Natural Capital

Definition

Natural capital refers to the world’s stocks of natural assets, including geology, soil, air, water, and all living things. It plays a crucial role in sustainable development by providing ecosystem services that support life and economic activities. This concept emphasizes the importance of preserving these natural resources to ensure long-term ecological health and economic stability, highlighting the interconnectedness of environmental concerns and human well-being.

5 Must Know Facts For Your Next Test

1. Natural capital is essential for supporting various ecosystem services that contribute to human survival and economic activities.
2. The degradation of natural capital can lead to significant economic costs, affecting food security, health, and livelihoods.
3. Investing in the preservation and restoration of natural capital is crucial for achieving sustainable development goals.
4. Natural capital accounting is a method used to measure and value the stocks and flows of natural resources to integrate them into economic decision-making.
5. Policies aimed at reducing environmental harm often emphasize the protection of natural capital as a means to ensure long-term sustainability.

Review Questions

• How does natural capital influence sustainable development practices?
  • Natural capital influences sustainable development by providing essential resources and ecosystem services that are necessary for human life and economic activities. It emphasizes the need to balance resource use with conservation efforts to maintain these natural assets for future generations. By recognizing the value of natural capital, policymakers can create strategies that promote both economic growth and environmental protection.
• Discuss the implications of depleting natural capital on global economies.
  • Depleting natural capital has profound implications for global economies as it leads to diminished resources such as clean water, fertile soil, and biodiversity. This depletion can disrupt food systems, increase vulnerability to climate change, and elevate costs related to health care due to environmental degradation. Economies that rely heavily on natural resources may face crises if these resources become scarce or degraded, highlighting the urgent need for sustainable practices.
• Evaluate strategies for integrating natural capital into economic decision-making processes.
  • Integrating natural capital into economic decision-making involves developing methods like natural capital accounting, which quantifies the value of ecosystem services and resources. Policymakers can implement regulations that encourage businesses to assess their environmental impacts and invest in conservation efforts. Additionally, public awareness campaigns can promote sustainable consumption patterns among consumers. By embedding natural capital considerations into corporate governance and public policy, societies can enhance resilience against environmental challenges while fostering sustainable economic growth.

Related terms

Ecosystem Services: The benefits that humans derive from ecosystems, including provisioning services like food and water, regulating services such as climate regulation, cultural services related to recreational and spiritual benefits, and supporting services essential for the production of all other ecosystem services.

Sustainable Development: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, focusing on a balanced approach between economic growth, environmental protection, and social equity.

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