The Environment as an Asset: Why Capitalism Won't Price Nature
The Environment Is Not a Resource. It's an Asset, and We're Running It Into the Ground.
I want to start with a distinction that sounds like accounting trivia and turns out to be the hinge the whole global economy swings on.
In business, a resource is something you consume. You draw it down, you book the revenue, and when it's gone you go find more. An asset is something you maintain. You depreciate it on paper, you service it, you insure it, and you protect it, because your ability to keep operating depends on it still being there next year.
Every functioning business on Earth knows the difference. Nobody runs a trucking company that treats the trucks as a resource. You do oil changes. You replace brake pads before they fail. You carry the fleet on the balance sheet as something with value, because it is.
Now ask yourself which column the biosphere sits in.
The Problem Isn't That Markets Exist. It's What Markets Can't See.
I'm not here to tell you the free market doesn't work. It does, to a degree, and I've built my own businesses inside of it. Price signals coordinate an enormous amount of human activity without anybody having to run it from a central office, and that's a genuinely remarkable thing.
But a market can only respond to what it can price. If something has no price, it doesn't exist as far as the market's decision-making is concerned. And the single largest thing we have failed to price is the entire natural system that makes production possible in the first place.
So the market isn't lying to you. It's just blind in one eye, and we built it that way.
What Nature Does for You, Every Day, for Free
Consider photosynthesis. Plants, algae, and cyanobacteria pull carbon dioxide out of the air and release oxygen as a byproduct, and terrestrial vegetation alone fixes roughly 120 billion metric tons of carbon a year. Roughly half the oxygen you breathe doesn't come from forests at all but from ocean phytoplankton, including a microscopic organism called Prochlorococcus that wasn't even identified until 1988. It may be the most abundant photosynthetic organism on the planet, and it went unnoticed by science until about forty years ago.
There is no invoice for this. No line item, no vendor, no contract you can terminate. The entire oxygen supply of the planet is provided by a workforce that has never once billed us.
Pollination is the same story with a sharper edge. Somewhere around three-quarters of the world's leading food crop types depend at least partly on animal pollination, and the global crop output riding on pollinators has been estimated by the international science panel on biodiversity at somewhere between $235 billion and $577 billion a year. Bees don't invoice either. When they collapse, growers in places like California's almond country end up renting hives by the truckload, which is the market briefly discovering a price for something it had been getting for nothing.
Back in 1997, an ecologist named Robert Costanza led a team that tried to put a number on all of it. Their estimate for the annual value of the world's ecosystem services came to roughly $33 trillion, at a time when total global economic output was around $18 trillion. When they revisited the work in 2014, the figure had been revised up to somewhere in the range of $125 to $145 trillion a year.
You can argue with the methodology. Plenty of economists have, and some ecologists hate the exercise on principle because they think putting a dollar figure on a wetland cheapens it. But the direction of the finding is not in dispute. The services nature performs for free are worth more than everything humanity produces, and we carry them on the books at zero.
We Didn't Eliminate the Cost. We Mailed It to Your Grandchildren.
Economists have had a word for this since 1920, when Arthur Pigou wrote about externalities in The Economics of Welfare. An externality is a cost a transaction imposes on somebody who wasn't part of it. The factory sells the product, the buyer pays the price, and a third party downriver gets the mercury.
Here's how big that gap has gotten. A 2013 study commissioned for the TEEB for Business Coalition and carried out by the environmental data firm Trucost put the cost of the world's top 100 environmental externalities at about $4.7 trillion a year. The more damning finding was buried in the methodology. None of the primary production or processing sectors they examined would have turned a profit if they'd been required to pay for the natural capital they consumed.
Read that again slowly. Entire industries are profitable only because somebody else is picking up the tab.
Your own footprint tells the same story from the consumption side. The Global Footprint Network estimates that humanity currently uses natural resources at roughly 1.7 times the rate the planet can regenerate them, and that if everybody on Earth lived at the average American standard of living, we'd need somewhere around five Earths to sustain it. You'll see figures as high as six or seven quoted in various places depending on the year and the methodology used, and the exact number is genuinely contested among researchers. What isn't contested is that the number is well above one, and one is all we have.
That deficit doesn't disappear. It gets carried forward. We are running the planetary equivalent of a business that skips maintenance to hit quarterly numbers, and the repair bill goes to people who won't be born for another fifty years and never got a vote.
Why Your Country's Scoreboard Is Broken
Part of why this persists is that our main measure of national success is structurally incapable of noticing it. Gross Domestic Product counts economic activity. It does not count depletion.
Cut down an old-growth forest and GDP goes up. It counts the logging wages, the milling, the trucking, and the lumber sales. It does not subtract the forest.
This isn't a conspiracy, and I want to be fair to the man who built the thing. Simon Kuznets developed the US national income accounts in the 1930s, and he warned Congress in 1934 that you could scarcely infer the welfare of a nation from a measure of national income. He knew the tool's limits. We ignored him and turned his diagnostic into a scoreboard, and now every government on Earth optimizes for a number that treats liquidating your capital base as earnings.
A business that did that would be committing fraud. We call it growth.
The Smartest Thing You Can Do Is Sometimes Not Build It
Now I want to push on something that I think is the real heart of this, and it's the part almost nobody wants to say out loud.
There is a whole category of harm that no amount of clever recycling or carbon offsetting can fix, because the problem was created the moment the thing entered the market at all. Once you introduce a product that generates demand for a substance the biosphere can't process, you have started a process that pricing alone won't stop. Demand for it grows, supply chains form around it, jobs depend on it, and by the time the damage is legible the thing has constituencies defending it.
Plastic is the case study. Bakelite arrived in 1907, mass production took off after the Second World War, and researchers Roland Geyer, Jenna Jambeck, and Kara Lavender Law calculated in 2017 that humanity had produced about 8.3 billion metric tons of virgin plastic through 2015. Of the waste generated, roughly 9% had been recycled and about 12% incinerated. The rest, close to 79%, went into landfills or the environment, where it is still sitting.
Microplastics have since been found in human blood, in placental tissue, and in lung tissue. That's not an accident of disposal. That's the predictable end state of a material designed to never break down.
And here's the part that should stop you cold. The chemist Thomas Midgley Jr. gave us two of the twentieth century's signature environmental catastrophes: tetraethyl lead in gasoline in 1921, and chlorofluorocarbons in 1928. Both were celebrated as breakthroughs. Both were, by every commercial metric of their day, enormous successes. One poisoned a generation's neurological development worldwide, and the other punched a hole in the ozone layer.
Neither of those was a failure of engineering. Both were failures of restraint.
What If the Egyptians Weren't Behind Us? What If They Just Stopped?
I hear a version of this all the time. People dismiss ancient civilizations as primitive because they didn't have electric grids or synthetic polymers, as though the absence of our stuff proves the absence of their intelligence.
Let me lay out what's actually documented, because I don't want to sell you mysticism. There is no archaeological evidence that ancient Egypt generated or used electricity. The Dendera relief that circulates online is read by Egyptologists as a lotus blossom with a serpent emerging from it, a standard mythological motif rather than a lamp. The so-called Baghdad Battery is Parthian-era Iraq, not Egypt, and while replicas can produce a small voltage, no wires, conductors, or plated objects have ever been found alongside them to suggest anyone used them that way. The old claim about no soot in the tombs has a mundane answer too: polished bronze mirrors could relay sunlight deep into a chamber, and salted oil lamps burn remarkably clean.
So no, I'm not telling you the pyramids were wired. But I want to point at the reasoning error underneath the dismissal, because it's the same error that's driving the environmental crisis.
Nikola Tesla spent the early 1900s at Wardenclyffe on Long Island trying to transmit power through the earth and the atmosphere without wires, backed by J.P. Morgan until the money ran out and the tower came down in 1917. He wasn't a crank about the premise, even if the physics of broadcasting usable power at scale never worked out. The point is that a civilization that pulled energy from the air would leave no cables behind. Absence of the artifact you expect is not proof of absence of the knowledge.
Now flip it. What if the more interesting question isn't what they couldn't do, but what they chose not to do?
Ancient Egypt as a continuous state lasted roughly three thousand years, from unification around 3100 BCE to the Roman conquest in 30 BCE. They ran a basin irrigation system on the Nile flood cycle that stayed productive for millennia without exhausting the soil, because the flood renewed it annually. They produced the Rhind Mathematical Papyrus and the Edwin Smith surgical papyrus, which describes head trauma cases with clinical detachment. Whatever else you say about them, they built a metabolism that ran for thirty centuries.
Our industrial model is about two hundred and fifty years old and is already destabilizing the atmosphere. If longevity is the metric, we are not the advanced ones in this comparison.
And civilizations do choose to stop. Ming China ended Zheng He's treasure fleet voyages in 1433 and dismantled a naval capacity nobody in the world could match. Tokugawa Japan sharply restricted firearms production for generations, and while historians argue about how complete that really was, the direction was deliberate. In 1975 at Asilomar, molecular biologists voluntarily halted their own recombinant DNA work and wrote safety rules before restarting, which is one of the few times in modern history that a field paused itself at the peak of its excitement.
The Montreal Protocol in 1987 is the cleanest proof we have that restraint scales. The world agreed to phase out CFCs, and the current scientific assessments project the ozone layer returning to 1980 levels around 2066 over Antarctica and around 2040 for most of the planet. Leaded gasoline was finally eliminated worldwide in 2021. We are capable of not doing something. We've done it before.
So when I say the Egyptians might have been smarter in one specific respect, I'm not making an archaeological claim. I'm making an economic one. A society organized around long-term stewardship will decline to introduce things that a society organized around quarterly returns cannot even see a reason to question. That's not backwardness. That's a different objective function.
What Counting It Actually Looks Like
None of this is theoretical anymore, which is the genuinely hopeful part.
In March 2021 the United Nations Statistical Commission adopted the System of Environmental-Economic Accounting Ecosystem Accounting framework as an international statistical standard. That means there is now an agreed method for countries to carry forests, wetlands, watersheds, and soils on the national books as assets with measurable condition and value. The tooling exists. What's missing is the will to make it binding.
Costa Rica is the working model. After deforestation drove forest cover down to roughly 21% by 1987, the country passed Forest Law 7575 in 1996 and built a payment for ecosystem services program funded substantially by a fuel tax. Landowners get paid to keep forest standing for carbon storage, water regulation, biodiversity, and scenic value. Forest cover has since recovered to more than half the country, and the electricity grid runs on renewables at close to 99% in a typical year.
They didn't abolish markets. They corrected a price. That's the whole move.
Scale that thinking and you get a coherent agenda. Put natural capital on corporate balance sheets so depletion registers as depreciation. Price carbon and pollution at replacement cost rather than at whatever a lobbyist negotiates. Require extended producer responsibility so whoever puts a material into the world owns it at end of life. Post ecological performance bonds before extraction, so the cleanup money exists before the profit does. Add depletion accounts alongside GDP so the scoreboard stops flattering us.
And build in a genuine precautionary standard for novel materials, so that "we don't yet know what this does over fifty years" counts as a reason to wait rather than a reason to ship.
What I Want You to Take From This
I have no problem with people making money. I run businesses. I want you to run businesses, and I want them to succeed.
What I have a problem with is a model that permits you to book profit while quietly billing the difference to people who can't refuse the charge. That's not capitalism working, and it isn't the free market. It's a subsidy, and the party paying it is the biosphere, and after that it's your kids.
We know how to price things. We're extraordinarily good at it. We price attention, we price risk decades out, we price the option to buy a share at a future date. The claim that we can't price a watershed isn't a technical limitation, it's a decision, and decisions can be revisited.
The environment is the only asset every single one of us holds in common, and it's the one asset we've never bothered to value. Change that one entry, and everything downstream of it changes with it.
If this way of thinking lands with you, it's the foundation of my book Nouveau Economics: Where King Left Off | Nonviolent Resistance, Natural Capital, and Ecological Justice. It picks up the economic argument Dr. King was building toward at the end of his life and carries it into the century he didn't get to see, laying out what natural capital accounting and ecological justice look like as a working economic model rather than a slogan.
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