Solution

Intact natural environments provide so much benefits to humans including corporations and governments
This value needs to be acknowledged and priced. Ecosystem services needs to be assigned the value it deserves
Entities with economic activites (corporations & governments) need to report & compensate their environmental liabilities
Thats the only way we will reach a global equilibirum with planetary resources again.

Two Sides Balancing Each Other

Environmental Liabilities

One one side we have entities with economic activities. Those are mainly companies/corporations and governments. They produce goods and provide services, using resources in the process. Where do those resources come from? Natual environments.

By performing economic activities, companies and governments aren't only using tangible resources (like lumber or ore) but also have an impact on ecosystem services. Examples are: Emitting green house gases, polluting soil, changing water levels, disturbing habitats, and so forth.

The impact economic activities have on environments need to be reported and accounted for. Different framework such as the SEEA CF (=System of Environment-Economic Accounting - Central Framework) provided by the UN, enable exactly that.

Once entities with economic activity reported their environmental liabilities, they are required to equalize their impact. How? By buying licenses from landowners holding that provide ecosystem services.

To ensure there isn't rampant fraud & abuse, companies are required to monitor the licenses they hold. Are the underlying natural assets still intact? Do they need to make riskbased adjustments and purchase a more diverse set? Do they have to take action in case the licenses come from a bad actor?

Licensed Ecosystem Services

Environmental liabilities are balanced out by the dividends natural assets generate: Ecosystem services. Those ecosystem services need to be measured, reported and can then be licensed.

Landowners (public or private) that own land can measure the ecosystem services the land provides. Frameworks exist also for this use as the SEEA EA (=System of Environmental-Economic Accounting – Ecosystem Accounting) developed by the UN.

Once we assessed the units of the different categories of ecosystem services, we can document and issue those licenses. Examples for licensable ecosystem services are carbon stock, carbon sequestration, acquifer sizes, other water storage, air purification aso.

Once a license is issued, the landower need to ensure the ecosystem service stays intact to prevent the license to be void. Monitoring is needed to carefully assess the state of the natural asset: Is it still providing the service? From one year to the next, did the output change?

Selling ecosystem service licenses to entities with economic activities generates income for landowners who then can invest in improving the output of ecosystem services on their land: Planting more vegetation to increase carbon stock & increae species diversity, transform deserts into forests, build up mangroves from barren coastal areas and so forth. The improved ecosystem services can then again be licensed and sold, repeating the cycle.

Bringing It Together

Value Generation

To make the system work, we need more involved parties than just companies & land owners. A governance structure needs to exist to ensure transparency, sustainability & reduce fraud.

Since companies are motivated by profits, they will not account & report their environmental liabilities. Governments need to develop & enforce policies requiring companies to report their environment liabilities. Only then will there be enough demand for licensed ecosystem services.

Apart from creating the demand side of the market, there needs to be an exchange facilitating the transaction of licensed ecosystem services. The more money flows into an asset category, the more resilient it becomes.

To prevent fraud & abuse, there also needs to be a ledger for:

a) information of the licensed ecosystem services: Which piece of land issued them, what is the state, who owns the land, latest measurements to ensure its still intact.

b) Environmental Liabilities: Requiring public companies to report their environmental liabilities and storing them in the same ledger.

c) Transactions: Preserving transactions of licensed ecosystem services from companies with environmental liabilities. This ensures companies balance what they report.

So Much Opportunity

Setting in the place the Intrinsic system creates business opportunities on many levels:

New business opportunities for:
- Measuring ecosystem services (data collection, sensor development, data analysis, compliance, aso.)
- Measuring environmental liabilities (correctly assessing the impact of economic activity, automating reporting, adhering to standards, aso.)
- Running an exchange
- Providing a ledger
- Acting as advisories & consultangs, helping organizations make the transition
- Improving ecosystem services (reforestation, regenerative farming, de-desertification, water regulation, agro forestry, aso.)
Having a strict system in place how ecosystem services are assessed & monitored globally creates security & stability.
Many intact natural environments are located in the global south, companies & countries owning them could generate a significant junk of revenue.
Mindset shift: When establishing an equilibrium based system, over time people get used to the way of thinking.

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