Natural capital

Definition

Natural capital refers to the world's stocks of natural assets, including geology, soil, air, water, and all living things. It is crucial for providing ecosystem services that support human life and economic activity. This concept emphasizes the importance of maintaining and sustainably managing these resources to ensure that they continue to provide benefits for future generations, linking closely with sustainable resource use and strategies for green growth.

5 Must Know Facts For Your Next Test

1. Natural capital plays a vital role in supporting human health and well-being by providing essential resources like clean air, water, and food.
2. The degradation of natural capital can lead to increased costs for society due to the loss of ecosystem services, affecting economic productivity and quality of life.
3. Investment in natural capital is essential for long-term sustainability; it involves restoring ecosystems and conserving biodiversity.
4. Measuring natural capital helps policymakers understand the value of ecosystems in economic terms, which can aid in making informed decisions about resource management.
5. Natural capital accounting is becoming more widely recognized as a method for integrating ecological health into national economic accounts.

Review Questions

• How does the concept of natural capital relate to sustainable resource management?
  • Natural capital is fundamentally tied to sustainable resource management as it emphasizes the need to recognize and preserve our natural assets. Sustainable resource management focuses on using resources in a way that maintains their availability for future generations. By understanding natural capital as an asset that provides critical ecosystem services, policymakers can create strategies that ensure these resources are not over-exploited and remain healthy for continued human benefit.
• Discuss the implications of investing in natural capital for green growth strategies.
  • Investing in natural capital has significant implications for green growth strategies because it promotes a shift towards a more sustainable economy. By prioritizing the restoration and maintenance of ecosystems, societies can enhance their resilience against climate change while also generating economic opportunities through sustainable practices. This investment helps balance economic development with environmental stewardship, ultimately leading to long-term benefits such as improved public health, enhanced biodiversity, and reduced carbon footprints.
• Evaluate how natural capital accounting can influence policy decisions aimed at sustainable development.
  • Natural capital accounting can profoundly influence policy decisions by providing a clearer understanding of the value of ecosystem services in economic terms. By incorporating this data into national accounts, policymakers can better assess the trade-offs between economic growth and environmental sustainability. This evaluation encourages investment in conservation efforts and sustainable practices by illustrating the long-term benefits of preserving natural resources over short-term gains from exploitation. Ultimately, this approach leads to more informed decisions that align economic activities with ecological health.

Related terms

ecosystem services: The benefits that humans receive from ecosystems, including provisioning services (like food and water), regulating services (such as climate regulation), cultural services (recreational and spiritual benefits), and supporting services (like nutrient cycling).

sustainable development: A development approach that meets the needs of the present without compromising the ability of future generations to meet their own needs, often focusing on the balanced integration of economic growth, environmental stewardship, and social equity.

green economy: An economic model that aims for sustainable development without degrading the environment, focusing on resource efficiency, reducing carbon emissions, and promoting biodiversity and ecosystem resilience.