WHAT IS A LIVING WHALE WORTH...

 Hello everyone, today I listened to a broadcast on National Public Radio that I think is worth sharing. This is a huge departure from my normal blog posts. I hope you find it interesting and worthwhile. I sure did...

"MANOUSH ZOMORODI, HOST:

Today on the show, Found in Translation.

RALPH CHAMI: I'm sitting at the edge, and suddenly this magnificent creature surfaces. And I'm thinking, that's a blue whale.

ZOMORODI: Ralph Chami was on a boat in Mexico's Gulf of California when he saw his first whale up close.

CHAMI: And she's massive. And she comes up and - to breathe, and that breath is like a train. And she dives, and she comes up, and she blows all that air out.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #1: Oh, wow.

CHAMI: I mean, I had tears in my eyes. I'm seeing this incredible mystery unfolding in front of me, thinking, where have I been all this time? And life has never been the same.

UNIDENTIFIED PERSON #2: Oh.

ZOMORODI: Ralph is an economist who recently left the International Monetary Fund after 25 years there.

CHAMI: And within the IMF, I worked on all kinds of issues. I'm an expert on fragile states and conflict-affected countries.

ZOMORODI: It was a very stressful job.

CHAMI: What happened was after you work on fragile states and you lead missions there - these are dangerous missions, really - and you become fragile yourself.

ZOMORODI: So, in 2017, he was on a rare break. An old friend who knew how much he loved the ocean got him a spot on an expedition studying whales. The researchers told Ralph he had one job.

CHAMI: If you really want to help, Ralph, clock when the whale breaches, when it dies.

ZOMORODI: At night, the whole team would go ashore to unwind.

CHAMI: We'd all cook together. And some of us would cook. Some of us would clean.

ZOMORODI: One night, Ralph joined a dinner-table discussion that stuck with him.

CHAMI: And so we are sitting around the table and having conversations about the whales, and I'm on my third glass of wine trying to get into a conversation, and I overhear a conversation about whale carbon.

ZOMORODI: Whale carbon, the amount of carbon dioxide that a whale houses in its body away from the atmosphere.

CHAMI: They said, well, they have tremendous amount of carbon.

ZOMORODI: Because whales eat massive amounts of krill, which themselves feed on phytoplankton, single-cell plants.

CHAMI: Now, why is phyto important? 'Cause phytoplankton is really where the biological life of the ocean starts. They capture about 33 gigatons of carbon dioxide per year. That's equivalent to the work of four Amazon Forests. So the whales eat krill. The krill eats phyto. And then what does the phyto need to survive? Well, they need phosphorus, nitrogen and iron. And all three factors are in the poop of the whales. So it's a virtuous cycle. Whale feeds on krill. Krill feeds on phyto. Phyto needs the poop of the whale. So this whale is not only grabbing carbon on its body. It's fertilizing the phyto. So the whale is a great ally in the fight against climate change. You see? It was the greatest story never told. That's what I kept saying to myself.

CHAMI: So you have this wonderful cycle.

ZOMORODI: Here's Ralph Chami on the TED stage.

CHAMI: The whale feeds on the krill. The krill feeds on the phyto, and the phyto needs the poop of the whale to get more active. And when the phyto gets more active, it grabs more carbon dioxide from the atmosphere. Now, that's good news, right? Yeah. Except that whales are dying. They're dying from ship strikes. They're dying from pollution. They're dying from entanglements. In fact, they're dying because our current economic system puts zero value on a living whale. But chop a whale, sell it for its meat, it acquires a value.

The value of a living whale is zero, $0, zero in any currency. I'm a financial economist. And I'm listening to these scientists bemoaning what's happening to the whales, and I wanted to help. I didn't know how to help. And I thought, wait a minute. Maybe I can bring your message to the audiences around the world. Maybe I can translate all of that value, those services that they do for us, in a language that we can all understand. It's the language of dollars and cents.

ZOMORODI: What was going through your mind? I mean, it sounds like your brain was kind of set on fire in some ways.

CHAMI: Yes. Right away, my mind went to value, value of the carbon captured by a whale, because, you know, I'm an economist. I work on wages and people's earnings. And I said, so whale carbon - how much would I be paying the whale for fighting climate change? What if I could value the services of the whale?

CHAMI: I was Googling, and I found nothing on this at all. I'm a financial economist, so I'm looking at it from a market valuation. And I knew that that whale was worth a lot of money in countries where they still eat whale meat. So that whale had a value, 40,000 to 80,000, depending on the size of the whale. But a living whale had no value. So thinking, well, how would I go about doing it?

CHAMI: After all, the whale is a living system. The whale captures carbon on her body, and she gives birth to baby whales who also grow up to capture carbon on their body. And they give birth to whales and so forth, and indirectly through the fertilization of phyto. So how would you do something like this? Well, I looked at it and I said, wait a minute. This looks like a share of stock that pays dividends, except those dividends are live dividends. They give birth to more dividends.

So if I were to track the whale over her lifetime and keep track of all these dividends into the future and then multiply that by the price of carbon and discount that all the way to the present, I can figure out what is the present value of the lifetime earnings of a single whale. Would you like to know how much?

CHAMI: Would you like to know how much?

UNIDENTIFIED AUDIENCE MEMBERS: Yes.

CHAMI: At least $3 million - at least.

ZOMORODI: Three million dollars per whale. Now, that's just an estimate because for now, there's no standardized way for countries and companies to price carbon. But Ralph says that needs to happen ASAP because companies and governments have made a lot of promises to go carbon neutral, and pretty soon, they'll need to deliver on those promises.

CHAMI: So voluntary carbon markets, that's what we have right now. But in Europe, the regulation is coming. Even the Biden administration is coming around the idea of interest around the protection of nature and its biodiversity and dealing with climate change. And it's no longer the privy of just the governments. The consumers are asking companies, what is your footprint? Investors, I mean, billionaires - I know some of them that are saying now, I don't want my money to be invested in extractive services. I don't want to be linked to companies that have a huge carbon footprint.

ZOMORODI: For the last six years, Ralph has been working to envision a new kind of marketplace, one that doesn't extract from nature but puts a value on it. He calls his solution science-based finance. And he's not just applying it to whales but to elephants, wildebeest, seagrass. Right now, he's working with the Bahamas on one pilot project.

CHAMI: So they mapped the seafloor of the Bahamas and discovered that the Bahamas is sitting on 30% of the total mass of seagrass in the world.

ZOMORODI: In the world.

CHAMI: Yeah. According to my calculations and my colleagues', that is worth about $150 billion. So I am sitting on seagrass. And you, Microsoft - you need to offset your carbon footprint. You made a commitment to go carbon negative. So here's what we do. How much carbon do you need? And Microsoft says, well, for this year, I need 100 tons. For next year, 150. I say, OK, I'll sell you these from my seagrass. You pay me that money because remember, in order for the seagrass to do its work, it has to stay alive and well, which means you also have to look after the sea turtles and the apex predator, the tiger sharks, because if the tiger sharks die, the sea turtles would completely destroy the seagrass.

So, when you're investing in seagrass, you're impacting food security. When you're investing in seagrass, you're looking after fauna. When you're investing in seagrass, you're looking after the people, the communities. You're alleviating poverty. You're creating employment. You're bringing new businesses. So suddenly, for Microsoft, they can put on their website, look. We are purchasing the carbon of the seagrass. We're ensuring that seagrass lives forever. We're investing in nature in perpetuity. By creating resilience in nature, we create resilience in the people.

ZOMORODI: Not to be cynical, though, Ralph, but who is going to keep track of all this? Who's going to make sure that the people who say they're going to grow more seagrass actually grow it? Who's going to make sure that the companies actually spend the money to buy the carbon offsets from the seagrass growers? How do we keep track of all this?

CHAMI: Exactly. Who verifies the verifier? Who certifies the certifier? Who's watching the watch person? That's what you're asking. Well, I have worked on financial development for 30 years. Every nascent market is subject to gold rush behavior, double-counting, triple-counting, cheating. I mean, for Pete's sake, even mature markets - how many times do we hear about all kinds of insider trading on Wall Street? So especially nascent markets are subject to these things. But if the market is to take off, we need to solve these issues. Some of them the market themselves would solve. Some of it, we'd need a policy because I am now telling people conservation is not a cost proposition. Conservation now - we've turned it upside down - is a profit-making proposition. Just think about it. What this paradigm does - it turns it upside down, says no, you are conserving what is now an asset. And that asset has value. It's producing cash flows for you. So, of course, you need to protect it.

ZOMORODI: Part of me feels very sad that we humans don't know how to value nature in and of itself, that we need to translate it into monetary value. Is money the only language we really speak?

CHAMI: You know, with this calling, I've met so many people. I remember being at the International Labour Organization. And right before I spoke, a woman - she said to me, I'm appalled that you're putting a price on nature. And I said, do you work for free? And she said no. I said, why should the elephant work for free?

ZOMORODI: Yeah.

CHAMI: Why do I allow for myself what I would not allow for nature? I find that the epitome of arrogance, that humans prefer to sing songs about nature and write poetry as they watch it die, taking its last breath in front of us. You see, if we were not in the 11th hour, if all people appreciated nature for its intrinsic value, you wouldn't be interviewing me. But we are at a point in time where, despite our best efforts, nature is dying as we speak. And we're dying because the language that we have chosen for ourselves is the language of dollars and cents. Leave the tree where it is and make money. Leave the whale for itself and make money. So I'm really not about nature. I'm really about changing people's behavior.

ZOMORODI: You're like the Lorax. You speak for the trees.

CHAMI: I would love to. I would be honored if I'm thought that way.

ZOMORODI: (Laughter).

CHAMI: But I'm trying my best to take what the scientists are saying and translate it into the language that we have chosen. If we choose a different language, it's a translation. Now, all translations suffer, right?

ZOMORODI: Right.

CHAMI: But let's not wait till we get it perfect because if we want to make it perfect, there'll be nothing left.

ZOMORODI: That's economist Ralph Chami. He recently retired from the International Monetary Fund after 25 years. You can find him at bluegreenfuture.org. To see his full talk, go to ted.com. On the show today, Found in Translation. I'm Manoush Zomorodi, and you're listening to the TED Radio Hour from NPR. We'll be right back".

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