I am out of my depth, but let’s wing it!
I’m not an expert in environmental economics, but I strongly feel the need to highlight the importance of safeguarding clean air, fresh water, fertile soil, and healthy forests. I want to talk about why it’s really important to keep these natural capital assets safe. It’s not just because we need them to stay alive, but also because it’s the right thing to do.
I was inspired to write this article after having a fascinating and eye-opening conversation with my friend Ece Özdemiroğlu, who is the founder of eftec. She has a remarkable talent for simplifying complex environmental issues and making them accessible to ordinary people like myself. I’m not sure if I’ve managed to explain things as clearly as she did for me. Let’s see.
What are we doing to our planet?
The main reason why humans affect nature so much is that the rate at which they consume existing natural resources is faster than the rate at which nature replenishes these resources. For example, if we cut down trees faster than new ones can grow, forests get smaller. Social justice should be established not only for one or two generations sharing the world at the same time but also for all generations that will live in this world in the future. So, we should use natural resources in a way that thinks about the future, not just the next 20 years. This way of thinking connects to ideas like sustainability and social marketing in the circular economy. But before that let’s talk about Natural Capital.
What is Natural Capital?
Natural Capital is basically everything we get from nature or the environment around us. It includes all the stuff nature provides, like plants, animals, minerals, sunlight, and even tiny things like bacteria and viruses. But it’s not just the individual things – it’s also how they all work together, whether it’s because of humans or just naturally happening.
Why think of nature as ‘capital’? Capital is a concept about having a stock that gives flows of services or benefits, only if we look after the stock, of course.
There are different types of capital–produced capital, for example, machinery and infrastructure; human capital (people) and the product of their intellect (intellectual capital); money (financial capital); and social capital, the glue that keeps us together (yes, there is such a thing as society!).
When encouraging people to think about nature in their policy or business decisions, we want them to think of nature as a capital, as something good they depend on.
Natural Capital Stock: This is all the stuff we have in nature, like soil, air, water, plants, animals, and minerals. It’s everything that’s in the environment.
This capital stock is determined by how much of something we have but also by its quality. It’s not enough to have hectares and hectares of forest if all of it is one species with no other biodiversity, and if that species is vulnerable to many risks. Biological diversity increases resilience, that is, the ability to deal with risks.
These stocks provide us with benefits. These are called ecosystem services. Some of these benefits, we are aware of as we make direct use of them. Some even have markets. For example, using a lake for fishing or canoeing, or using stone to build houses. Basically, it’s how we use natural resources to do things we need or want.
There are also some other things nature does for us without us even asking, like when plants get pollinated or when peatlands and forests help store carbon. Some of these things we’ve even learned how to copy or use ourselves, like turning food waste into energy.
Why is Natural Capital Important?
Lots of people, like farmers and landowners, know how important Natural Capital is. They’ve already seen some of the value of the natural things they have as part of their businesses. But Natural Capital hasn’t always been seen as important in terms of money. That’s because the good stuff nature gives us often isn’t assigned a proper value. And when we mess with one part of nature, it can mess up other parts, too.
Take the Industrial Revolution, for example. When people started using coal to power steam engines, it caused a lot of pollution, which made people sick. But back then, nobody really thought about the cost of all that pollution.
Nowadays, though, we’re starting to realise just how crucial Natural Capital is, especially when it comes to dealing with climate change. Things like wind and solar energy, as well as the way forests and wetlands absorb carbon from the air, are really important for keeping our planet healthy.
And it’s not just about the environment – all businesses rely on nature in one way or another. In countries like New Zealand, for instance, tourism is a major industry, particularly in areas with beautiful landscapes and outdoor activities. The agriculture sector heavily depends on natural resources for producing high-quality food and beverages.
Some reckon that if we start including the value of nature in decisions, and treating it like a valuable asset that it is, more people will see the reasons to protect it. By showing the true cost of activities that harm the environment, like burning coal or using certain pesticides, we can start to make better choices. We need to make harming nature costly, and looking after it rewarding – not only morally but also financially.
For farmers and landowners, paying attention to Natural Capital could bring new opportunities. They might find ways to make money by helping companies reduce their impact on nature. And there are grants available to help with things like planting trees or restoring wetlands, which could also bring in some extra cash.
Who owns nature?
But there are still lots of questions to think about. Like, who really owns nature? This is a complex issue because while individuals or organizations may own land, resources like clean air, water, and biodiversity are shared by everyone. There’s an ongoing debate about how to manage and protect these shared resources fairly and sustainably.
And while some people might benefit from Natural Capital, not everyone will be able to take advantage of it in the same way. For example, large corporations might have the resources to invest in projects that enhance Natural Capital, while smaller farmers or communities might struggle to access the same opportunities. This raises concerns about equity and ensuring that the benefits of Natural Capital are distributed fairly among all members of society.
So, yes, the idea of Natural Capital is gaining more attention but it will take time for significant changes to happen. However, with increased awareness and support, there could be promising opportunities ahead for everyone involved. This means not only economic benefits for businesses and landowners but also the potential for improved quality of life in communities. Ultimately, making sure our communities are happy and healthy is one of the most important things we can do. By putting the well-being and prosperity of our communities first, we can build a brighter and more sustainable future for everyone.
What can we do?
We need new ways of looking at our economy, our money, and how we make rules and decisions (policies) to recognize how important natural resources are for our well-being. Natural capital accounting is like keeping track of how much natural assets we have, and how valuable they are to us. This can help us change the way our economies work so that they’re more sustainable, meaning they don’t use up all the Earth’s resources too quickly. We also need to create new tools to help people who make decisions like governments and businesses understand how valuable nature is when they plan out things like policies and projects.
If governments and businesses start fully accounting for natural resources and use new economic incentives, we can move our money away from things that harm the environment and towards things that help it. That’s why it’s so important to vote for parties that prioritize the environment. We need governments that focus on tackling climate change above all else. By supporting only these kinds of policies, we can take a significant step towards securing a healthier and more sustainable future for ourselves and future generations.
* I took this picture when I was in West Highlands last summer. The stunning scenery in the photo reminds us of the importance of protecting our natural world for generations to come.