Natural Capital

Definition

Natural capital refers to the world's stocks of natural assets, including geology, soil, air, water, and all living things. It encompasses the resources and ecosystem services that nature provides, which are vital for human survival and economic activity. Understanding natural capital helps to highlight the interconnectedness of ecosystems and the importance of conserving these resources for future generations.

5 Must Know Facts For Your Next Test

1. Natural capital includes both renewable resources, like forests and fisheries, and non-renewable resources, such as fossil fuels and minerals.
2. The degradation of natural capital can lead to reduced ecosystem services, impacting food security, clean water supply, and overall human well-being.
3. Investing in the restoration and conservation of natural capital can yield significant economic benefits by enhancing ecosystem services that support industries like agriculture and tourism.
4. Natural capital accounting is a method used to measure the value of natural resources and incorporate them into economic planning and decision-making.
5. Policies aimed at protecting natural capital are essential for achieving long-term sustainability goals and addressing issues like climate change and habitat loss.

Review Questions

• How does natural capital contribute to ecosystem services that benefit human societies?
  • Natural capital provides the foundational resources that support ecosystem services essential for human survival. For instance, forests contribute to air quality regulation through carbon sequestration, while wetlands act as natural water filters. By understanding this contribution, we can better appreciate the need for sustainable management practices that protect these natural assets and ensure they continue to deliver vital services.
• In what ways can the degradation of natural capital affect economic development and sustainability efforts?
  • The degradation of natural capital can severely hinder economic development by diminishing the availability of resources necessary for industries such as agriculture, fisheries, and tourism. As ecosystems decline, their ability to provide essential services also declines, leading to increased costs for water purification or food production. This creates a vicious cycle where economic growth becomes increasingly unsustainable due to over-reliance on depleted natural resources.
• Evaluate the importance of integrating natural capital into policy-making processes for sustainable development.
  • Integrating natural capital into policy-making is crucial for promoting sustainable development because it ensures that environmental considerations are factored into economic planning. By recognizing the value of ecosystems and their services, policymakers can create strategies that prioritize conservation while supporting economic growth. This holistic approach helps prevent resource depletion and encourages investments in green technologies, ultimately leading to more resilient economies that can adapt to environmental changes.

Related terms

Ecosystem Services: The benefits that humans receive from natural ecosystems, such as pollination, water purification, and climate regulation.

Sustainable Development: An approach to growth that meets the needs of the present without compromising the ability of future generations to meet their own needs, often relying on the conservation of natural capital.

Biodiversity: The variety of life in a particular habitat or ecosystem, which contributes to the resilience and productivity of natural capital.