Blockchaining ecosystem services to provide natural capital accounting
By Elaine Richmond and Jonathan Riggall
If Natural Capital Accounting is to be taken seriously by decision makers, those driving the agenda must be early adopters of the crypto-accounting mechanisms and language that will allow modern asset evaluation, or risk becoming irrelevant in the future financial transaction markets.
A digital revolution is needed in the environment sector
The environment sector is often culpable of being behind the digital technological curve, especially in our collective approach to expressing and sharing data.
No wonder globally significant issues such as climate change fall on deaf ears if the only opportunity for the global audience to understand the topic is to read thousands of pages of academic studies lodged in scientific journals.
The UK environmental consultancy sector is also guilty of not disseminating our knowledge effectively. Collectively our ecological studies, acoustic reports, air quality measurements, and health assessments often end up as static pdfs on a website or mapped behind protected firewalls.
Even our web-based story maps (often cited by the sector as digital innovation) have no dynamics attributed to them.
Ultimately the purpose of the evidence we create is to achieve a clients’ goal (planning or consent), hence its eventual destination. But this evidence base could offer so much more if our entire industry came together to change the status quo. The use of big data could contribute to a better understanding of our natural world.
A Blockchain ecosystems ledger
At Blockchain Live this year, the number of times the word ecosystem was used to describe the dynamic interactions of information across trading platforms was breathtaking. How ironic that our actual ecosystems are not afforded the same consideration within the 4th Industrial Revolution; the new technologies that are fusing the physical, digital and biological worlds.
This could change. Very simply. DEFRA or the Inland Revenue should require all environmental data collected in the UK to be logged in a countrywide environmental asset ledger. This precedent is already set through DEFRA’s Open Data Strategy with web-based information readily available for fisheries, bathing water and flood risk management. Should the next step for this centralisation and management of data be to value our entire natural capital?
The National Biodiversity Network (NBN) Atlas currently provides the largest collection of biodiversity data in the UK. Data partners are widespread, including environmental record centres, conservation bodies and special interest groups. A handful of environmental consultancies who purport to provide data back to record centres may be ahead of the game, but it is far from consistent across the industry. How much more valuable would this data set be if it were mandatory for consultancies to contribute data back through irecord at the time of submitting a planning application or DCO consent.
Clean data is the first critical part in accounting for ecosystem services. It will be this data that allows transactions (a.k.a impacts) to be measured in real time. This should be the starting point for Natural Capital Accounting in the UK.
By creating the Natural Capital Asset Data, the use of Blockchain Ledgers can far more effectively drive and account for the transactions being made on our natural environment.
Alongside this Artificial Intelligence, learning and probability driven algorithms can replace subjective opinions of likely impacts to deliver quicker and more balanced decision making.
Embracing the digital revolution, the environment sector will ensure good outcomes for the environment; ignoring could make the environment sector irrelevant. The real challenge is how can we capture and monitor the change in natural capital over time?
Currently the approaches to Natural Capital Accounting are in immediate danger of becoming irrelevant. The starting point for Natural Capital Accounting appears to be focused on excel spreadsheets. In the short-term, this will stymie any attempts to effectively use data as it cannot be easily extracted or integrated through computational models. How can we use and expand the data already collated through Conservation Evidence or NBN gateway and translate this into bitchain technology?
The World Forum on Natural Capital states that ‘Natural Capital can be considered priceless, but not valueless’. There is general consensus on the need to measure and value natural capital, but something as complex as an ecosystem can simply not be rationalised down to a spreadsheet. It needs a digital architecture that is as dynamic as the asset being recorded.
The greatest value for Natural Capital Accounting in adopting a digital economy approach will be the commonality in language with the finance sector. A common language will lead to a common understanding of the value of ecosystems, which in turn will see them afforded the protection they deserve, like the federal reserve.