Exploring the Value of Natural Capital
Have you ever wondered about the true value of the natural world around us? Natural capital helps maintain the Earth’s natural resources, playing a crucial role in sustaining life and economic activities.
We’ll look at the concept of natural capital, it’s benefits, and the risks of failing to implement the required measures.
Understanding natural capital
Natural capital includes the world’s stock of natural resources. This includes assets such as waters, land, minerals, and forests, which are crucial for our existence.
It aims to integrate these assets into economic analyses, recognising natural resources as core to economic growth and sustainability.
Human activity often degrades natural capital, yet it is vital for providing a consistent flow of benefits. These range from tangible goods like building materials and genetic resources to regulatory services such as flood protection and carbon storage.
The benefits of natural capital
Protecting ecosystems
Natural capital provides essential ecosystem services that are crucial for human survival. For example, forests help produce oxygen, regulating the climate. Whereas wetlands act as natural filters, improving water quality and help to prevent flooding.
These ecosystems not only support human well-being but also provide the foundation for biodiversity, which is essential for maintaining a healthy and resilient planet.
Economic resources
Natural capital also supports economic activities by providing resources for various industries. For instance, forests are a source of timber and other wood products, while minerals extracted from the earth are used in manufacturing processes. Agriculture also relies heavily on natural capital for soil fertility and water resources, which are essential for crop production.
Tourism
Rural areas and beaches are a key part of the tourism industry, attracting visitors to areas with breathtaking landscapes, diverse wildlife. But if not protected, could negatively impact the local economies and jobs.
Climate change mitigation
Natural capital also plays a critical role in mitigating climate change. Forests act as carbon sinks, absorbing and storing carbon dioxide from the atmosphere. By protecting and restoring forests, we can help reduce greenhouse gas emissions and combat global warming.
Water regulation
Another benefit of natural capital is its role in regulating water flow and quality. Beaches, wetlands, and other natural habitats help to regulate water flow by absorbing rainfall and reducing the risk of floods. They also help to purifying waterways and improving quality.
Promoting public health
Access to green spaces, such as parks and forests, has been linked to improved mental well-being and reduced stress levels. These natural environments provide opportunities for physical exercise, which are needed for an active lifestyle.
The consequences of neglecting natural capital
We only have one planet, therefore it’s up to us as a collective to ensure its preservation. Without it, the consequences can be severe.
One major consequence is the loss of biodiversity. When natural habitats are destroyed or degraded, countless species lose their homes and face extinction. This not only disrupts ecosystems but also impacts people’s well-being, as we rely on these ecosystems for various services such as pollination and pest control.
When natural resources are exploited or degraded, it can lead to the loss of crucial ecosystem services. For example, deforestation reduces a forest’s ability to absorb carbon dioxide, contributing to climate change.
This has far-reaching consequences for human societies, such natural disasters and disruptions in food and water supply.
Damaging ecosystems can also lead to decreased productivity in sectors such as farming and fisheries. This can result in financial losses for businesses and communities dependent on such industries.
Economics Professor, Dieter Helm, offers strategies for natural capital policy in his book – Natural Capital: Valuing The Planet. Helm explains why the environment should be at the forefront of economic planning and suggests the framework for sustainable growth.
The role of biodiversity in natural capital
Biodiversity is a key component of natural capital, critical in supporting ecosystem functioning and resilience. It refers to the variety of living organisms, including plants, animals, and organisms, as well as the genetic diversity within species.
It helps to maintain the health and stability of ecosystems by providing a range of important services.
For example, diverse ecosystems are more resilient to disturbances and can recover more quickly from events such as wildfires or disease outbreaks. It also plays a role in cycling nutrients, pollination, and seed dispersal, which are essential for a natural ecosystem.
Through preserving natural capital, we can ensure the long-term provision of crucial ecological services that support human life. This not only benefits the environment but also has economic, social, and cultural benefits for communities.
