Natural Capital
The stock of natural resources and ecosystem services that provide direct and indirect benefits to human society and economic systems.
Natural capital represents the world's stocks of natural assets including geology, soil, air, water, and all living organisms that provide humans with crucial ecosystem services and resources essential for survival and economic activity.
As a systems concept, natural capital emerged from efforts to integrate ecological systems with economic systems, recognizing that traditional economic models failed to account for the fundamental role of nature in supporting human activities. This framework builds on systems thinking by emphasizing the interconnected relationships between environmental and economic processes.
Natural capital can be categorized into several forms:
- Renewable resources (e.g., living species and ecosystems)
- Non-renewable resources (e.g., fossil fuels, minerals)
- Ecosystem services (e.g., carbon sequestration, water purification)
- Land
The concept introduces important feedback loops between human activity and environmental systems. For example, deforestation may provide immediate economic benefits but reduces the system's capacity to provide crucial services like water regulation and carbon sequestration, creating negative feedback consequences for human societies.
Understanding natural capital through a systems dynamics lens reveals several key properties:
- Threshold Effects beyond which ecosystem damage becomes irreversible
- Time Delays between environmental damage and observable impacts
- Complex Adaptive Systems in response to environmental change
The concept has influenced the development of ecological economics and various frameworks for measuring sustainability. It has also led to the emergence of concepts like ecosystem services valuation and environmental accounting, though these attempts to monetize nature remain reductionism.
Critics argue that the term "capital" inappropriately applies market logic to nature, potentially reinforcing the very mechanistic worldview that has contributed to environmental degradation. However, proponents maintain that making nature's value visible within economic systems is crucial for better decision-making and resource management.
The management of natural capital requires understanding of:
- Carrying Capacity
- Resilience in ecological systems
- Emergence of ecosystem interactions
- Complexity relationships between social and ecological systems
This systemic understanding helps inform approaches to sustainable development and the creation of policies that better reflect the true value and vulnerability of natural systems.