Who’s Managing the Earth’s Factory Floor?

Gov Compass Graphic

By Tim Gieseke, author of EcoCommerce 101 – Adding an Ecological Dimension to the Economy.

It has taken a long time to admit it, but after two decades farming and sustainability projects, I realized landscape sustainability is no longer just a technical, scientific or even political problem. It has evolved into a so-called wicked problem of governance and economics. Not evil wicked, but wicked as an on-going social problem with no clear solution or ending. We have outgrown our normal solutions.

This wicked problem emerges from (landscape) systems having  varied outputs, with stakeholders that value outputs differently, and are influenced by organizations with different governance (business culture) styles. The results are low and diffuse environmental values and high and multiple transaction costs. A solution must ultimately transcend these characteristics at the local and global scale.

As a farmer, I recognized the clarity and power of a market signal. If the market signal for wheat was US$6/bushel, I could figure out if I should respond to that and plant wheat or not. What was missing for landscape sustainability was a succinct sustainability signal.

This “signal” concept was applied in a 2011 state-level (MN) project to improve water, soil and habitat resources on 100 farms. Indices and values were used to create the signals. Three “sustainability demanders” used these indices and a value to create their signal; a state government’s value was regulatory assurance, for a cheese processor it considered a bonus on milk premiums and for a bio-refinery it was access to a potential revenue stream for crop residues. From the farmers’ perspectives the indices became a commodity of sorts that were sought by entities needing data to substantiate their sustainability claims and/or meet their objectives.

After a few transactions, it was discovered that the three demanders needed the same data but for different supply chains. The commoditized index, in a way, converted the management of common pool goods of no economic value into exclusive club goods with multiple values. After a bit more research, the index values were connected to natural capital cells; equal-sized units of land to create a natural capital unit (NCU); a unit of trade.

If such a pilot program expanded it could reverse the traditional approach of conservation in the United States where farmers are considered the conservation customers of government and corporate programs by converting them into sustainability suppliers. The possibility of this model increased with the recent advancement of multi-sided platforms; a business model with the capacity to connect multiple user groups to engage, account for and create new values and conduct transactions. The NCU provides the first common denominator to harmonize the hundreds of sustainability programs, policies and projects. An NCU market platform provides transparency to enable a shared governance approach were public policy-makers, private policy-makers, public practitioners and private practitioners to participate in achieving sustainability outcomes where they are most effective.

Perhaps most importantly, a NCU platform can account for the sustainability supply of the landscape and track the changes in an on-going manner. It will enable the economic participants to determine how valuable landscape sustainability is within the public arena of commerce. For example, corporate sustainability officers could identify specific regional and national concerns such as harmful algae blooms and procure both food and NCU commodities to address these wicked social issues.

In a most basic sense, the landscape is the Earth’s living factory floor from which only the outputs and products have been economically valued and the management and maintenance have been assumed to have little or no value; a tragedy of the commons. We must embrace the extent of the issue and assume that if a system is built to harmonize a solution that enough will come.

Note: this article and graphic are based on the contents of the Taylor & Francis / CRC Press book, Shared Governance for Sustainable Working Landscapesto be released August 2016.

Tim Gieseke has managed a farm in Minnesota USA for the last two decades.  During this time he has had diverse careers in government conservation, federal farm policy analysis, watershed research, and is owner of Ag Resource Strategies, LLC.  His business has developed ecosystem service accounting and valuation methods for government, industry and non-government organizations.

He published EcoCommerce 101 (2011) to describe an environmental ‘market signal’.  He recently completed a Taylor & Francis/CRC Press manuscript, Shared Governance for Sustainable Working Landscapes to be released in August 2016.