Tag Archives: natural resource management

Failure

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Springwood golf clubHow do you know when it is you who has failed or when the system has failed? Is it possible to tell the difference or even what failure is at all?

Everyday life is enough to trigger such anguished questions in all of us. Should we ‘man up’ and take responsibility or go the way of the mountaintop and realize that nothing is ever fired directly at us?

Recently a series of events made my own thoughts about failure acute.

First I enjoyed a delightful [if somewhat rainy] charity golf day to raise money for bushfire victims. The local community rallied as it has done consistently since 193 homes were lost in a fire that an ecologist friend of mine described as a huge blowtorch.

Sponsors showered golfers with freebies and the golfers duly purchased vast numbers of raffle tickets and made generous bids in the auction when the golfing was done. The clubhouse was packed with people and there was a palpable sense of unity in a shared cause… and that isn’t so common in these distracted days.

Out on the course it was a team game [the scramble format for those in the know] and we were doing ok. We had an ideal handicap mix and the will to win that seems to gush out of every golfers pores no matter their [in]ability.

Coming to the last two holes we knew we had a bit of chance but really needed a couple of birdies. Drive, 6 iron, putt gave us one. Then, a 9 iron to two feet. That was two and enough for a credible 4th place. We were quietly chuffed with that.

Not a failure at all and, for me, sticking that 9 iron when it [kind of] mattered made me quite proud of myself. Such moments make the memories of an amateur sporting life.

I’ll pass over the conversation a few days later with a social media marketing guy who politely said I would never make any money from my books along with the ongoing anguish that is every consultants daily grind — clients who, bless their cotton socks, don’t really want the help you are offering — and cut to the chase.

The system of information gathering on how the environment works in the state of NSW is, abruptly, surplus to requirements, along with the conceptual framework that supports environmental decision-making.

The new[ish] state government have thrown out statewide natural resource management targets and cut the guts out of the human capital and budgets that previously gathered data on the health of the environment. A brutal dismantling that stinks of the political polemic.

Why would anyone do this? Knowledge is power and always has been. The environment is and always has been the foundation of our success, not to mention the source of what keeps each and everyone of us alive. So why stop trying to understand it by scrimping on the measly current spend on collecting the data?

Perhaps it is a sinister plot, a backlash against all those closet greenies in the previous government who had run the show [somewhat corruptly as it turns out] for more than a decade. Or, more worryingly, a belief that natural capital is inexhaustible and that humans were invented to mobiise it into wealth, fast cars and tea parties.

Whatever the reason the news hit me as a monumental personal failure. Clearly I had nothing to do with the decision or any influence over it either way and yet I took it personally.

Even as I fought the illogical feelings with personal pep talks and a viewing of Despicable Me 2, anguish was taking hold. It has since solidified into a funk that if I don’t shake it loose will sit for a long time in the pit of my stomach.

Of course there is some justification for my malaise.

Since the early 1990’s I have been variously teaching, researching, advising, criticizing, developing and talking up environmental monitoring — I even switched out of academia into the risky world of entrepreneurship to build an environmental monitoring company that for a time helped accumulate data and understanding.

Wearing my consultant’s hat I have prepared countless reviews of strategy and provided policy advice on MER that has consistently talked it up and tried to explain the value proposition. Recently I even came up with some new approaches to data analyses that will add more value to the raw numbers.

And it feels like it was all for nothing.

Only worse, it also feels like I should have done more to make it obvious, even to blind Freddie, that monitoring the environment was worth it for everyone.

As I write there is still a lead weight in my midriff that I am sure will take some shifting…

But this too shall pass.

Time will lighten the load and another golf game will see a white ball fly and land somewhere near the flag.

I hope.

Natural capital

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Okavango delta Botswana.jpgSuppose you are given $100,000 as an inheritance and told to live off it for a year. You are also told not to worry too much because there would be more money from the estate coming your way in the future.

It would be a pretty safe bet that most of us would happily spend at least some of this $100,000 bonus — perhaps a new car, maybe a nice holiday or two.

The cautious amongst us might put most of the money aside for a rainy day knowing that in the real world such windfalls are rare and we would be right not to be taken in by promises of it being windy again next year.

Now suppose that the $100,000 was definitely a one-off with no unexplained windfalls to follow. Receive the capital as a one off and a few more of us might decide to invest it and only spend the interest — invested wisely $100,000 would yield enough return on investment for a nice vacation each year for years to come.

Now suppose that the relative who left the money to you was not quite so well off or maybe there were a few other relatives to share the legacy and the sum bequeathed was $1,000.

It is unlikely that this amount would be spent on shares, bonds or bullion.

More likely it would be absorbed into the current account of everyday life and barely touch the sides.

Now consider an admittedly rare and unlikely situation where the relative was Buffet-like wealthy and left you a more serious $10,000,000.

You could spend all of this in a year but you would be getting quite a lot of ebay deliveries. Even with the attentions of the taxman, most normal folk would have trouble spending the annual interest on this sum.

If the money didn’t go to your head the interest on investment would see you and your family live like kings indefinitely.

All this makes sense. It has been explained many times over and the subtleties consume the days and nights of many a financier.

So here is a question. Why do we ignore all these fundamentals when it comes to natural capital?

We treat natural capital — the fundamentals of nature that supply useful goods and services — as though it were in the $10 million bracket: infinite, and inexhaustible with endless yield.

Admittedly there is some justification for this. Agriculture has leveraged natural capital most efficiently. We know this because there are now 7 billion of us. The mines and drilling rigs still bring minerals and fossil fuels to help us create goods and power with apparently no end on sight… yet.

Only it is just like the $10 million. It sounds like a huge sum for most people. And yet just like the majority of lottery winners, even big sums can be spent given enough profligacy

It is time that we both learn and accept that natural capital is finite and that we should pay the same attention to nurturing its yields as the investment bankers do attending to their profits.

Environmental value | perception is everything

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Not a HyundaiSuppose for a moment you are in the market for a new car, a nice sporty hatchback to help you ease into mid-life.

And what if, due to some bizarre rift in the fabric of reality, I told you that for one week only a Mercedes and a Hyundai were the same bargain price. You could snap up either a zippy, sexy and undoubtedly metallic new Mercedes or equally zippy and metallic Hyundai for $20 grand.

What make would you choose?

It would be the Mercedes of course — and why not? The Merc has prestige written all over the badge on the bonnet.

As it happens and despite similar specs on performance, size and reliability, there is roughly $15k difference in the retail price in Australia between a standard Hyundai and the bottom of range Mercedes hatch.

In the real world without rifts where most folk are budget conscious it is no surprise that more Hyundai units are sold. And yet there are still enough people who value the Mercedes enough to fork out the extra cash — almost twice the amount to do essentially the same job.

Perception of value is obviously a powerful force.

The extreme of this for me is the handbag. Its functionality is always that same. Sure its looks vary from brand to brand but enough for the name on the clip to mean a handbag could retail for $50 or $5,000? Bizarre.

Here is another example.

Suppose you are accused of a crime that you did not commit. It’s a complex fraud charge and the police arrest you. Right away you call the best lawyer you can afford for even though you are innocent you know it will need the $500 per hour worth of expertise to prove it. Naturally as you are innocent and the judge agrees, the court awards you damages and you recoup all your expenses.

My point though is that at the time you gladly pay what it takes. In that circumstance of false accusation there is plenty of value in that $500 an hour.

Perception of value is also a highly contextual and personal thing. This is just as well. Individual preference for value helps create much of the complexity and variety in our society and we are the better for it. If you have the means and derive sufficient pleasure from a $5,000 handbag, go for your life [although part of me can’t get past the reality that $5,000 is roughly what it costs to keep 7 Ugandan children in school for a year].

So we come to environmental value and the same rule applies: perception is everything.

In western economies the majority of people who live on and off the land value it because it provides their livelihood. A paddock is a sheep factory and a field a grain production unit where primary production is harnessed to deliver goods for sale.

Of course there is some heritage, love of the great outdoors, feelings of wellbeing and social good that comes from growing food but ultimately it is about the production and sale of a commodity. And this production value is reflected in the price of goods and the production potential that is reflected in land value of rural properties.

Except that the end buyer of the goods, the consumer, never sees the paddock. She only sees the produce and the price sticker in the supermarket. The value to her is in what she can get to feed her family for her weekly budget, or in this metrosexual age, his weekly shopping budget.

The retailer does not see the paddock either. He [or she] just negotiates a wholesale farm gate price or better still enlists a supplier to do all that dealing. These business people see value in cost reduction and the ability to bargain down. And they use the powerful levers of volume and distribution to achieve the best price.

Their perception of environmental value is profit and we are grateful that they focus on it. Without this system of wholesale production and efficient retail we would have far less money to spend at the movies.

We could say that in this scheme of producing, buying and selling produce environmental value does not exist. The value is in the goods that we manipulate the environment to produce.

‘Ah but…’ I hear you shout. We do value the environment for itself. Why else would we have national parks, laws to prevent clearing and pollution and whole bureaucracies assembled to manage all our development activities?

Well yes, there are some picturesque, relaxing or wild patches of the environment that we ‘value’ and sometimes pay good money to visit. There are also places of cultural significance that mean a great deal to us. And yes, we have planning in place to allocate and sometimes restrict activities to preserve and maintain areas that we hold dear.

But, and it’s a Kardashian sized butt, these are not direct, back pocket values.

We ‘value’ conservation, wilderness, cultural heritage and are prepared to forego some development to retain it — an opportunity cost that we collectively wear — and yet we rarely ever feel that we have actually paid money for this. Nor I would suggest would we pay directly if pushed.

Back in the day in a lecture I gave to my biodiversity class, I asked the students what they would be prepared to pay to know that elephants still existed in the wild in Africa [the technical term is ‘existence value’]. What from their wallets or purses would they prepared to give, right there and then? $5, maybe $10 they said, with concern on their faces.  That was until I actually went round with a hat as though moving through the church pews and tested their commitment. None were actually able to part with their cash.

 

Radical suggestion

So here is a radical suggestion.

In our modern, city orientated system for living, there is no environmental value beyond a small suite of goods and services what we are prepared to pay for. No fiscal value to what the environment gives beyond what we can buy and sell because we have no system beyond cash to detect value and without cash our valuation senses have become numb.

If true I would say that this is not a failure of economics or even an unhealthy preoccupation with profit. It is actually a failure of perception. We simply do not know that we have a debt to the environment. We are not aware that we have been and continue to mine its resources without accounting the full cost.

No one has put in the marketing dollars to create the brand ‘environment’ equivalent to the Mercedes logo stamped onto the bonnet. Not surprisingly most people do not see the environmental value and happily continue to purchase the goods at bargain prices.

Even though we know that we are degrading soils, wasting almost half the food we produce and sending valuable resources to landfill, none of these things matter at the checkout. There will be few folk willing enough to buy the $4 net of sustainably produced onions when there is a net of equally good looking onions in the same isle at $1 because our perception of value is right there in the store. It happens as we compare the price per kilo to what is in our back pockets. We find it hard to make purchasing decisions on values that are distant and intractable.

 

A challenge

Here is a challenge for you.

Every time you make a purchase of anything from a tomato to a television, force yourself to consider the environmental value in the goods that you are about to buy.

Do not use these thoughts to make yourself feel guilty, go ahead and buy anyway, but do have a thought for what happened in or to the environment to make your purchase possible.

 

TED | Alan Savory

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CattleTED lectures are a neat idea. Somehow they have managed to legitimise thinking outside the box and I suspect we don’t fully appreciate how important this is.

Most ideas that stick come from our current paradigms for anything really new must be pretty special to succeed in a society dominated by commerce and naturally conservative mind-set. So ‘good on ya’  TED.

About a decade ago I met Alan Savory on one of his trips to Australia to promote his ideas on holistic management. It was an interesting encounter [for me at least] that took me back to my time in Zimbabwe in the late 1980’s and then to thoughts of what it must have been like to both wander through the bush and the corridors of parliament in the time leading up to Zimbabwean independence in 1980 as Alan Savory had done.

He claims in his book that it was a combination of his science training, days on end tracking in the bush, and his time in politics that brought him to understand the importance of intensive, timed grazing by larger herds for the health of our grazing lands. Now he has extended his idea as a solution to two huge global issues: desertification and climate change.

Check out his TED lecture, it starts slowly but is worth persisting to the punch line.

http://on.ted.com/Savory

Something unexpected

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Teaspoon of soilHere is an interesting situation, almost unimaginable.

You are approaching your 60th birthday and are about to be surprised by an unexpected inheritance from a wealthy relative that you barely remember.

Many years ago your great Aunt, who was always rather odd, left you some money.

She stipulated that you could only access the balance of the funds when you are 60 years old, 40 years on from when the money was deposited.

The good news is that the initial capital she left was $10 million, a huge sum even if nobody quite knew how she came to be so wealthy. The bad news is that the $10 million capital has lost value to the tune of 1.3% a year.

Bummer. Not only did you have to wait to be rich, but also each year there were 1.3% fewer funds. Still, in a few months time when you reach 60 there will be a bank cheque for $6 million in the post, more than enough for a world cruise or two and a luxurious retirement.

Your younger brother was less fortunate. The dowager only bequeathed $1 million to him under the same rules. He has to wait longer for his funds and gets a much smaller cheque of $593,000.

A tidy sum for sure but not quite enough to fund his retirement.

Your three cousins, who soon found out about the unexpected inheritance, were also hoping for something from this distant relative that they only just realized they had. Sure enough, she did not forget them and deposited $100,000 each for when they reach their 60th birthday. They get $59,250 — certainly better than a kick in the teeth but hardly a pension fund.

On the first of your world cruises you mull over the odd situation of financial capital failing to appreciate.

What if your retirement savings, that before your great slice of luck were your only means of support in old age, were being eroded at 1.3% a year?

Each year the amount you had saved up went down a bit, not much admittedly but it went down. Likely you would seek to reinvest your capital quick smart rather than run the risk of not having enough funds for your retirement. Also likely you would fire your investment analyst and rant at everyone you could, looking for a scapegoat for such a fundamental error.

And what bad news it was for your brother. If he had known about that $1 million all those years ago and invested it wisely he would have more money than you right now.

As you sip a G&T on the sundeck you can’t help thinking it funny what we take for granted.

 

Another unexpected thing

Soil scientists have estimated that the amount of carbon in agricultural soils in Australia has declined by 51% in the last 40 years — that is 1.3% a year.

Soil carbon is a critical environmental asset that drives plant growth because carbon fuels soil biological activity, promotes soil structure, aids infiltration and moisture retention and supports nutrient exchange. Handy material to have and not something to be squandered.

What is worse is that science has little idea about the initial carbon stocks [the capital]. It might have been the equivalent of $10 million in which case we can keep going for a while.

We might even have time to reinvest by adopting smart agricultural practices and get the capital to appreciate again.

The worry is that we may be as uninformed and as poorly off as your cousins.

 

Here is the original scientific reference for loss of soil carbon [you can find a copy on Google Scholar]:

Zhongkui Luo, Enli Wang, & Osbert Jianxin Sun (2010) Soil carbon change and its responses to agricultural practices in Australian agro-ecosystems: A review and synthesis. Geoderma 155 (2010) 211–223.

 

And some more articles on soil carbon

Carbon in Soil – Why Organic Carbon is So Important

Soil – the missing carbon sink

Last chance to see

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Stephen Fry is prolific, so much so that it is hard to avoid him. Fortunately this is entirely tolerable for the man is smart, erudite, witty, and has a passion for knowledge that is as important as it is infectious.

I did, however, find one occasion when he might have erred.

An episode of his wildlife series “Last chance to see” was filmed in Madagascar, where the unlikely adventurer went in search of the curious and elusive aye-aye, a type of lemur. The search criss-crossed the island to find the few remaining patches of forest where there might be a sighting, only to finally catch up with one in a coconut palm in a villagers back yard.

Along the way the film crew passed vast swathes of deforested land that clearly left an impression and brought forth laments on the loss of unique biodiversity once the trees are felled.

Much of the cleared land was planted to sisal that grows well in the Malagasy climate and produces a cash crop for farmers. Fibre from sisal is used in packaging in the west that is biodegradable and often labeled as green. The irony was not lost on Mr Fry.

Madagascar produces around 9 million tones of sisal, about 4% of global production, and a seemingly trivial mount in the grand scheme of things.

Surely the unique biodiversity was worth far more.

Not for the farmer, for cash is cash. And if there is, right now, a market for sisal and it is easy enough to grow then it is a profitable use of land. And if it is more profitable to the farmer than an aye-aye, then sisal it is. Not because it is the best use of the land but because, like the rest of us, the Malagasy farmer needs to make a living.

The same happened in Australia. Sheep are not the smartest use of the dry and dusty outback, but at the time there was a market for wool in Europe and wool was durable enough to travel. So like sisal, sheep production was profitable – handsomely so for some on the less marginal country.

The last chance to see is because we all want to make a living and because we make that living from the options available to us. It is hard to make a living from the sale of ecosystem services, or from forest protection or taking people to see an aye-aye; usually far too hard.

What we need to do is to be smart about the available options for making a living so that the one that is easiest does not become the default.

 

A food security challenge

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I have been writing a few articles lately about food.

Oddly not in the culinary sense, given the profusion of cooking shows and what seems like an exponential growth in the number of celebrity chefs.

I am more interested in ‘How we will grow enough food‘ and whether we can cope with a global dietary change given ‘What we eat‘.

An observation made by a friend of mine who recently retired from a distinguished career as a public servant in agriculture and natural resource management gave me pause.

After observing the agricultural community in Australia for several decades his comment was that farmers take up practices that improve productivity and sustainability when times are good.

When it’s tough they just do what it takes to stay viable.

The implication of this logical and insightful observation is that future food production is dependent on how well farmers are doing now, in the immediate.

Those of us who get our food from commercial agricultural production (nearly everyone in agricultural economies) have become quite used to highly reliable food quality, variety and supply. And to keep the supply consistent the farmers relax and adopt sustainable practices when the weather is good and the seasons have behaved.

The likely response to drought, flood, frost and heat waves, or soil degradation is do what you can to get some kind of crop to market. This is because the market demand requires it and, as a business, the farm must at least cover its costs or it goes out of business.

The same response occurs when input costs rise. Do what you can to keep the business viable. In short, get some product to market.

This understandable response is a food security challenge, especially where the bulk of food production comes from the small to medium size businesses that we call farms.

If farm viability is so important to both the market and the individual business then there is little to stop exploitative practices when times are tough. At the margins risks will be taken just to keep the business going; because the alternative is the businesses go under. We do it in manufacturing, retail and service sectors so it should be no surprise that we do it in agriculture.

We will save the government subsidy issue for later. What we might think about is the challenge to good practice presented when times are hard.

The reality is that good practice will only be good if it results in some buffering of economic returns when times are tough. Sustainable practices are those that keep inputs to a minimum, make optimal use of the conditions even when its warm and doesn’t rain, and end up with some salable produce.

Where this is not possible, then the farm ceases to be a business. And given that in our current model we buy almost all our food, business failure makes food supply far less secure.