Nature, the latest whim of financial markets

This report by Friends of the Earth International argues that the 'financialization of nature'—the process of assigning prices to ecosystems and atmospheric services—creates new markets that benefit financial actors and corporations while failing to protect the environment and harming local communities.

• The report contends that the carbon market, established under the Kyoto protocol and the European Union in 2005, has failed to reduce greenhouse gases (GHGs). It attributes this failure to an over-allocation of quotas, price collapses, and massive frauds, which allowed polluters and bankers to profit while the climate crisis worsened.
• Financial actors are expanding market-based mechanisms to forests and agriculture through initiatives like the UN's 'REDD +' (Reducing Emissions from Deforestation and Forest Degradation). The report cites Ireland's 2012 finance bill and a carbon fund project by le Conseil régional d'Aquitaine in France as examples of this trend.
• The report claims that Monsanto uses the argument of climate change to promote GMOs and 'non-till farming' (conservation agriculture). By using Roundup (glyphosate) and GMO soy to avoid mechanical ploughing, soils store more carbon, which allows the company to obtain carbon credits and increase profits from herbicide and seed sales.
• Biodiversity compensation is criticized as a tool that legitimizes environmental destruction. In France, the Caisse des dépôts et consignations (CDC) has purchased land in the Plains of Crau (bordering the Camargue) to create compensation certificates, allowing companies to fund the restoration of one area to justify damage elsewhere.
• Water markets in Australia (the 'Water Exchange') and Chile are highlighted as examples of the violation of fundamental rights. In Chile, the system led to the concentration of water rights among large companies and reduced access for indigenous populations and small-scale farmers. A similar proposal in Bolivia triggered the 'water war' in Cochabamba in 2000.
• The financialization of nature is described as a threat to democracy and state governance. The report argues that governments, obsessed with 'market ratings,' lose the ability to implement policies for the general interest, while powerful financial lobbies block regulatory measures.
• The report asserts that the intrusion of private banks and 'shadow banking' (hedge funds, private equity) into natural goods markets increases speculation and volatility. This is cited as a primary cause of food price volatility and is used by banks to profit from selling hedging products to energy-dependent companies.
• The document argues that putting a price on nature leads to social injustice and the marginalization of communities. It claims that the creation of new property rights for carbon or biodiversity often results in the expulsion of local populations from their territories.

APA

Friends of the Earth International (n.d.). Nature, the latest whim of financial markets. https://www.foei.org/wp-content/uploads/2020/12/nature_is_not_for_sale.pdf

Chicago

Friends of the Earth International. Nature, the latest whim of financial markets. n.d. https://www.foei.org/wp-content/uploads/2020/12/nature_is_not_for_sale.pdf.

Wikipedia

{{cite report |author=Friends of the Earth International |title=Nature, the latest whim of financial markets |url=https://www.foei.org/wp-content/uploads/2020/12/nature_is_not_for_sale.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{friendsoftheearthinternationalndnature, author = {{Friends of the Earth International}}, title = {{Nature, the latest whim of financial markets}}, institution = {Friends of the Earth International}, url = {https://www.foei.org/wp-content/uploads/2020/12/nature_is_not_for_sale.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }