Another Entry in the Recent Boom of US Climate Policy

Saturday February 25, 2023

By Julien Joy

Climate policy has had a good run recently. The headliner, of course, is the IRA, the “Inflation Reduction Act”,  which earmarks $369 billion in subsidies for “Energy Security and Climate Change” – everything from heat pumps to EVs to renewable energy production. Right behind the IRA is the “Bipartisan Infrastructure Law” which, while not directly taking aim at climate change, invests its own billions in initiatives that have positive environmental impacts: clean water, public transit, and upgrading the power grid, among others.

Flying under the radar of those major bills, however, are a raft of policies, bills and initiatives have passed with less fanfare but still intriguing potential. One of those was released just last month on January 19, 2023: the “National Strategy to Develop Statistics for Environmental Economic Decisions” has the potential to indirectly tilt an enormous amount of federal spending and decision-making towards more environmentally-conscious options.

The strategy seeks to redress a specific problem: the fact that natural capital – everything from “the minerals that power our tech… to the ocean and rivers that support our fishing industry, to the forest that clean our air” – are “not currently reflected in our national economic statistics.” It recognizes the immense knowledge gap that nature’s immense economic value is entirely unaccounted for in economic decisions.

“The strategy itself appears to be the beginning of a long-term process

by the federal government to quantify, in economic terms, nature.

 

The strategy itself appears to be the beginning of a long-term process by the federal government to quantify, in economic terms, nature. That quantification then can be leveraged for a multitude of purposes, among them guiding sustainable development and macroeconomic decision-making, supporting federal investment decisions, and supporting resilient state, territorial, Indigenous, Tribal, and local communities. One of the more interesting stated purposes is the creation of a new, forward-looking headline measure: “Change in National Asset Wealth”, which could be integrated with GDP to illustrate a more holistic view of the national economy.

Of course, the mere idea of putting a dollar-amount on nature does – at least to the author – seem repugnant. How could one estimate the price of an acre of pristine, old-growth forest? Or a mountain stream? And what about a species that goes extinct due to habitat loss? Operationally, what if putting a dollar value on nature simply gives the ultra-rich license to consume it?

But the other side of that coin is that nature is currently valued, for all intents and purposes, at nothing. That’s how we arrived at the Anthropocene era and the Sixth Extinction in the first place. The ultra-rich, to continue the example, already consume nature at will.

In the end, like any other policy, the impact will be made clear over time. At worst, it could turn out to be another nature-centric version of a polluter-tax: as long as the cost is low and the application political, the policy will further facilitate the destruction of nature in the name of profit. At best, though, nature would be honestly accounted for and embedded across all federal decision-making and spending.

For those who believe in market economics, applied in good faith, this could prove a clever ‘nudge’ towards national conservationism, a way to internalize negative externalities at a national scale. For those who believe that capitalism is fundamentally incompatible with sustainability, this probably looks like a delusion meant to delay real, meaningful change. Time will tell.

 

Julien Joy served in Ethiopia from 2016-2018 as a 9th grade English teacher. He currently works to help companies improve their ESG and sustainability practices. 

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