Turning whales into carbon-based resources won’t be easy

The writer is a scientific commentator

Whale poop is like environmental gold dust. It is rich in iron, phosphorus and nitrogen, among the nutrients needed by phytoplankton, the algae at the base of the marine food chain.

Phytoplankton produce more than half of the world’s oxygen and absorb as much carbon dioxide from the atmosphere as four Amazon rainforests. More whales equals more phytoplankton and therefore more carbon removal. According to Connel Fullenkamp, ​​an economics professor at Duke University in North Carolina, this equation makes large whales, or rather their carbon capture and sequestration services, a potentially valuable and tradable resource.

This logic underlies the Whale Carbon Plus Project, a joint effort to calculate the monetary value of large whales and to create an associated financial market that rewards investors with carbon credits. Basically, some of the investors’ money will be channeled into whale conservation and restoration. “Ultimately, we’re trying to bring nature back as something valuable to our economy,” says Fullenkamp, ​​whose research focuses on the development and regulation of financial markets.

It’s a smart idea on paper: the introduction of profit motive can succeed in protecting the world’s natural resources where governments, industry, environmentalists and philanthropists have largely failed.

But setting up whales as a carbon-based resource involves several complicated steps. First, putting a dollar value on a large whale and its services means carefully quantifying the claims for its carbon footprint. Fullenkamp and fellow economist Ralph Chami, who co-founded environmental consultancy Blue Green Future, one of the project partners, estimated the approximate value of a large whale at about $2.5 million – $3 million on one duration of 60 years. That estimate is based on the amount of carbon absorbed by the phytoplankton that it and its descendants help produce, plus the estimated 33 tons of carbon dioxide sequestered in its body (after death, whales sink to the ocean floor and keep the gas trapped in for centuries), in addition to income from related tourism such as whale watching.

Second, the project involves allocating ownership to animals, a complex issue for migratory creatures that swim across multiple countries. And thirdly, any resulting financial product should be independently verified and audited.

Investors, individual or institutional, would then purchase paper money or bonds, with dividends paid as carbon credits rather than cash. Some of the proceeds would be used to restore the total number of great whales (which includes 13 species, including the blue whale) from their current population of over one million to the estimated 4-5 million that swam the oceans before industrialized whaling.

It’s worth it, Fullenkamp insists: if governments, economists and environmentalists can “put our heads together, there’s this new pie, this new asset class that didn’t exist before” that could bring revenue.

While it’s crucial to certify that the money actually goes to saving animals, there is a growing demand for ethical investments, with sustainability bonds and green bonds gaining popularity.

It is also belatedly recognized that traditional economic models neglect the value of natural resources. A 2021 revision by Sir Partha Dasgupta, of the University of Cambridge, described nature as a blind spot in economic thinking: the destruction of woodland to produce a shopping center records the increase in the capital produced, measured in terms of gross domestic product, but does not the loss of carbon uptake nor the increase in soil erosion.

We have collectively allowed the natural assets on which we all depend to be depreciated off the books. Biodiversity is declining faster now than at any other time in history: one million plant and animal species are thought to be threatened with extinction.

The monetization of whales will take years to correct, although seagrass and mangroves, also major carbon sinks, could become an asset within two years.

“Some people have called it a Ponzi scheme and whale and fairy whisper nonsense,” Fullenkamp admits. “And if I tried to sell you this stuff today, I’d screw you over. What we’re trying to do is build it very carefully because, frankly, I don’t want to go to jail for fraud.”

Unlike cryptocurrencies, for example, there is something real, natural capital, that underpins these assets. In any case, putting a dollar value on nature’s carbon sinks and other treasures can’t be worse than not valuing them at all.