Method

Natural capital

Overview

Natural capital is the world's stock of natural resources, which includes geology, soils, air, water and all living organisms. Some natural capital assets provide people with free goods and services, often called ecosystem services. All of these underpin our economy and society, and thus make human life possible.

It is an extension of the economic notion of capital (resources which enable the production of more resources) to goods and services provided by the natural environment. For example, a well-maintained forest or river may provide an indefinitely sustainable flow of new trees or fish, whereas over-use of those resources may lead to a permanent decline in timber availability or fish stocks. Natural capital also provides people with essential services, like water catchment, erosion control and crop pollination by insects, which in turn ensure the long-term viability of other natural resources. Since the continuous supply of services from the available natural capital assets is dependent upon a healthy, functioning environment, the structure and diversity of habitats and ecosystems are important components of natural capital. Methods, called 'natural capital asset checks', help decision-makers understand how changes in the current and future performance of natural capital assets will impact human well-being and the economy. Unpriced natural capital is what we refer to when businesses or individuals exploit or abuse nature without being held accountable, which can harm ecosystems and the environment.

Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).

Possible passages

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This balance of produce and consumption is entirely different from what is called the balance of trade. It might take place in a nation which had no foreign trade, but which was entirely separated from all the world. It may take place in the whole globe of the earth, of which the wealth, population, and improvement, may be either gradually increasing or gradually decaying.
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
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Other examples might be added, but these are sufficient. Capital which exists in any of these durable shapes, and the return to which is spread over a period of corresponding duration, is called Fixed Capital. Of fixed capital, some kinds require to be occasionally or periodically renewed. Such are all implements and buildings: they require, at intervals, partial renewal by means of repairs, and are at last entirely…
John Stuart Mill, Principles of Political Economy
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In buying by the gross, to sell in the same manner; 4. In buying by the gross, to sell by retail. These four modes of employing capital are equally necessary to, and serve mutually to support, each other. The first supports, beyond all comparison, the greatest number of productive hands; the second occupies more than the two remaining; and the fourth the fewest of any. Capital may be employed, according to the third…
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations
States what Natural capital is.
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Philosophers who discussed Natural capital

Nicholas Georgescu-Roegen

Related ideas

Place in the tradition

Part of Ecological economics.

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