Marjan van den Belt: Markets part of climate quandary

22.5 million people in Beijing are for the first time on "red alert"

The Paris climate change talks bring to the fore the connectedness of the world we now live in. Climate change is an upfront example of what happens when ecosystems cease to function the way they should.

The consequences for humanity are severe and can be linked to mass migration and social unrest. People depend on ecosystems - defined as where all living things, from plants and animals to organisms, share an environment. Overcoming the short-sighted consequences of a free market global economy, we need to invest in "natural capital" in the same way we invest in other forms of capital if we are to continue to receive the essential, life-giving ecosystem dividends.

Investment in protecting and maintaining healthy ecosystems gives us 'ecosystem services' - the benefits that people derive from ecosystems, or from - quite simply - nature. Things like clean drinking water and air, pollination of crops, waste decomposition and nutrient cycles. Climate regulation is one "ecosystem service" that a healthy, global, shared environment provides.

Awareness of the life-support services that ecosystems provide is increasing. In preparation for COP21, I have been part of the Oceans and Climate Platform and Unesco's World Oceans Day. This group of scientists and diplomats is calling attention to the crucial role of oceans in climate regulation, reinforced by the fact 72 per cent of the earth is covered by oceans.

Due to sea level rise, this percentage is growing within our lifetime. A summary of the first UN World Oceans Assessment was recently presented to the UN General Assembly. It concluded "the world is running out of time to bring the overall human impacts on the ocean under sustainable management".

There are hopeful signs ecosystem services thinking is entering the mainstream. Britain has completed a Natural Capital Assessment, and has used ecosystem services to organise its thinking. President Obama recently released a memo to "incorporate ecosystem services into federal decision making". All US federal departments have to consider natural capital and take all ecosystem services into account in policy and decisions to guide them in developing more effective and efficient solutions.

New Zealand is certainly on the right track with Treasury's living standards, by systemically interlinking the core components of wellbeing which we derive from natural, social, human and built capital. The natural resource sector has been collaborating across the various ministries and departments to consider how to capture the value of nature and use an ecosystem services approach. The challenge seems to be how to overcome the politics and differentiation between value and price. Value isn't the same as price. For example, I value my children, but they are not for sale.

Markets function based on price. Yet an unwavering belief in the ability of neoliberal markets and financial systems to rescue the situation does not acknowledge it is part of the problem. We can't grow the economy out of climate change by subsidising the industries that contribute to the problem.

Nowhere is the issue more frighteningly apparent than in China where, right now, 22.5 million people in Beijing are for the first time on "red alert" - the highest indicator for smog levels.

The natural capital that provides them with the ecosystem service of breathable air is profoundly overburdened. It's been estimated around 1.4 million Chinese people die prematurely every year due to pollution, much of it the result of manufacturing cheap goods we buy here. This will be further enabled by dysfunctional agreements such as the Trans-Pacific Partnership Agreement, under the banner of "free markets". While New Zealand is far from experiencing such a catastrophe, we are part of the same global ecosystem.

We do, however, live in an exciting time, pregnant with opportunity to navigate the paradoxes caused by climate change and related challenges. Many of the pieces for better decision-making are already in place, if one cares to put the pieces together. A more coordinated approach to bring together what is already known will accelerate progress in adopting more sustainable solutions.

Whether we live in Beijing, Beirut, Barcelona or the Bay of Plenty - we're all bound by a common need to look after the ecosystems that give us life. It's just good economics.

-Associate Professor Marjan van den Belt is Director of Ecological Economics Research New Zealand, based in the College of Humanities and Social Sciences at Massey University's Manawat campus.

-Business and civic leaders, organisers, experts in their field and interest groups can contribute opinions. The views expressed here are the writer's personal opinion, and not the newspaper's. Email: editor@hbtoday.co.nz