Conservation opponents have a new boogeyman: Natural Asset Companies

Jan 11, 2024

By Aaron Weiss

Never let the facts get in the way of the monster under your bed

America’s most notorious conservation opponents have launched an all-out assault on an emerging mechanism to restore and protect nature, and in the process, have scared themselves into a brand new conspiracy theory that tries to tie Wall Street investors to the Interior department and America’s public lands. The reality is far more mundane and reveals what the anti-conservation crowd is actually afraid of.

What’s the conspiracy theory?

As with most conspiracy theories, this one starts with a grain of truth: the Securities and Exchange Commission is considering a proposal from the New York Stock Exchange to list a new kind of corporation, the Natural Asset Company. NACs were proposed in 2021 by the Intrinsic Exchange Group as a way for investors to put money behind natural areas, working lands, and ecosystem restoration. NACs would put a value not just on the products or resources extracted from the land, but on the land itself, and the services those ecosystems provide to the entire world — like clean air, water, habitat, and carbon storage. Investors would be able to trade shares in NACs like other stocks and bonds. (We’ll get to the economic theory behind all this in a moment.)

Where Wall Street sees an investment opportunity, conservation opponents have invented a 21st century Red Scare, warning that NACs will lead to America’s public lands being sold to China. The opposition to NACs has been led by one of the most vocal anti-conservation conspiracy groups, American Stewards of Liberty, which has been rallying its followers for weeks to oppose the SEC proposal.

This month, the conspiracy theory broke out of this far-right echo chamber and into mainstream publications. In the Grand Junction Daily Sentinel, a guest writer claimed that the SEC rule would “sell off management of our public lands, including national parks.” A RV enthusiast blog warned that the SEC and BLM were “maneuvering to sell off public lands.”

Now the GOP establishment is buying into the conspiracy theory as well and, in the process, drawing an imaginary connection to a completely unrelated proposal from the Interior department, the Bureau of Land Management’s Conservation and Landscape Health Rule.

This week, 25 Republican attorneys general sent a letter to the SEC not just opposing the listing of NACs, but claiming, without evidence, that NACs are “intended to serve as the funding mechanism” for the new BLM rule. The AGs believe that the SEC’s proposal “is part of an interlocking scheme designed to facilitate another agency’s violation of the law” — a baffling claim considering that the BLM’s rule hasn’t been finalized yet.

The AG letter was followed on Thursday by a fishing expedition from Republicans on the House Natural Resources Committee demanding documents from the SEC about the NAC proposal, saying that it “may prove calamitous to the statutory multiple-use mandates of federal lands,” and allow “foreign interests to fund companies that will control public land.”

All of this is nonsense.

What’s actually happening here?

As the Center for Western Priorities has explained over and over again, the BLM public lands rule would not sell off public lands. Indeed, the agency has no authority to sell or transfer land without congressional approval. The rule would merely clarify how land managers can use the agency’s existing leasing authority to restore degraded lands as part of the BLM’s multiple-use mandate. Multiple law professors have explained how the proposed rule is consistent with federal law.

All public lands leases are limited in time and scope, and restoration leases, as envisioned by the BLM proposal, would have to come with clear goals for measuring the health of the land to ensure future generations will be able to enjoy those lands. For example, a mining company could propose a restoration lease on lands that were degraded by previous mining operations as a way to offset the damages caused by building a new mine on public lands. Or a community group could raise money to restore lands damaged by wildfire or overgrazing, creating new recreation opportunities that would not have been possible given BLM’s limited funding.

The BLM’s proposed rule does not mention Natural Asset Companies, nor is there any indication that the agency was even aware of the SEC’s proposal, which was not published until months after BLM had presented its first draft of the conservation rule.

Would Natural Asset Companies propose restoration leases on public lands? It’s hard to say, since NACs don’t exist yet, and the BLM’s final rule hasn’t been published. It’s possible conservation leases wouldn’t be at all interesting to future NACs.

We can confidently say that there is no way for any company or organization to permanently take over public lands. Whether or not NACs exist, all leases on public lands have an expiration date. (Under the “dumpster fire” that is the General Mining Law of 1872, however, hard rock mining claims generally have supremacy over other uses of the land.) BLM’s multiple use mandate, as defined by Congress in 1976, requires the agency to balance all uses of the land, including conservation, recreation, grazing, mining, and drilling. Land managers have broad discretion to reject leasing proposals that aren’t aligned with the agency’s management plans.

If an NAC proposed a restoration lease one day, they would be treated the same as any other oil and gas company, mining corporation, or nonprofit group. And that’s what scares conservation opponents.

Putting a value on nature

The idea of Natural Asset Companies is based on the work of economists like Dr. Partha Dasgupta, who led a landmark report on biodiversity and economics that was commissioned by British prime minister Boris Johnson and released in 2021. This short video from the New York Times does an excellent job simplifying a complicated concept:

As narrator Alexander Skarsgard says in the video, “When we buy a burger, we’re not paying for the value of the land that got polluted by the cows’ s***. When we buy orange juice, we’re not paying for the value of the pollinators that died from all of those pesticides.”

“We are making a mess of our own lives. So therefore, we ought now to start paying for it,” Dr. Dasgupta explains.

Until now, mainstream economics has only placed value on what we extract from nature. The Dasgupta report and subsequent proposals like Natural Asset Companies provide a way to put an economic value on nature itself, using the tools that already exist in modern accounting. And if your business is based entirely on extracting value from the land, it’s threatening when someone suggests that there could be more economic benefit in leaving the land intact. It’s even more threatening when the New York Stock Exchange proposes letting companies raise capital based on the value of those intact landscapes.

(Conspiracy theories aside, there’s rich irony in the fact that the opponents of the SEC plan profess to be followers of the free market who, until recently, claimed that businesses could be trusted to be the most responsible stewards of American lands. Many of the voices who are now raising the specter of private ownership of national parks were, until this month, the loudest proponents for disposing of national public lands.)

Follow the money

The 25 signers of the state attorneys general letter to the SEC are all members of the Republican Attorneys General Association, a right-wing political group that Politico described as “the weapons division of the GOP.” Three years ago, RAGA’s nonprofit arm even paid for a robocall promoting the “stop the steal” march on January 6.

Perhaps unsurprisingly, RAGA is funded by oil and gas companies, mining companies, and trade associations, including ExxonMobil, ConocoPhillips, the American Petroleum Institute, Alpha Natural Resources, and Devon Energy — all major users of public lands that rely on extracting publicly-owned resources. Those same industries are also major donors to members of the House Natural Resources Committee who are sending document requests to the SEC looking for signs of a connection that does not exist.

The prospect of Wall Street acknowledging that land can have economic value beyond drilled oil or harvested timber could be seen as a fundamental threat to the way RAGA’s donors do business. If oil companies were to account for the damage their product causes to ecosystems and the Earth’s climate, it would undoubtedly do significant damage to their balance sheets.

The BLM’s proposed conservation rule has nothing to do with this theoretical accounting future. It just happens to be moving through the regulatory process at the same time that Wall Street is considering letting some companies voluntarily account for the value of nature. But that alone is enough of a threat to the status quo that conservation opponents are willing to invent new conspiracy theories to try to stop it.


Featured image: Volunteers and BLM staff restore native plants on Public Lands Day in 2018, BLM Alaska