I have to admit I had few expectations going into the Business Leaders for Michigan Leadership Summit that Michigan’s natural assets and environment would figure prominently into a discussion themed “Understanding the State’s Fiscal Health.” But the more I thought about it, and as the event moved forward without a single mention of the word environment, stewardship, natural assets, or protection – even while education, health, corrections, jobs, and economy where routinely mentioned – I became more convinced that something was wrong.
The event focused largely on the importance of honest, open, and transparent state accounting – “CAFRs”, or, Comprehensive Annual Financial Reports. But how can the ‘water wonderland’ fail to recognize the significant asset that is our state’s overall environmental health? It is easy enough to point to direct examples of industries that depend on a healthy environment to exist: fishing, tourism, foresty, etc… but where do these inputs show up on the balance sheet? Fish, trees, and gorgeous vistas don’t just spring from the ether one day and the next show up in factories as paper, in supermarkets as tasty fish. They take years, decades and millenia developing in healthy ecological and natural systems.
The idea of natural capital has been around for awhile and some business schools and several local companies are running with it. Dow Chemical has even teamed up with the Nature Conservancy and promised to consider the environment when it puts its balance sheet together. But overall, and this was made readily apparent during Monday’s Business Summit, the idea has made few inroads into the Michigan business community.
Lake Michigan used to sustain a fishing industry of immense size and diversity, but we failed to properly account for the asset. The result was predictable: overfishing of Lake Michigan caused the industry to largely collapse.
Governor Snyder has it right that we need to start planning long term and more openly and accurately account for our assets and liabilities. In a state that’s literally defined by its Great Lakes, we also need to more honestly and directly account for our natural assets and liabilities.