A Strategy for Investing in Nature
Aligning our financial systems with the patterns and principles of living systems.
Short of Context
- We have come to a stark realization: we have overstepped our planetary boundaries, those invisible thresholds that, when crossed, threaten the stability of our biosphere.
- The economic risk of further losing biodiversity is monumental, as this natural wealth underpins an estimated 60% of global GDP.
- According to the World Economic Forum, the annual amount needed to stop biodiversity loss from now until 2030 is around $850 billion.
- In stark contrast, $7 trillion is currently allocated to subsidies that actively destroy biodiversity.
- The investment required to halt biodiversity loss and foster restoration amounts to just 7.3% of the world’s GDP.
Link to more Broader Context here
The transition will not be without complexities; ceasing harmful subsidies will have short-term economic repercussions that must be carefully managed.
However, this challenge is not insurmountable.
This brings us to the heart of the issue: how we design our investment strategies.
The key to unlocking the potential of biodiversity lies in aligning our financial systems with the patterns and principles of living systems.
This is not merely a matter of redirecting funds, but of fundamentally rethinking our approach to economic development. We must adopt a mindset that sees the economy as a subset of the ecology, recognizing that true prosperity can only be achieved when we operate within the bounds of nature’s limits.
To move forward, we must embrace a new paradigm — one that honors the interdependence of all life and prioritizes the health of our ecosystems. By doing so, we not only ensure the survival of countless species, but also secure the foundation of our own economic stability and wellbeing.
This is the promise of a regenerative approach: a world where economic activity is harmonized with the rhythms of nature, fostering a resilient and thriving biosphere for generations to come.
Harnessing Technology for a Regenerative Future
The sheer scale of investment required to halt biodiversity loss and foster regeneration is staggering. It demands a process that not only guarantees effective use of funds but also ensures transparency and accountability. Here, we confront the skepticism that has long plagued the carbon market, a space often criticized for its opacity and inconsistency.
Yet today, we stand at the threshold of a technological revolution that offers unprecedented solutions — blockchain and artificial intelligence.
Blockchain technology provides a secure, transparent ledger that can track every transaction and action taken within the biodiversity investment space. This level of transparency is crucial for building trust and ensuring that every dollar is used as intended. Each transaction can be traced, verified, and validated, creating a system where accountability is built into the very fabric of the process.
Artificial intelligence, on the other hand, offers the capacity to create verifiable and certifiable metrics for biodiversity impact. AI systems can analyze vast amounts of data, providing insights into the effectiveness of various interventions and allowing for continuous improvement. This technology will be instrumental in monitoring ecosystems, understanding the intricate metrics of biodiversity, and ensuring that the efforts are making the desired impact.
Furthermore, the process of verification and certification will be streamlined by AI, reducing the costs and time associated with these critical tasks. AI-driven systems can continuously monitor and assess biodiversity metrics, ensuring that the data is accurate and up-to-date. This not only enhances the credibility of biodiversity investments but also makes the entire process more efficient.
The world is no longer linear; we are now on the vertical of every exponential development curve driven by artificial intelligence.
I invite you, for a moment, to step out of the linear thinking in which we have been trained to reason by the scientific method, and be open to thinking from a systemic perspective.
Mo Gawdat, a former chief business officer at Google X, predicts that AI will soon be a billion times smarter than humans.
ChatGPT 3.5 has an IQ of 155, close to Einstein’s 160, and ChatGPT 4o is ten times smarter than 3.5. We’ve overshot Moore’s Law, and the implications are profound. All MMVC will eventually be managed by this new intelligence, transforming our approach to sustainability and beyond.
The evolution of monitoring systems, powered by exponential technology, ensures that the Measurement, Monitoring, Verification, and Certification (MMVC) of biodiversity investments is transparent and trustworthy.
With blockchain and AI, we can create an accountable and efficient system that supports the regeneration of our natural world. These technologies, driven by the exponential growth of artificial intelligence, enhance our ability to manage and verify complex ecological data, fostering a new era of environmental stewardship and sustainability.
The process of Certification, Assetization, Securitization, and Trading (CAST) is also addressed through these technological advancements.
We have already seen the potential of these technologies in the realms of cryptocurrency. These examples demonstrate how blockchain and AI can transform complex systems, making them more transparent and efficient.
By applying these lessons to biodiversity investments, we can create a similar framework that ensures the integrity and effectiveness of these crucial efforts.
The integration of blockchain and AI into the biodiversity investment process represents a transformative step towards a sustainable future. These technologies provide the tools needed to ensure that investments are used wisely, impacts are accurately measured, and results are transparently reported.
With these systems in place, we can confidently move towards a future where economic activities support, rather than undermine, the health of our planet.
Shifting Our Focus: Designing What to Measure
In the quest to halt biodiversity loss and foster regeneration, it’s easy to become entangled in the vast array of metrics available.
But the true challenge lies not in “how” we measure, but in “what” we measure and “who” is measuring.
Understanding this is critical, as it directs our efforts towards meaningful, transformative outcomes.
Let’s start with the “what.” We must move beyond a purely scientific, reductionist, or traditional economic viewpoint. Instead, our measurements need to be rooted in the principles of living systems thinking, complexity theory, and system design.
Understanding living systems is fundamental to grasping the intricate web of life that sustains our planet.
A poignant example of the difference between reductionist and holistic approaches to understanding nature can be drawn from a childhood memory of a zoology class.
When I was nine years old, our zoology professor, in an attempt to teach us about a frog, killed it with chloroform and dissected it, exposing its intestines, lungs, and heart.
The frog, once vibrant and full of life, had lost its essence — its frogness.
Having spent many holidays immersed in nature, at my grandfather’s farm, where he would gift us frogs, snakes, and baby pigeons, I had developed a deep love for frogs.
The dissection left me in shock, for it stripped the frog of its living, breathing reality.
The true way to study a frog is to observe it in its natural habitat — the pond. It is here that we can witness its behavior, how it interacts with insects, how it fits into the ecosystemic balance, and the intricate relationships that it forms within its environment.
We are in need of a profound shift in our worldview — a new cosmovision that sees the world as a complex, interconnected system rather than through the fragmented lens of reductionism.
In the pond, the frog is not just an isolated specimen but a vital part of a dynamic web of life, contributing to and sustained by its relationships with other beings. By understanding these living systems, we honor the integrity and interconnectedness of life, fostering a deeper appreciation for the natural world and our place within it.
This holistic view is central to regenerative design, which aligns our actions with the patterns and principles of living systems. By embracing this approach, we can create solutions that not only address immediate needs but also support the ongoing health and vitality of the entire ecosystem.
Regenerative design does not aim to create products through linear cause-and-effect relationships. Rather, it seeks to design processes that mimic the holistic, interconnected nature of ecosystems.
Here, it’s important to introduce the “who.”
Who is capable of designing these processes?
The significance of who designs these processes cannot be overstated.
It encompasses the mindset, the capacity for understanding, the perspective (worldview) with which we approach the creation of these systems.
We must recognize that this is not a competition but a quest for a collective, co-creative, planetary solution. No single mind or institution can resolve this alone. It requires us to unite in creating co-evolutionary processes that foster co-evolution between humans and nature, and among humans themselves.
This vision offers the best opportunity to create effective, regenerative, and sustainable solutions. This process-oriented thinking is essential for creating flows of regeneration that are self-sustaining and self-regenerating, aligned with life itself.
The Seven Principles of Regenerative Design, based on the work of Carol Sanford and Bill Reed, and principles of regenerative economics by John Fullerton and regenerative cultures by Daniel Christian Wahl, offer a clear roadmap for this journey.
These principles guide us in creating systems that are not only sustainable but also regenerative, fostering the health and vitality of both human and natural communities. By integrating these frameworks, we can design processes that embody the interconnectedness and complexity of living systems, paving the way for truly regenerative and sustainable solutions.
When we apply these principles, we move away from dissecting a frog into its parts. Instead, we open ourselves to understanding the essence of “frogness.”
Our aim shifts from aligning our objectives with financial goals to creating thriving processes that generate holistic wealth.
These principles enable us to grasp the essence, potential, developmental capacity, reciprocity, and integral interdependent components that constitute wholeness.
Instead of viewing the frog as a collection of pieces, we see its interrelationship within the ecosystem. Understanding living systems is fundamental to grasping the intricate web of life that sustains our planet.
We start to see our objectives as ongoing processes that require continual nurturing and adaptation. This perspective is crucial in addressing the complex challenges of biodiversity and sustainability. By focusing on processes rather than products, we ensure that our efforts are flexible and resilient. We are not just solving problems; we are designing systems that inherently support regeneration and sustainability. This shift enables us to create solutions that are effective in the short term and sustainable in the long run.
Ultimately, meaningful measurement lies in aligning our metrics with these regenerative principles. It’s about understanding that the health of our ecosystems, economies, and communities are intertwined and that sustainable success comes from nurturing these connections. This holistic approach, grounded in the wisdom of living systems, provides the foundation for a truly regenerative future.
The principles of regenerative design include humans in the equation.
This vision understands that humans are part of nature and need to co-evolve in a mutualistic, symbiotic relationship with it. This needs to be a co-evolving regenerative flow.
These MMVC processes, when integrated into a common platform of nested ecosystems, will need to understand these bio-social relationships and the feedback loops of anthropogenic impacts and interventions.
Proposal
We propose a regenerative design framework that aligns, and provides long term solutions, to the Global Biodiversity Framework.
This framework guides us in crafting solutions that are sustainable and regenerative, paving the way for a future where economic and ecological systems flourish together.
This cannot be achieved through rationalism alone; it requires empirical design and an intimate relationship with nature.
We are engaging in a co-design process with Nature, recognizing her as an active partner in this endeavor.
Our framework is place-based, implementing an MMVC (Measurement, Monitoring, Verification, and Certification) and CAST (Certification, Assetization, Securitization, and Trading) process.
This approach integrates these systems directly within the landscape, ensuring methodologies are grounded in real-world applications.
We are designing a systemic process that constructs digital models of underlying biodiversity systems, integrated into a Bayesian framework utilizing AI, blockchain, machine learning, and advanced monitoring systems.
By designing for potential and possibility, we aim to foster emergent properties that lead to healthier and more robust ecosystem services.
This regenerative design framework incorporates the patterns and principles of living systems, ensuring our approach is holistic, adaptive, and aligned with natural ecosystems’ inherent wisdom.
By working closely with nature, we create solutions that are effective, resilient, and sustainable, fostering a future where humanity and biodiversity thrive together.
A Vision for a Nested Commons
Our vision is to design a multi-layered, nested commons, capturing the zeitgeist of our moment to create new systems of organization.
At the heart of this vision lies the concept of a commons — a resource managed collectively by a community, ensuring equitable access and sustainable use.
I had the honor of meeting Elinor Ostrom in 2010 in Sweden, an encounter that deepened my understanding of the commons. I wrote extensively about commons in my book Homo Hacker in 2016.
Our framework envisions a design that, in situ — meaning land-based — implements an MMVC (Measurement, Monitoring, Verification, and Certification) and CAST (Certification, Assetization, Securitization, and Trading) process. This approach grounds our methodologies in real-world applications while embracing the interconnectedness and complexity of living systems.
It embodies principles of regenerative design, economics, and cultures, providing a roadmap for creating systems that are not only sustainable but regenerative. This vision unites us to create co-evolutionary processes that foster the health and vitality of both human and natural communities.
These multi-layer commons are integrated and interdependent, forming a nested system. Initially “fields of nodal intervention””, the goal is to evolve them into a comprehensive planetary framework.
To illustrate, let’s focus on two commons: the land commons and the digital commons.
The Land Commons: This place-based commons focuses on biodiversity, resources, and ecosystem services, embodying the shared management of land and its natural resources. It fosters a mutualistic, symbiotic relationship between humans and nature, ensuring land use practices support both human communities and the environment. By integrating local stewardship with broader ecological goals, this approach addresses immediate resource management needs and lays the foundation for a regenerative future where human and natural systems thrive together.
The Digital Commons
The digital commons represents a “digital twin” of the living ecosystem, replicating its systemic behavior. It measures the impacts of human interventions and monitors species relationships, revealing their contributions to overall ecosystem health.
Data is fed into a Bayesian model, a statistical tool that refines its predictions with new information. Starting with prior knowledge, the model updates as more data becomes available, making it effective in dynamic ecosystems. With AI integration, these models become more accurate and efficient, enhancing real-time ecosystem management.
We define this as a commons because it is a shared resource managed collectively by the community, fostering a co-evolving relationship between biodiversity, ecosystems, and human activity.
Leveraging blockchain and AI, this commons creates transparent, accountable, and efficient systems for collective management, ensuring digital stewardship that supports environmental sustainability and human well-being.
Our task is to transform Cartesian systems — where humans are seen as separate from nature — into dynamic systems that prioritize the whole. By leveraging exponential technologies and systemic algorithms, we replicate living ecosystems digitally, understanding feedback loops and anthropogenic impacts.
Through digital biology, we gain a comprehensive understanding of ecosystem behavior, allowing us to monitor and manage interconnected dynamics effectively. This ensures our interventions enhance the resilience and sustainability of the natural world. We envision a digital commons that values ecosystem services and applies interventions to enhance the system or mitigate negative impacts, considering multi-order effects.
AI will understand the patterns and principles of living systems, developing systemic comprehension and creating regenerative flows aligned with these principles. This approach applies across various ecosystems, recognizing their nested nature and applying regenerative design principles accordingly.
These digital commons can receive investment offerings and manage them to promote ecosystem regeneration and sustainability. Serving as an entry point through biodiversity credits and nature-based currencies, they facilitate the conversion of financial interventions into systemic ones.
The digital commons will manage investment decisions collectively, transparently, and audibly through blockchain technology, creating a robust system where investments and impacts are continuously monitored, verified, and adjusted to benefit the whole.
(more on how this would work coming up soon)
This ensures that the monetization of ecosystem services is equitably distributed among the “commoners “— those who contribute value to the collective resource.
By defining commoners as integral participants in the ecosystem, we ensure that the wealth generated from these services enhances the wellbeing of everyone involved.
This principle acknowledges that those who contribute to the health and value of the collective resource deserve a fair share of the benefits.
It creates a system where economic gains are not only shared equitably but also reinvested into the community and environment, fostering a cycle of regeneration and mutual support.
This approach underscores the interconnectedness of our actions, ensuring that both human communities and natural ecosystems thrive together.
In this way, we move beyond mere financial transactions, cultivating a deeper, more sustainable relationship with the natural world and each other.
Together, the digital and land commons illustrate a new paradigm of integrated, co-evolutionary processes aligning human activity with the natural world.
This approach addresses the immediate need for biodiversity restoration and sustainable resource management while laying the groundwork for a regenerative future where human and natural systems thrive together.
It offers a transformative path forward, merging the wisdom of living systems with cutting-edge technology to create a harmonious balance between economic activity and ecological health.
Through a collective, transparent, and data-driven process, we can ensure that our efforts to protect and restore biodiversity are effective and enduring, paving the way for resilient and flourishing ecosystems.
Conclusion
We are on the brink of a paradigm shift, where powerful trends are converging to reveal that our ecological crisis is deeply intertwined with our economic processes.
Biodiversity and nature are not just essential for the planet’s health but are fundamental to sustaining all economic activity. Restoring biodiversity ensures that humanity operates within a self-sustaining system, preserving the intricate web of life that supports our economies.
Nature Finance is emerging, capturing the spirit of the times with its systemic perspective and regenerative design principles. This approach harnesses technology to bring regenerative planetary solutions to our current challenges. By understanding and integrating these converging forces, we can create a future where economic and environmental health are mutually reinforcing, paving the way for a truly sustainable and thriving world.
The significant challenge we face is designing regenerative flows based on the principles of living systems. The risk lies in commodifying nature, reducing it to mere economic units, which undermines its interconnected essence. This challenge cannot be managed through a reductionist approach; it requires a holistic, interdependent worldview. We must adopt a cosmovision that respects the complexity and unity of life, guiding our efforts with the principles of regenerative design. This approach helps us avoid the pitfalls of commodification and honors the intricate web of life that supports us all.
This vision paves the way for a future where economic activity and ecological health are harmoniously intertwined, driving us toward a sustainable and thriving planet.
By embracing these principles and leveraging the power of technology, we can navigate our current challenges and forge a path to a regenerative and enduring future.
For further reading, you might find the following resources interesting:
Our Upcoming Challenge is not How, but “Who” can value Biodiversity
The Next Frontier: Transforming Conservation into Regeneration
$8 Trillion (7% of Global GDP) Must Shift to Save Biodiversity
White Paper for Designing Nature Finance
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