natural disasters, and promote inclusive economic growth.

A final hallmark of the Nature Economy is its emphasis on nature-based solutions—innovative approaches that leverage the power of nature to address pressing societal challenges. Whether it's reforestation to combat deforestation, green infrastructure to manage urban flooding, or agro-ecology to enhance food security, these solutions offer cost-effective and sustainable alternatives to conventional approaches. By working with nature rather than against it, communities can achieve multiple co-benefits, including enhanced biodiversity, improved livelihoods, and enhanced climate resilience.

To me, all of this sounds wonderful, of course.  But at the moment, the Nature Economy exists more in theory rather than in practice.  Is there any real application of the Nature Economy? 

There certainly are organisations working at it.  One is the World Economic Forum (WEF), which invests actively in the development of Nature Economy principles and advocates applied action through its Nature Economy report series.  This series attempts to tangibly illustrate the relevance of nature loss to individual, social, and corporate decision-making and well-being.  It is an initiative, suggests WEF, that provides ‘pathways for business to be part of the transition to a nature-positive economy.’   Another organisation that has taken on a pivotal leadership role in this area is the UNEP-WCMC or United National Environment Programme - World Conservation Monitoring Centre.  Without question, through its groundbreaking research, policy advocacy, and strategic partnerships, UNEP-WCMC has been at the forefront of efforts to protect and sustainably manage the Earth's natural resources.

One of the UNEP-WCMCs key strategies for instilling Nature Economy principles in the world economy involves shifting incentives.  There is little question that to encourage more sustainable use of our planetary resources we need to change our motivations.  The UNEP-WCMC is actively arguing for implementation of market-based mechanisms, such as requiring payments for ecosystem services, carbon pricing, and biodiversity offsets, which internalise the true costs of environmental degradation and provide economic incentives for sustainable practices.

Thankfully, it’s not just talk.  A testament to their commitment, UNEP-WCMC's key contributions in 2023 underscore the breadth and depth of their impact. From advancing marine conservation initiatives to promoting sustainable land use practices, their work spans a diverse array of critical issues. By leveraging cutting-edge technology and harnessing the power of data, they have helped to inform evidence-based decision-making and shape transformative policies at both national and international levels.

But clearly, we and the world have much more to do to make the Nature Economy real.  Nonetheless, the fact that it exists and is championed by such active proponents suggests that it can be a beacon of hope and opportunity.

Interestingly, however, the significance of the Nature Economy extends beyond its environmental implications. It represents a fundamental reimagining of our relationship with nature, requiring that we rethink and expand upon what are now revealed to be very limited, acquisitive ideas.   

I might draw some comparison between the potential of the Nature Economy and the evolution of regenerative design, another paradigm that attempts to prioritise the health and well-being of both people and the planet.  Within regenerative design, ‘life-centred’ design has emerged as a natural progression from ‘human-centred’ design.  I remember in the 90s, human-centred design was seen as a tremendous advance.  IDEO and the Stanford d.school were shifting our thinking and our priorities away from cost minimisation and simple design aesthetics towards empathy with users, iterative prototyping, and the prioritisation of solutions for real human problems.  Similarly,  the evolution of the Nature Economy signals a shift away from out limited focus on human society towards a more inclusive recognition of the value and contribution of all life forms on earth.  It challenges us to recognise that our prosperity is linked not to our own innovation but also to the health of our ecosystems.  Indeed, the overarching goal must be a harmonious and reciprocal relationship with Earth itself.

If we define our goal this way, the Nature Economy represents not just an economic imperative, but a moral imperative as well. It calls upon us to embrace a vision of prosperity that is rooted in sustainability, equity, and stewardship.  Ultimately, the rise of the Nature Economy represents a fundamental reimagining of humanity's relationship with the natural world.  In conclusion, the rise of the Nature Economy marks a pivotal moment in human history, one in which we have the opportunity to truly redefine our relationship with the natural world.

It seems a good thing.