“It is time to recognize that human capital and natural capital are every bit as important as financial capital.”
Ban Ki-moon, Secretary-General, United Nations
The term Natural Capital describes planet Earth’s stock of natural assets including geology, soil, air, water and all living things. It is not a term with which the general public are particularly familiar, yet it describes something upon which all our futures depend.
From our Natural Capital we obtain the food we eat, the water we drink, medicines, the energy we use to light our homes and keep us warm, the fuel needed to produce our goods and power our transport systems, as well as building and manufacturing materials of all kinds. These are all things that we can see and use; but also provided by Earth’s Natural Capital are things we don’t necessarily see and appreciate, like the ability of forestry to prevent flooding and provide climate control; the carbon absorbing properties of peatland; the pollination of all our crops and wild plants by bees: and let us not forget the vast spectrum of pleasures, inspiration, and health giving activities which we humans gain from our connections with the natural world.
As everyone knows, spending or wasting too much of one’s financial capital can lead to debt or bankruptcy and, in consequence, poor health and even total collapse. The same applies to abusing Natural Capital; it needs to be preserved, used wisely and regenerated wherever possible. In our modern, highly developed world, we are used to seeing industrial projects and commercial enterprises of all kinds valued by their financial cost, but what of their impact on our planet and our nations’ Natural Capital?
The value of Natural Capital, and the cost to us all if it is lost, is something which ecologists are now suggesting should be considered in everything we do, whether it be expanding our cities, building power stations or mass producing cars. The financial aspects of all these things may be relatively easy to calculate, but assessing their cost in Natural Capital is not so easy and, in any case, commerce prefers to see the world through financial accounts not ecological concepts. Inevitably conversions are made into hard cash. Tell an economist that bees are under threat on British farmland and it may mean little; but explain that the value of bee pollination to British crops is £200 million a year and alarm bells start ringing.
Yet, even if they are effective, such cash conversions can be crude, they don’t really measure the true value of our natural assets. We need to learn to value them for themselves. If and when we start to do so, and adjust our priorities accordingly, so that all our human activities are assessed not just in financial capital but also in terms of our Natural Capital, we may find that there are alternatives in all kinds of fields which cost more financially, but use less of our natural resources and turn out to be more cost effective in terms of what really matters to our future.
*This article was inspired by http://naturalcapitalforum.com organisers of the 2017 World Forum on Natural Capital, in Edinburgh. Opinions expressed in this article are those of the author and do not necessarily represent the views of the organisers of the forum.