Investing in Natural Capital

1. Investing in Natural Capital: A Brief Case Study of the Kyoto Protocol Investing in Natural Capital Brief case study of the Kyoto Protocol

2. Announcements • Editorial instructions now available in 3 places • “Closing the Loops”: 3:30 meeting at Gund • April 1 is April 1

3. Outline • Types of natural capital • Sustainable use • Problems with overuse • How to invest • Ownership and distribution of benefits • Kyoto

4. Raw materials • Ecosystem Goods, Ecosystem structure • Stock Flow Resources • We can use them as fast as we want • They are transformed through use • What are the two distinct types of raw materials?

5. Problems with Non-renewables • What is sustainable use? • Sink more often limiting than source • Vast majority of waste emissions in US • Distributional impacts: What human communities are most affected? • Any distinction between fossil fuels and minerals/metals?

6. How do we invest in non-renewables? • Efficiency • Recycling • What capitals does this require?

7. Renewables • What is sustainable use? • What is desirable use? • What are the major problems with renewable resource use? • How do we invest in renewables? • Active and passive investment • Efficiency

8. Ecosystem services • Ecosystem function, including life support functions • What is sustainable use? • Fund service resources • They are supplied at a fixed rate and can’t be stockpiled • They are not transformed through use

9. Waste absorption capacity • What is sustainable use? • What is desirable use?

10. What’s a prerequisite for investment?

11. Who Owns Natural Capital? • Ecosystem structure • Farmland, most of Vermont’s forests? • Parks, lake, national forests, etc.? • The atmosphere? • Who should own it? • Ecosystem function • Who owns climate stability? • Who should own it? • Waste absorption capacity • Who owns the waste absorption capacity for CO2? • Who should own it? • What is Kyoto doing to change this?

12. Who are the winners and losers from climate degradation? • What sector is most affected? • Three possibilities: • Losers are future generations who can’t defend themselves • Losers don’t know they are losing (or don’t know the cause) so don’t defend themselves • Losers know, but are powerless, and can’t defend themselves

13. How can we invest in climate stability? • Reduce consumption (fossil fuels, buildings, etc.) • Increase efficiency, cleaner technology • Reforest • Plant trees, Allow forests to regrow naturally • Eat less meat • Stop taking all the sardines! • Just an example of the unexpected ways we are destabilizing the atmosphere

14. What is the Kyoto Protocol? • International agreement to reduce greenhouse gas (GGH) emissions • Carbon dioxide, Methane, Nitrous oxide, Hydrofluorocarbons, Perflurocarbons , Sulfur Hexafluoride • Who has to reduce them? • Less developed nations are currently exempt • How much reduction?

16. How can countries reduce? • Emissions trading • Joint implementation • Clean development mechanism

17. What Happens if Countries don’t Comply? • No penalty for not signing up • Not decided yet if penalties for non-compliance will be legally binding