Nature’s Financial Value, GEP, and Scaling an Initiative to 75 Countries
Professor Gretchen Daily in conversation with Sam McClure, on the Stanford Ecopreneurship Podcast
“Our economic systems are blind to the values of nature. We could assume that nature was infinite and that’s what was assumed for the most part. But now, everybody’s waking up to reality,” says Stanford Prof. Gretchen Daily.
As co-founder and faculty director of the Stanford Natural Capital Alliance, Professor Gretchen Daily has redefined how we understand and value nature’s role in human well-being. Her work has united economic thinking and policymaking with the science of conservation, with the goal of transforming society to secure people and nature. In a wide-ranging conversation with Sam McClure on the Stanford Ecopreneurship Podcast, she covers everything from how natural capital helped Costa Rica reverse the single worst deforestation in the world, to how a city in China is using a new economic metric (GEP) to make the case for restoring mangroves instead of building seawalls for coastal resilience.
She is as poetic as she is practical, and she asks us to remember, if only briefly, "the staggering improbability that we live here, on this earth." Daily helps us to remember that nothing exists in isolation: neither our systems of governance, economics and policy, nor our ecosystems. Daily allows us to see our interconnections with and reliance on the non-human world as our strength as much as it is our weakness.
We must learn to hold two truths at once, she seems to say: first, to develop a very practical view of nature and our reliance on it — second, to honor the many cultures that for millennium have maintained ways of integrating nature in their lives.
See the full conversation below for a clear distillation of the Natural Capital Alliance’s work – we think you'll enjoy it! After listening, I found myself continuing to reflect on a few more specific elements of the conversation, and have pulled out time-stamps, as well as my key-takeaways below.
00:00 - Introduction
01:40 - Growing Up and Running Wild
06:43 - The Origins of “Natural Capital”
09:22 - Practical Solutions for People and Planet
16:41 - Costa Rica’s Transformation
19:53 - Scaling NatCap Globally
23:04 - Climate Security Through Nature
27:56 - Nature and Children’s Immune Systems
32:34 - Working with the Private Sector
42:26 - Measuring Gross Ecosystem Product
46:15 - Shenzhen’s Mangroves
Key Takeaways
The phrase “natural capital” is older than you think: McClure asked Daily about the origins of the term…..and it turns out it has roots stretching back into French literature. Auguste Walras was writing about capital naturel in the 1830s, and in the eighth lesson of his Évreux course given in 1832-1833, he referred to original productive forces: land and labour, as natural capital. Within the French tradition, natural assets were later framed as patrimoine naturel (a national, cultural heritage to be stewarded and passed on), relating to the idea of terroir (soil, territory, social identity, and culture). Pretty cool!
Food, Farmers & Deforestation in Costa Rica: Daily reflects on drawing inspiration from the tiny country’s reforestation efforts. Her work developed through collaboration with Alvaro Umaña Queseda (an academic, environmentalist, and politician who served as Minister of Natural Resources, Energy and Mines from 1986 to 1990) in Costa Rica. At the time, Costa Rica had the highest deforestation rate ever recorded in history at a country scale - it was “basically a poster child for planetary destruction,” Daily said. Umaña developed a payment scheme: give farmers grants and favorable loans to restore or protect forests on their land, recognizing that people were simply living day-to-day and would need compensation for adapting their practices. Today, the country has gone from 25% forest cover to almost 60%.
GDP is only one way of measurement: At minute 42:26, Daily walks through Gross Ecosystem Product, or GEP, a complementary metric to GDP that makes visible what our current systems ignore: the value of clean water, pollination, coastal protection, functioning forests. We will be discussing GEP a lot in the coming pieces, so this is a great introduction to what it is and how it works.
Shenzhen Mangroves. Then, at minute 46:15, Daily highlights how one of the world’s leading tech cities used GEP to guide a major investment in mangrove restoration instead of a built seawall. The story of Shenzhen is a story of success. A cyclone hit, and the mangroves provided storm protection with additional benefits for fisheries and tourism that a seawall couldn’t offer. It is an example of the application of this framework moving from theory to infrastructure at the city scale.
