Lorenzo de Rosenzweig, an engineer and marine biologist, has dedicated over three decades to nature conservation in Latin America. Eric Smith, CEO of Edacious, focuses on the intersection of economics and nature. They explore whether financial tools can support ecosystems rather than harm them. The conversation dives into biodiversity markets, innovative investment strategies in regenerative agriculture, and the importance of protecting natural systems. They highlight the transformative power of mycelium and advocate for funding models that empower communities in the food system.
The podcast emphasizes that understanding nature's complexities requires engaging with it through various senses, fostering a deeper connection essential for effective conservation.
Innovative financial mechanisms like biodiversity markets and debt-for-nature swaps are highlighted as potential tools to align economic interests with long-term ecological restoration efforts.
Deep dives
Exploring the Intersection of Finance and Nature
The podcast delves into the question of whether financial tools that have historically harmed ecosystems can also support the life worlds of other species. It highlights the complexity and infinite value of nature, which cannot be fully captured through market metrics or risk assessments. There is a caution against commodifying nature for conservation efforts, emphasizing that finance’s role should not overshadow our appreciation for the natural world. However, it also acknowledges innovative financial mechanisms, such as biodiversity markets and debt-for-nature swaps, that aim to align economic interests with environmental restoration.
Learning to Engage with Nature
One key insight from the discussion is the necessity of learning to engage with and observe nature to understand its myriad complexities. Lorenzo de Rosenzweig emphasizes the importance of different perspectives and experiencing nature through various senses, encouraging listeners to become more attuned to their surroundings. He recounts personal anecdotes of how an appreciation for the beauty of individual bird species transformed his understanding of biodiversity. This shift in perspective fosters a deeper connection to the environment, which is essential for effective conservation efforts.
Balancing Financial Timelines with Natural Cycles
The podcast addresses the inherent tension between financial and ecological timelines, as nature operates on vastly different time scales compared to the immediate returns expected in finance. De Rosenzweig shares success stories, like Cabo Pulmo, where community-led conservation efforts yielded significant ecological recovery over decades, illustrating the need for patience and long-term perspective. He advocates for projects that align financial incentives with ecological restoration, promoting strategies that respect nature’s timelines while demonstrating tangible benefits. This approach promotes a blend of short-term wins that can serve as arguments for long-term ecological investments.
The Need for Holistic Ecosystem Valuation
A significant point raised is the challenge of adequately valuing ecosystems and biodiversity within traditional financial frameworks. Eric Smith advocates for incorporating the intrinsic value of nature into investment strategies, emphasizing a shift away from purely extractive economic models. The conversation highlights examples of innovative businesses, such as soil regeneration initiatives, that exemplify the long-term investment needed to truly restore ecosystems. Overall, the discussion calls for an acknowledgment of both the economic and intrinsic values of nature, encouraging investors to consider holistic assessments that take into account not only financial returns but also environmental resilience.
This week we’re asking whether it’s possible to support the lifeworlds of nature with the very same tools that have caused them harm. We’ll be joined by Lorenzo de Rosenzweig, who has headed Latin America’s largest nature conservation trusts for over three decades. And Eric Smith, from the Grantham Neglected Climate Opportunities Fund and Edacious, will talk about venture capital investing in nature based solutions.
I’m interested in this topic because I invest capital in projects that regenerate nature through my vehicle Ground Effect. In that work I constantly encounter philosophical and practical tensions – namely that complex natural systems and the trillions of processes that enable life to exist can never be fully translated and priced by markets. Numbers and metrics can’t tell us about the touch of rough bark or the flutter of a beetle’s wing against our skin. And because money is fungible, it can often efface all distinctions and trigger the further commodification and abstraction of a living ecology.
And yet finance can be used beneficially on behalf of nature. We can look at the maturing industry of biodiversity markets which attempt to move beyond single metrics like carbon, or debt for nature swaps, blue bonds, true cost accounting, payments for ecosystem services, and even more radical ideas like DAOs where nature owns itself. I’ve uploaded resources on the Lifeworlds library for those who want to go deeper on these innovations. Perhaps then, the conversation of “finance for nature” is about finding the right balance of not letting the perfect be the enemy of the good, and acknowledging where the role of markets begins and ends in the wider spectrum of systems change.