Reconnecting Markets with Nature: An Earth Day Talk with Renowned Financial Economist Ralph Chami (part 1 of 2)

What if we could see the invisible? The magnificent blue whale, stretching 110 feet long through ocean depths, remains completely invisible to our economic systems—until it's killed. In this profound Earth Day conversation with Ralph Chami, we discover how reconnecting our market systems with living nature might be our most powerful tool for planetary healing. L

Chami draws from his 32 years as a financial economist, including 25 at the International Monetary Fund, to explain the fundamental disconnect between our nature system and market system. While markets expertly value dead nature—oil, timber, harvested fish—they remain blind to living nature's immense worth. This blindness stems from catastrophic assumptions made during the Age of Reason: that nature is infinite, mechanical, and soulless.

Through groundbreaking research on whales, forest elephants, and seagrass meadows, Chami demonstrates how living ecosystems provide astonishing financial value. When tiger sharks wearing cameras mapped the Bahamas seagrass—revealing meadows worth potentially $150 billion—it transformed how this small island nation viewed its natural assets. Rather than destroying nature for short-term gain, vulnerable communities worldwide are discovering sustainable prosperity through conservation.

Climate change requires both reducing emissions ("shutting the valve") and removing existing atmospheric carbon ("draining the tub"). Nature restoration offers our most powerful carbon capture technology, creating economic opportunities that align financial and ecological interests. From Native American bison restoration to Polynesian whale protection initiatives, Chami shares inspiring projects creating virtuous cycles of environmental and community well

Planet Centric Media (non-profit)
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Mendonoma Whale & Seal Study
Founded by Scott & Tree Mercer to document the occurrence, diversity, & behavior of marine mammals.

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Chapters

• 0:00 Introduction to Ralph Chami
• 4:32 Nature System vs. Market System
• 9:56 The Value of Nature Living for Itself
• 17:54 Seagrass: The Trillion Dollar Ecosystem
• 28:00 The Carbon Tub: Why Emissions Aren't Everything
• 37:04 Creating Nature Markets and Indigenous Partnerships
• 53:38 Closing and About Ralph Chami

Transcript

Leigh Anne Lindsey: 0:00

Music, music, music Music. Welcome to Resilient Earth Radio, where we host speakers from the United States and around the world to talk about critical issues facing our planet and the positive actions people are taking. We also let our listeners learn how they can get involved and make a difference. The music for the show is Castle by the Sea from international composer Eric Allaman of the Sea Ranch in Sonoma County, california.

Leigh Anne Lindsey: 0:52

In this episode, we speak with Ralph Chami, who was our inspiration for starting this podcast. Ralph is a financial economist with over 32 years of experience, 25 at the IMF, the International Monetary Fund of the United States. He is co-founder, ceo of Blue Green Future and spoke with us this Earth Day about the importance of connecting people with nature and forging a new contract for sustainable prosperity and well-being. He explains the disconnect between the nature system and the market system, emphasizing the need to make living nature visible and valuable to markets. In addition to the IMF, he has served as a consultant for the World Bank and has been featured on TED 2022, tedx, florence, npr, cnn, the New York Times, national Geographic, financial Times, the Economist, the Washington Post, world Economic Forum and in peer-reviewed journals. He is the recipient of the IMF 2104 Operational Excellence Award, 2020 Hermes Platinum Award and 2024 Mad Blue Five Oceans Award.

Leigh Anne Lindsey: 2:14

This is part one. I'm Leigh Anne Lindsey host, along with my co-host and co-producers, Scott and Tree Mercer of Mendenoma Whale and Seal Study. It is April 22nd, 2025, Earth Day 55 years of Earth Day and on this special day, we have a very special guest, and that is Ralph Chami. And Ralph, welcome back. We enjoyed having you on our 2021 Ocean Life Symposium. It's good to see you again.

Ralph Chami: 2:46

It's wonderful to see you again and thank you so much for inviting me back. It's been three years, hasn't it? Yeah, doesn't seem like it. Co- Hosts Scott and Tree Mercer both say Happy Earth Day.

Leigh Anne Lindsey: 2:55

Happy Earth Day.

Ralph Chami: 2:57

Thank you, same to you.

Ralph Chami: 3:00

Host Leigh Anne - Well, we're really looking forward to hearing an update from you about what has transpired over these last few years. ways to describe

Ralph Chami: 3:06

Ralph Chami - THere are a few ways what they're doing all with the aim of connecting with people, all with the aim of bringing an understanding about this wondrous place that we've been gifted with and therefore, forge a new contract, if you like. Forge a new contract, if you like. That is meant to bring sustainable, not only prosperity but good health, good well-being to everyone. Now, with that in mind because that's really the guiding principle throughout everything we try to do and I try to do with my colleagues let me describe to you, maybe in a different way, where we are and what needs to be done and what we're trying to do in this vein.

Ralph Chami: 4:12

You have two systems. You have the nature system and people that have been occupied with protecting and restoring nature for many, many, many years, and then you have a very powerful system that we created for ourselves, called the market system Some people like to think of it as a capital system or whatever and those two systems, unfortunately, have been ambivalent towards each other, at best indifferent. People that have been so occupied and sacrificed so much to protect and restore nature have really paid much attention to the market system. They're indifferent towards it. In fact, in some cases, they had really negative and rightly so towards the market system and the market system never really paid much attention to the living nature. The market system has a very good relationship with dead nature, extracted nature, oil, gas, fish that you take out of the ocean, suffocate and eat. You know, extractive view of nature. So this indifference has been to the detriment of both, because, by conservation or the nature system being ambivalent towards the market system, not trying to engage the market system, the market system knew only one way of dealing with nature purely from an extractive point of view, which led to the detriment of nature itself. That's why we've been losing every battle, that's why nature is under attack and stressed, that's why we're losing the stock and the flow and the biodiversity of nature.

Ralph Chami: 5:53

But when you do that, then nature boomerangs back to the markets, to everyone else, through what's called, if you like, climate change. Why does climate change? After all, to my mind, it's nature stressed. When you talk about forest fires in California or the floods or this, it's nature, nature saying hey, hey, you can't, you can't keep treating me this way. And so it comes back through climate. You know climate risk, nature risk hitting and affecting the bottom line of the market system.

Ralph Chami: 6:30

So this relationship of ambivalence or indifference or animosity to where one cannot sustain. We cannot keep going down that because we, nature is our home. Nature is our only home. Carl Sagan used to say this planet the only home we've ever known. Well, I would at maybe, with his permission, the only home we will ever know for the foreseeable future, and it's a beautiful home. It's a beautiful home.

Ralph Chami: 6:59

You just have to ask people that live in balance with nature. They'll tell you how beautiful it is. We actually, when we relax a bit, we realize what a beautiful place this is and how lucky we are. Nature is. This planet is a gift, and when somebody gives you a gift, you're supposed to grow the gift, not destroy the gift. That's how you show your gratitude and you're supposed to share it. That's what brings you happiness.

Ralph Chami: 7:24

So the question is you have two systems that are at odds with each other. Can we find a way to help nature understand how markets work? At the same time, can we engage market to understand how valuable is the living nature? Okay, now, the market system knows a lot about nature, knows the value of gas, oil, timber, dead fish, dead anything, and price of corn, wheat, apples, oranges, food, what we refer to as the provisioning side of nature, nature that provides food, or nature, if you like, as a resource. What the markets never really understood is what is the value of nature living for herself? Let me repeat what is the value of nature living for herself? What do we mean by that?

Ralph Chami: 8:19

When I first met, you guys and I was talking about the value of the living whale in terms of carbon sequestration. Really, if you think about it, what were we talking about? It's about the whale frolicking freely in the ocean. It's not a whale in an aquarium, it's a whale not even aware of our own existence, going about her business. As you know, nature god, whatever you believe in deemed it to be. By living her life for herself, she was adding value to our life Intrinsically the beauty of it all, beauty of life itself but also financially. That's what I was trying to show that there's also a financial angle to nature living for herself. When we did the work on the elephants, it was the same thing. It's the elephant frolicking freely in the forest by not being even aware of the human existence right by living, caring for her babies. By this she was adding value to the forest in terms of. At the time, we were looking at the carbon side and we calculated that that elephant living for herself added also financial value to the market system.

Ralph Chami: 9:36

I remember you saying services that they provide right, and one of them is carbon. But they do a lot more. I mean, you think of the elephants. They refer to them as forest engineers, because those forest elephants, that's what the scientists I learned that from the scientists that's the work of Fabio Berzaghi and others, basically showing you that these forest elephants, they like to eat plants that are low in fiber, high in protein, and what they leave alone are the plants that are high in fiber, high in protein, and what they leave alone are the plants that are high in fiber, which means high in carbon. And through the way they walk in the forest, they traipse on small shoots, creating more space for older growth, more sun, more rain, more nutrients and therefore enhancing the carbon sequestration in the forest by 14%. Enhancing the carbon sequestration in the forest by 14%, depending on concentration per square kilometer. That's science. That's their paper in Precinct National Academy of Sciences. That's their paper in Nature Journal. That's purely science, okay, and also, these elephants eat certain fruits that no one else can eat because the seed is so big. They're the only ones who can actually swallow it and defecate it and therefore fertilize the forest. They also do other things they manage the forest. By managing the forest. They reduce the probability of fires in the forest.

Ralph Chami: 10:58

Imagine so. It's not about carbon, it's about life longing for itself. It's by nature longing for itself. It's by nature longing for itself. It's not only intrinsically priceless, but because we live in a market system, we need to make the case. We need to take that and showcase the market system, that nature living for herself, if you like some people like to refer to it as the regulating side of nature is also financially valuable.

Ralph Chami: 11:28

Now why is that important? Because nature is invisible Right now. Nature is invisible to the markets. As big as the whale is 110 foot. If your blue whale can grow to 110 foot, still is invisible to the markets. The markets are going there's a whale, there's a whale, and the guy says but there's no value in killing the whale, there's no penalty. So the whale in a whale as big as she is, is invisible to the market. You see, now kill the whale, chop it to pieces. Suddenly it becomes visible. Why? Because you can sell oil. Suddenly it becomes visible. Why? Because you can sell oil, blubber or meat, whereas the whale, the living whale, just frolicking freely in the ocean, as she's done for millions of years, is not visible to the market and that's why we've been destroying the living nature with impunity.

Ralph Chami: 12:26

Now we can drill back and say why is that? Is it the fault of the markets themselves or the certain assumptions that we made way back when? And I would say it's not really the fault of the markets, it's the assumptions that were made in the age of reason. If you go back to the Cartesian paradigm, if you go back to Francis Bacon Novum Organum, his book, right there he says we were endowed with nature, with infinite commodities. What does that mean? That means nature is infinite.

Ralph Chami: 12:56

And the first thing you learn in economics 001, freshman class if something is infinitely supplied, its price would have to be zero. So by making these certain assumptions that are based on nothing, perhaps when there was only even atom, nature was infinite. But there's 8 billion of us Nature is finite. Perhaps then you could say who cares? Right, but now nature is finite and, as a result, that assumption of price of nature is zero. That means way back when, when we made that disastrous assumption. If you don't worry about nature because she's infinite, that means you can cut, pollute, destroy with impunity. She's infinite by definition. That means all you have to worry is about yourself. And that's where the emphasis on growth came from we started with. Obsession with growth is because why should you obsess about anything else? After all, you're using nature to grow, but nature is infinite, so you shouldn't worry about her, you should only worry about yourself. So this obsession of people telling me oh, it's obsession with growth and GDP, I said yes because of these assumptions that were made.

Leigh Anne Lindsey: 14:12

Descartes, right.

Ralph Chami: 14:15

Descartes gave supremacy to the mind over the body, right, I think. Therefore, I exist. Remember that Descartes? Yeah, yes, the Cartesian paradigm, and what he did with this idea? He would say he would reckon nature to a clock, mechanical clock. He said if you know the parts, you know the whole. But what he did? He ripped the soul out of nature. Nature has a soul, nature is a living system, nature has a breath, just like you and me, right? What he did with his aim to basically give prominence and eminence to the scientific method, right, he inadvertently pulled that idea that nature is alive and anything that's alive takes in breath and gives up something in return. What he did, and then, with Francis Bacon saying nature is infinite, those two things really set everything that was built on the wrong track.

Ralph Chami: 15:17

Now, the people that did not receive that message continued on their track, and these are the indigenous people and the communities. Because they didn't hear of that, they stayed. And what was their life? It was our life before we heard that message too, which is you live in balance with nature. I mean, I just celebrated Easter on Sunday. Happy Easter, happy Passover to all of our colleagues here.

Ralph Chami: 15:42

But if you think of the prayer itself. What does it say? It says give us our daily bread, right, give us. It doesn't say give me tomorrow's bread. It doesn't say give me a whole month's bread. You're supposed to only take what you need. And when you interact with indigenous people, as I have done and I will tell you about our projects, are really fascinating that they don't touch nature like we do or don't touch this, is this is a protector? No, no, they live in nature, but they only take what they need. They understand that life is you take and you give, or you give and you take.

Ralph Chami: 16:23

First movement in Tai Chi is we give and we receive. You have to give to receive. Think of your own personal relationship, your own personal relationship. You cannot be in a relationship where you're only giving. At some point you get tired, and if you only take and you don't give, the other person gets tired. So this permeates everything. We need to rebalance this relationship because we're out of balance with each other. We're out of balance with nature. We're out of balance with nature when the Polynesian people, march 27 of last year, recognized the legal personhood of the whale, or conferred legal personhood on the whale, and it took place, the event in the Cook Islands.

Ralph Chami: 17:12

The only two non-Polynesian people who were allowed into the sacred ceremony was Carlos Duarte and myself. We were also witnesses and we signed the, with everyone else, the declaration. But at the time the Maori king he passed away a few months later was there and the morning after early we were woken up. Says the Maori king would like to have breakfast with you guys, and temperature must have been like in the 90s. We're staying at a place, no air conditioning. It was fine, and I was thinking I cannot put on a suit. I mean. So I said, do I put a suit on? And they said are you kidding me? No, no, just T-shirt and shorts, just get there, because the breakfast was at 6.45 and they woke us up at 6. So we hustled, we got in the car, we got over there.

Ralph Chami: 18:01

He was there with his wife and his advisors and Carlos is trying to explain to the Maori king our work on natural capital, blue natural capital. And starts to explain blue natural capital. And the late King raises his hand, says Professor Duarte, professor Duarte, this is not language that I understand. Let me explain to you where I come from. Where I come from is the whale is my ancestor. So there's no distance between me and the whale and our whales. When they're dying, they beach themselves and we take their bones and we put them next to their famous tree. I forgot the name of the famous tree. Now that tree has the DNA of the whale in it. Wow, so when our tree is not doing well, we know that the whales are not doing well.

Ralph Chami: 18:59

Oh, wow, yeah, as you can see, professor Duarte, there is no blue, there is no green, there is no separation. So it's one continuum of which we are part of. We are part of it Absolutely, and when our cycle is up, we just return back into nature. Yeah, I tell you, I looked at Carlos and I think he had tears in his eyes. We didn't know what to say after that. We just kept thinking what are you going to say? He basically said we don't separate. This is blue and this is green, and this is a whale and this is a tree. It's one breath, and that is so true. It is so true. But he put it much more eloquently than I just did.

Ralph Chami: 19:53

But it was yeah, when they're not doing well, when the gray whales are not doing well, we cannot be doing well.

Leigh Anne Lindsey: 19:59

That's right. We did an episode not too long ago where we recapped that whole event, with you being there, and I just want to say, too, that, ralph, your words, when we first heard you back in 2021 at the Ocean Life Symposium, really did strike us and sit with us, and it led to this podcast, to us creating this, because we just had not quite heard that perspective before, which makes so much sense to us. It may not have to the Maori king, but it does to us, so we just want to thank you.

Ralph Chami: 20:38

Yeah, the Maori king did not lose his way.

Leigh Anne Lindsey: 20:41

No, he didn't he never did, did he?

Ralph Chami: 20:45

They stayed the course. We veered, we veered, except for the indigenous. Exactly Now, because we live in a market system, I have to take all of these ideas and convert them into, just translate them into a language. That same idea, but use a different language to make nature visible, the living nature visible.

Leigh Anne Lindsey: 21:10

And I like the way that you talk about language too, and who better to discuss this than someone who's been a financial economist for over 35 years and you can see and be able to interpret in this language, whereas the indigenous they always had that language.

Ralph Chami: 21:29

Exactly so I don't when I talk to the Maori people I work with or I work with Native Americans here, I don't. When I talk to the Maori people that I work with or I work with Native Americans here, I don't talk about these things with them because what am I going to say? They're already living that life. It's us that got that message of nature is infinite and nature has no soul. We're the ones who veered, we're the ones who went on a different trajectory and divorced ourselves from nature. And if you look at economics itself, that's how we modeled our economy. The idea is that nature has limitations, if you like, and technology would obviate the need to nature altogether, and so we can grow unboundedly in a bounded planet. After all, the planet has a size, you see, and so, to my knowledge, earth is not expanding. Earth is limited. So what happened is we've been living, if you like, beyond our means. Some people have made estimates of this. We're expending three earths right now. Three earths Meaning we're using resources that you can argue are ours as we're a generation, but we're really spending resources of two more earths, which means we're borrowing from the future. We're borrowing from the unborn, we're borrowing from our grandchildren, from our children, from the unborn, from yet to be born, without their permission. And yet we say we love our children, yet we say we love our grandchildren. Well, you know, as my mom would say, proof of the pudding is in the eating. We need to show that love, we need to share that love, we need to live within our means to ensure that our children, our grandchildren and all future generations get to enjoy what we've enjoyed ourselves, which is this beautiful, beautiful planet, you see. So all of this, this is really the philosophy behind our work. Now, because I'm a financial economist and I come from the markets and from the policy side, I have to take these ideas, because if I don't engage those guys, then we are really proselytizing to each other and then we give high fives and then, at the end of the day, we've done nothing really, because when you look at how much we need in order to protect nature, the living nature, the dead nature doesn't need protection, it's the living one and that's providing all of this. You know, fighting climate change, regulating water, soil quality, all of that stuff it needs. According to the, it needs a trillion dollars a year, charitable giving, philanthropic giving, and, if you want to say. The little that governments contribute is woefully short, and the financing gap is about six, seven hundred billion dollars per year. Now where is that going to come from? You can proselytize some more, but people have voted with their pockets already, you see.

Ralph Chami: 24:34

So what's left is there's one segment of the society that has never been included in this conversation the markets. The markets are sitting on trillions of dollars, and the markets behind it are people too, and they are like you and me. They're brothers and sisters and they too have families and they too want to live in a beautiful earth. It's brothers and sisters, and they do have families and they do want to live in a beautiful earth. It's just that they don't know. What we know, you see, is how beautiful the living nature and how important it is to society and to our economy. So that's why all of my work with my colleagues have been how do we engage those guys with the resources, with the ability to move fast, to bring that funding into the protection and restoration of nature? Because we all live under the same sky and when the sky falls, it's not going to say you're a market person and you're a conservation person. All of us See my mom everything I know is from my mother, and which is also my brothers and I would fight. She'd say why do you guys fight? At the end of the day, you're going to come back home and you're under the same roof, you're going to sit at the same table and have the same dinner, so why do you fight? He was right. So all these lessons are really the philosophy behind this work. Now I'll take you through the rabbit hole, but please don't lose sight of why we're doing what we're doing. We're trying to make nature, the living nature, visible to the markets, thereby changing the mindset of the markets, because actions follow changes in mindset. You cannot have actions, new actions, if the mindset hasn't shifted. Remember when everybody used to smoke in their cars and in their bedrooms and just watch old movies? Nobody does that. It was a mindset shift followed by action. So the only difference here is that we have little time. So there's an urgency. There's an urgency behind this.

Ralph Chami: 26:34

So when we did the work on the whales, it was to say, hey, nature, the living nature, provides a service, a regulating side, not the provisioning side. So it's not meat, it's not, you know, potatoes, it's regulating, helping the climate. When you have healthy whales. You have healthy actually, you have healthy krill and everything feeds in the water, as you know very well on krill, it's not only the whales, right. When you have a healthy, when the whales are feeding, there's a whole biome feeding around the whales, right? I observed it myself and I'm sure all of you have seen it. When the elephants are doing well, the gorillas can, as seen it, when the elephants are doing well, the gorillas can, as I learned from the famous Ian Redman, gorillas make their homes in the canopy. They need the forest elephants to help them. Everything depends on everything you see. So the elephants are doing much more than that.

Ralph Chami: 27:24

So we started with the trying to say, hey, a living whale, just from carbon sequestration, was far, far more valuable than a dead whale. And then the same thing message was with the elephants. Then UNAP came along and said hey, you seem to know how to value a living nature. I said no, no, I'm not valuing a living, I'm valuing some of the services that we can measure. It's a minimum, it's not an upper bound, it's a lower bound. Just to basically highlight to the markets, not to the converts, to the markets you have a stake in protecting and restoring nature.

Ralph Chami: 28:04

So they said okay, and you value seagrass? And to that one I said I have no idea and I know nothing about seagrass. They said oh well, you got to go talk to that famous guy. His name is Carlos Duarte, by the way. On April 16, he was awarded the highest award in that field by the Emperor of Japan, which is equivalent to the Nobel Prize, if you like, in marine ecology. A few days ago he was recognized for all of his work, carlos Duarte, anyway.

Ralph Chami: 28:35

So I went to Carlos and I said can you teach us about your seagrass? And look what he said. He said oh, I've written many papers on seagrass, so let me give you a very quick example. He said if you plant three trees next to each other, after 30 years there'll be one tree left because they're competing for nutrients and light and rain and all that stuff. When you plant seagrass, after 30 years there's a billion of them. They're clonal. If you plant them, they're like a tree on its side. They grow this way and this way. Okay, and they grow at an exponential rate.

Ralph Chami: 29:11

So you're saying horizontally and down and down, because they sequester carbon down and they grow in this way. So you have the biomass in the soil, the sediments. Seagrass grows as long as you have space, it grows. That's the work of Carlos and others, well-established. And so they grow exponentially for 50 years, then at a constant rate forever. As long as you have space, they keep growing, which is incredible. And when they're growing they're sequestering carbon. In fact, all living systems right Seagrass, mangroves, salt marshes, trees we sequester carbon also because this is what makes our tissues so. With Carlos, it was shocking because I had no idea that they grow at an exponential rate and they are sequestering carbon. Now, I've never seen a technology that grows exponentially for 50 years and at the constant rate forever. And I said okay, if we understand your science, we can take that and mathematically calculate what is the value of seagrass living for itself? Again, this is a new language I use just to highlight that we're not talking about seagrass in an aquarium or seagrass in a lab. This is seagrass just existing. It's over a trillion dollars in just carbon sequestration Over a trillion, over a trillion, and I'll explain to you in much more detail. This is work with codloss.

Ralph Chami: 30:51

But when you have healthy seagrass, you have healthy fish stock. Why? Because fish love to hide in there and lay their eggs, and the Australians had already known that. Because if you go to their website, great Barrier Reef, they have the data. Just take a look at the data. You see.

Ralph Chami: 31:08

When you have healthy seagrass, you have healthy fish stock, so you can calculate the delta in the fish and you know the price of fish. You multiply that you have healthy seagrass. You have healthy fish stock, so you can calculate the delta in the fish and you know the price of fish. You multiply that, you get the value from enhanced fisheries and when you have healthy seagrass, it staves off flooding. How valuable is that? Well, we know exactly how to do that, because if you didn't have seagrass, you'd have to build seawalls, and you know the cost of that. And didn't have seagrass, you'd have to build seawalls, and you know the cost of that. And when you have healthy seagrass, it has a knock-on effect on corals because it purifies the water. So suddenly, seagrass is not about carbon.

Ralph Chami: 31:44

Seagrass is all these services, ecosystem services right that are provided just from seagrass, existing for itself. Of course. Now you look back at some of the resorts I used to frequent where people would complain to the management that their feet touch the seagrass. And you see those guys in the morning chopping away at seagrass. Seagrass is gold.

Ralph Chami: 32:11

Mangroves are another system, but mangroves are trees and they don't grow laterally, they grow vertically and so they're physiologically different than sea grass. They also sequester a huge amount of carbon in the soil and in the biomass, but their biomass up to a point, about 10 years, and that's it. Then, whatever they grab, they release. So you need to know the physiology. But once you know the physiology of whatever you're interested in, you can start to calculate the value from carbon sequestration, if you like, only to highlight the value of the living system for itself. So we went from we started with valuation of services, just the carbon for Wales and back of the envelope, just to bring this utilization to humans, to us, especially in the markets, especially to my guild, the what's in it for me crowd Right.

Ralph Chami: 33:14

They had no idea and I remember the shock that everybody, when I was doing this work, some people thought I went nuts. I'll say why are you doing this work? Like no, no, it's not why. The question is is this the only work I want to do? Why did I waste my time doing anything else? Because this is our life, this is our home.

Ralph Chami: 33:33

This is what all my training was, I guess was all about is to apply all these techniques to understand the value of the living nature to our health, wealth and prosperity. So we went through whales, elephants, to seagrass, to salt marshes, mangroves, forests. Of course we all know about forests and planting, but it's not really about planting trees, it's about the life in the forest, it's about the interaction of fauna and flora. I mean, when we talk about the elephants, the elephants are interacting with the trees, with the soil. That richness of life turns out to be not only intrinsically valuable but financially valuable to our system. Now, once the science tells you nature is valuable and you can calculate some aspects of that value in dollar amount, what can you do with it? Because some people get frustrated when you tell them well, you know, just, carbon is 2 million, 1 million, whatever the number is, or an elephant. They say what do I do with this? So that's the next question that we had to face, right Is what can you do with that? And the idea can we build markets around the protection and restoration of nature? And this is where we are right now.

Ralph Chami: 34:52

We have projects all over the world. We have projects on seagrass, for example. There's a huge project in the Bahamas. So let me just give you an idea how these things can be translated Bahamas and this is the work of Carlos Duarte and a group called Beneath the Waves, and they published that work in nature.

Ralph Chami: 35:14

What they did? It was an ingenious way. So Bahamas is a small island and they wanted to know how much seagrass they had. But it's very expensive to you know, to do the mapping. But these guys were ingenious. They came up with this idea. They said, yeah, if we use submersibles or humans or technology, it's going to cost money. But you know, guess what? What feeds on seagrass? Sea turtles. And what feeds on sea turtles? Tiger sharks. So they came up with this ingenious idea they outfitted tiger sharks with 365 cameras. Now, what year was this? 2021.

Ralph Chami: 35:55

The paper came up in 2021 in Nature Journal. It's called Using Tiger Sharks to Map the Largest Seafloor Meadow in the World and I visited that boat where they brought the sharks. And it's not a trivial exercise and it's quite dangerous, right, you bring them on board and then you outfit them with the camera and you let them loose. Now the nice thing about it is the tiger sharks swim about 80 kilometers a day and they don't need to come up for breath and they don't take breaks and they don't charge you for their services. So they map the seafloor of the Bahamas in no time and guess what they found? They found that the Bahamas is sitting on 93,000 square kilometers of seagrass. 93,000 square kilometers of seagrass Now let me give you something to compare it to. All of Spain is 1,600 square kilometers of seagrass. That's to give you an idea of what we're talking about.

Leigh Anne Lindsey: 36:56

That's a big difference.

Ralph Chami: 36:58

Yeah Right. So I was brought down to Bahamas to meet the prime minister. At the time it was about three years ago. In the room there were the scientists and the officials and the prime minister says, basically, why are you here? I mean, why am I talking to you? And I said well, you're 93,000 square kilometers. You used to have about 140,000 000. You've lost quite a bit due to human activity, but that delta is worth about 150 billion dollars. Just the delta, just the delta.

Ralph Chami: 37:37

Now imagine saying that to a, an island that has been decimated by the hurricane, and putting them in debt, huge debt to GDP, where they're one foot away from oblivion, and you're coming and saying, potentially you could be, per capita, the richest country on the face of the planet, because there are only, I think, 350,000 of them. So you divide 150, that's in revenue and that's just carbon. We're not talking about fish. We're not talking about fish. We're not talking about anything else. So I was asked is this magic? I said no, sir, this is magical, but it's not magic, it's pure finance. One plus one is still two. I was asked why. Now I said well, let's think about it.

Ralph Chami: 38:28

The Gulf countries sat on a black goo for a thousand years until somebody, let's say Mr Ford, needed to move their car from point A to point B and they needed that black goo. That's called demand. And they were sitting on the supply of the black goo and they said to Mr Ford, you can have the black goo, but at $100 a barrel and what you get is an oil market. So the world needs nature to fight climate change. That's the demand. Your island is sitting on the supply side. By protecting and restoring your seagrass, we can strike a deal with the demand side if we can agree on a price.

Ralph Chami: 39:16

So what does that mean? The world or the companies that want to go carbon neutral, carbon negative, carbon zero, net zero, can pay you to protect and restore the seagrass meadow and the carbon that accrues from that would actually help them match what they need. And thus you create an economy around it, exactly, but economy around what? Around the protection and restoration of nature, around enhancing resilience in nature. Because when you enhance resilience in nature, you stabilize people on their land. Because what people fail to understand is when nature is stressed and you have forest fires and you have droughts and floods, people are on the move Within their boundaries, outside their countries, into the regions. They can take boats and try to find refuge anywhere they can. So creating resilience in nature stabilizes people on their land, you see. And at the same time, when you invest in nature, your health is going to be better. So it has many other effects, you know positive spillover effects.

Ralph Chami: 40:26

So this is really the concept behind it is there's demand for nature. And here allow me just to explain one thing that I find a lot of people I even wrote a paper about it with my colleagues just to help people understand when they met the Kyoto Protocols and then the Paris Agreement of 2015 to fight climate change and they said we need to reduce emissions. It wasn't only reducing emissions, we need to reduce the stock of carbon that is sitting up in the atmosphere. So for hundreds of years we've been destroying nature and pushing that carbon that used to be in the ground to become carbon dioxide, bellowing up into the atmosphere. That carbon dioxide doesn't go anywhere, it's just sitting there. So think of a tub, think of a tub. Sky is a tub and carbon dioxide is just accumulating there from emissions, destruction of nature, pulling oil and gas out of the ground, burning the oil right, and that carbon dioxide, the smoke stacks. That carbon has been there for hundreds of years. That's the tub. It's full, but there's a faucet and that faucet is still dripping more carbon dioxide into that tub. That is your emissions. Which means what If you were to shut off all emissions? Today, miraculously, somebody orders the world to stop carbon dioxide emissions. We're not done. Why? Because the tub is full and the tub needs to be drained. And the only way to drain the tub is to bring back the nature that we have lost, because mother nature has been around for 4 billion years. She knows how to do this if you give her a chance.

Ralph Chami: 42:21

Now, of course, boys with toys, the alpha males among us, they like to play with toys. They think it's all about technology, that's fine. So they want to build machines that will grab carbon. But first of all, those machines are tiny. They're not going to make any difference, and grabbing carbon is not the issue, it's sequestering carbon permanently, because when nature grabs that carbon, puts it in the soil. It doesn't go anywhere, unless humans, or in the ocean, unless humans tinker with it. You see, so we need nature, right? Because I see people talk about we need to reduce emissions and I keep saying it's not enough. We need two levers, we need to shut off the valve and we need to drain the tub. We need to shut off the valve and we need to drain the tub.

Ralph Chami: 43:07

Draining the tub is about what all my work and my colleagues' work is about is the protection and restoration of Mother Nature, blue and green fauna and flora, along, of course, with reducing our emissions through alternative technologies, solar and all that. That's all good, that's all good, but it's not enough. And this is science. This is not Ralph's opinion. This is what scientists have been saying.

Ralph Chami: 43:35

But unfortunately, when you hear it on the news and you hear, people get confused. They think, oh, I'm riding my bicycle today and I'm saying, dude, that ain't enough. How are you going to pull that carbon out of the atmosphere? So the forest fires in California and the heating up and all this, it's not from the emission, it's from the 450 parts per million that are sitting up there going nowhere. Nowhere. They're heating up the earth and it's not because there's carbon up there. There's always been carbon up. There's a cycle, there's a carbon cycle. It goes up and comes back in. We disturb that cycle and we push more carbon. That should be, that is conducive for human life that used to be in the ocean or on the ground, in the forests, right in the soil, in the biomass. We pushed it up into the atmosphere. So this whole thing is about rebalancing our relationship with our home nature and with each other. It's like the return of the prodigal child, if you like. And while we still have time, so imagine for Bahamas. Bahamas is a Caribbean country.

Ralph Chami: 44:49

Many of these are island economies struggled with that. Their economies depend on two things tourism and being an offshore center. Well, as they discovered from COVID, tourism is a fickle friend. When there's a recession, when there's a COVID God forbid another one tourists disappear. So there are no dollars. So now you fall back on. Are you an offshore center? Well, that is changing dramatically due to stricter laws and regulations and on international taxation, all that stuff.

Ralph Chami: 45:24

So all these economies, vulnerable economies, are looking for a new source of income, new source of revenue, and the only thing that is peddled to them is sell your soul, destroy your nature, allow extraction, destroy your forests, dig for more oil and gas, dig for minerals, because that's the only model we know you see more oil and gas. Dig for minerals because that's the only model we know, you see. So for them it's a trade-off Quality of life versus dollars. I can pay back a debt that I will never be able to pay back, never. None of them have been able to come out of their debt. So what we come along and say, hey, hey, hey, you may not need to do this. This because by protecting and restoring your nature, you will make more money in perpetuity. You create resilience in your nature, better health, better environment, you stabilize people on their land, you alleviate poverty, ensure food security.

Ralph Chami: 46:21

That's the proposition with the Bahamas, with all of these island economies. They can look at what they have, what they used to have, and how to restore it and make use of the need that on the demand side of the equation, there are all these companies that have made commitments to be better citizens of this world. Now you may say, well, there are politics involved. There's a yes, yes, of course, but in Europe there's something called nature restoration law. It was passed on February 27 of last year, ratified by all countries in the EU sphere. In the UK, there's something called net nature gain. So the regulators are now coming and saying, hey, hey, it's not about carbon, it's what about is your net impact on nature?

Leigh Anne Lindsey: 47:08

I was just going to say, if we could only get the United States to also follow in these footsteps.

Ralph Chami: 47:14

Well, I'll tell you what you know. I used to complain to my mom. You know he's not doing this, he's not doing that. She used to say do your job. Do your job at your level, the rest is not yours to worry about. Companies are feeling the brunt of it. Let's just simplify it. Insurance companies are walking out of California, as you know. Texas, florida, alabama, mississippi I mean, I have friends in California. They can't sell their home anymore. You're paying a mortgage on an asset that has a negative value. If you're the bank that holds that mortgage, you have a stranded asset. If you have a car dealership in that locality, good luck selling cars. So businesses, whether you know regulation or whether the politics of the day or this businesses are feeling it through their balance sheet, you see. So the insurance companies. Because they can raise the premium, but at a certain level. No premium is going to compensate you for the possibility of fires or possibility of floods or whatever it is. So they move up and now you have communities that are what?

Leigh Anne Lindsey: 48:29

do, they do and they're all around us A lot of people that we know.

Ralph Chami: 48:35

Each one of us knows someone who's been affected either by the floods, or by the drought, or by the mudslides, or it's affecting everyone. The reason the action is delayed is because the pain is not uniform. If the pain, the level of pain, was uniform across all of us on this land, on this beautiful land, we'd have acted much sooner. But it happens, you see, in California, and you say to yourself, well, I'm in Pennsylvania, it happens in Oklahoma, and you say, yeah, but I'm in Montana. But guess what? And this thing is following you everywhere and by the time it arrives at your door it's too late. But that's the job of us that are looking at the forest for the trees to say, hey, it is happening, we can see it in the business. So I focus on the market side, because I'm seeing it being priced now in the markets and what we want to do is engage in a positive way, because people are scared right now, no matter what the politics are, because they know something ain't right. My concern is remember. I mean, I was raised by the Jesuits, right? So it's always these stories in my head. There's Isaiah's story when he was trying to get his people to behave, if you still remember those stories right. And he's telling them tomorrow you shall die because of your debauchery. I scared them so much. They said we're going to die tomorrow. He said yes. I said good, let's have a big party today. So good, let's have a big party today. So if you scare people too much, they're going to tune us out. That's why, when I talk to people, I say this story has a happy ending and I truly believe in the human capability, because we got ourselves into this predicament. We know how to get ourselves out of it. Right, when we caused the ozone layer gap, we got together and we said we cannot continue like this. And guess what? That hole is shrinking. We removed all the gases, the free on, all this stuff that was causing the damage. So we know how to do this. At least we know what to stop doing. It's just a matter of do we have the will and the courage and the leadership? I mean, after all, you really don't want to be like Alice in Wonderland, right? Remember Alice when she got lost and she bumped into the cat and she said show me the way. And the cat said where do you want to go? And Alice says what if I don't know? And then the beautiful answer comes out says then what difference does it make? So you see, we need a vision of how we want to live for tomorrow. We want a vision of how we want to live for tomorrow. We want a vision of how we want to live in tomorrow for tomorrow. Once you have that vision, then you can come up with the actions that are needed. So the people need to see a vision. So what we do right when I work with the Bahamas, or I work with BVI, or all these countries we work in and communities First is the vision. Where do you wanna go? There's another project with our own, here, in our own backyard.

Ralph Chami: 51:33

Native Americans are bringing back what they refer to as the buffalo, the bison. So in a conversation with them I asked why are you bringing them back? And the answer was for social, cultural and health reasons. Because that was their diet. Also, turns out, and I visited the Wind River Reservation the Shoshones and the Arapahos are there. And we also went to Montana, where the black feet are. And what do you observe when you see the bison in their own element, that seedling that has been dormant for 150 years, recognized the original tenant, came back, that grass. It's amazing because of course, you can explain it physiologically, what these creatures are doing, but basically what it is. You see the tall grass coming back, which used to be there. So bringing back the bison brings back the grass, and that means the soil is healthier, and a healthier soil, like everything else, sequesters more carbon. Now, if you can figure out how much carbon is being added into the soil due to the bringing back the bison, you can calculate the carbon credits, or you can call them biodiversity credits, because that's now fauna and flora interacting with each other, and you can sell that Again. Just like you're restoring seagrass, restoring forests, you're restoring grassland, and the money that would come in would allow the Native Americans to buy back their land which is what they're doing and buy back the needed bison for their land, and you create a virtuous cycle, you see, so this is a project that we've signed on with all of Native tribes, all 93 tribes in the United States, starting in Montana all the way into Canada, actually, with the Blackfoot Nation. Okay so, but what it is is again, it's the same thing is bringing back nature that used to be there. It's restoration protection, and then you pick up the benefits of it and you create a virtuous cycle.

Ralph Chami: 53:44

Now, three principles are always in our work. You never sell the asset itself, so the seagrass of Bahamas is never sold. So when we go to the Bahamas or in BVI or whichever country we're operating in, or whichever indigenous people, local communities, we say never sell the underlying. And they'll say why? Because you don't know the true value of it. All you have is some idea about the carbon value. But when you have a healthy nature, it's doing a lot more than sequestering carbon, as we just discussed. So why would you want to sell it?

Ralph Chami: 54:22

Two, the money has to come back from the sale of the credits, has to come back to look after this nature in perpetuity. Why? Because it's only this nature that's alive and well and doing well is what's sequestered in carbon. So the seagrass, by being alive and thriving, is grabbing the carbon, enhancing the fisheries, staving off flooding. So you need that money from the sale of those credits have to be that money from the sale of those credits have to be directed towards the protection and restoration of this.

Ralph Chami: 54:52

And third, and if not most important, if you don't look after the people that look after the land, you're going to fail. So indigenous people and local community. The stewards of nature have to be part and parcel of this project, not as recipients, because no one wants to receive something for nothing. They want to be part of this. After all, they are part of it. It's just a recognition of their part, learning from them, working with them, creating relationships and learning from each other, and therefore they benefit from these projects. So be it. We're working with the maori, we're working with the native americans, working with the bahamas, we have projects all over and indonesia and so forth. It's the same. Three concepts, three principles have to be adhered to never sell the, the underlying. The money has to come back, and I don't usually when we do this, I don't take anybody's word for it. It has to be verifiable, it has to be transparent, it has to be accountable. It has to stand the test of who's watching the watch person, who's certifying the certifier.

Leigh Anne Lindsey: 56:05

And that's the end of part one of two. Ralph Chami is a member of Planetary Guardians and is chief economist for Wave and serves as senior advisor to a number of companies and NGOs, including Colossal, hena, moana, holo and Oceanus. Ralph has a BS from the American University of Beirut, an MBA in Finance and Statistics from the University of Kansas and a PhD in Economics from the John Hopkins University. He is a professional musician and songwriter and his latest musical collaboration is on the short film called Moana. As co-founder and CEO, blue Green Future, ralph is currently working on climate change and nature and biodiversity laws, developing a new framework for valuing natural capital to build an equitable and nature-positive economy. He has developed a new field called science-based finance and is leading and advising on projects around the globe, working with SIDs, indigenous peoples in the South Pacific and Native American tribes in the US, as well as governments in Indonesia, the Philippines, saudi Arabia, among others.

Leigh Anne Lindsey: 57:38

Thanks for listening to the Resilient Earth podcast, where we talk about critical issues and positive actions for our planet. Resilient Earth is produced by Planet Centric Media, a 501c3 non-profit, and Seastorm Studios Inc, located on the rugged North Sonoma Coast of Northern California. I'm Leanne Lindsey, producer and host, along with co-hosts and co-producers Scott and Tree Mercer of Mendonoma Whale and Seal Study, located on the South Mendocino and North Sonoma coasts. The music for this podcast is by Eric Allaman, an international composer, pianist and writer living in the Sea Ranch. Pianist and writer living in the Sea Ranch. Discover more of his music, animations, ballet, stage and film work at ericallaman. com. You can find Resilient Earth on Spotify, apple and Amazon podcasts, iheartradio, youtube, soundcloud and wherever you find your podcasts. Please support us by subscribing or donating to our cause.