Editing Natural capital (section)

== History of the concept ==
{{Ecological economics|Concepts}}
The term 'natural capital' was first used in 1973 by [[E. F. Schumacher]] in his book ''[[Small Is Beautiful]]''<ref>{{Cite book|title=Small is Beautiful: A Study of Economics As If People Mattered|url=https://archive.org/details/smallisbeautiful1973schu|url-access=registration|last=Schumacher|first=E.F|year=1973|publisher=New York, Harper & Row|isbn=978-0-06-136122-7}}</ref> and was developed further by [[Herman Daly]], [[Robert Costanza]], and other founders of the science of Ecological Economics, as part of a comprehensive critique of the shortcomings of conventional economics.<ref>{{Cite journal|last1=COSTANZA|first1=ROBERT|last2=DALY|first2=HERMAN E.|date=March 1992|title=Natural Capital and Sustainable Development|journal=Conservation Biology|volume=6|issue=1|pages=37–46|doi=10.1046/j.1523-1739.1992.610037.x|bibcode=1992ConBi...6...37C |issn=0888-8892}}</ref><ref>{{Cite journal|last=Farber|first=Stephen|date=June 1999|title=An Introduction to Ecological Economics. Edited by Robert Costanza, John Cumberland, Herman Daly, Robert Goodland and Richard Norgaard, St. Lucie Press. 1997, pp. 288.|isbn=1-884015-72-7|url=https://archive.org/details/introductiontoec0000unse_q2b0|url-access=registration|journal=Ecological Economics|volume=29|issue=3|pages=488–490|doi=10.1016/s0921-8009(99)00029-4|issn=0921-8009}}</ref> Natural capital is a concept central to economic assessment [[ecosystem valuation|ecosystem services valuation]] which revolves around the idea, that non-human life produces goods and services that are essential to life. Thus, natural capital is essential to the sustainability of the economy.

In a traditional economic analysis of the factors of production, natural capital would usually be classified as "land" distinct from traditional "capital". The historical distinction between "land" and "capital" defined "land" as naturally occurring with a fixed supply, whereas "capital", as originally defined referred only to man-made goods. (e.g., [[Georgism]]<ref>[http://www.henrygeorge.org/pchp2.htm] – ''[[Progress and Poverty]]'' by [[Henry George]], Chapter 2.</ref><ref>{{cite web|url=http://www.henrygeorge.org/def2.htm|title=Economic Definitions|website=www.henrygeorge.org}}</ref>) It is, however, misleading to view "land" as if its productive capacity is fixed, because natural capital can be improved or degraded by the actions of man over time (see [[Environmental degradation]]). Moreover, natural capital yields benefits and goods, such as timber or food, which can be harvested by humans. These benefits are similar to those realized by owners of infrastructural capital which yields more goods, such as a factory that produces automobiles just as an apple tree produces apples.

Ecologists are teaming up with economists to measure and express values of the wealth of ecosystems as a way of finding solutions to the biodiversity crisis.<ref name="Edwards98">{{Cite journal|last1=Edwards|first1=P. J.|last2=Abivardi|first2=C.|year=1998|title=The value of biodiversity: Where ecology and economy blend|journal=Biological Conservation|volume=83|issue=2|pages=239–246|doi=10.1016/S0006-3207(97)00141-9|bibcode=1998BCons..83..239E }}</ref><ref name="Naidoo09">{{Cite journal|last1=Naidoo|first1=R.|last2=Malcolm|first2=T.|last3=Tomasek|first3=A.|year=2009|title=Economic benefits of standing forests in highland areas of Borneo: quantification and policy impacts|journal=Conservation Letters|volume=2|issue=1 |pages=35–44|doi=10.1111/j.1755-263x.2008.00041.x|doi-access=free|bibcode=2009ConL....2...36N }}</ref><ref name="Zhoua09">{{Cite journal|last1=Zhoua|first1=X.|last2=Al-Kaisib|first2=M.|author3-link=Matthew Helmers|last3=Helmers|first3=M. J.|year=2009|title=Cost effectiveness of conservation practices in controlling water erosion in Iowa|journal=Soil and Tillage Research|volume=106|issue=1|pages=71–8|doi=10.1016/j.still.2009.09.015}}</ref> Some researchers have attempted to place a dollar figure on ecosystem services such as the value that the Canadian boreal forest's contribution to global ecosystem services. If ecologically intact, the boreal forest has an estimated value of US$3.7 trillion. The boreal forest ecosystem is one of the planet's great atmospheric regulators and it stores more carbon than any other biome on the planet.<ref name="Jonsson09">{{Cite journal|last1=Jonsson|first1=M.|last2=Wardle|first2=D. A.|year=2009|title=Structural equation modelling reveals plant-community drivers of carbon storage in boreal forest ecosystems|journal=Biology Letters|volume=6|issue=1|pages=1–4|doi=10.1098/rsbl.2009.0613|pmc=2817262|pmid=19755530}}</ref> The annual value for ecological services of the Boreal Forest is estimated at US$93.2 billion, or 2.5 greater than the annual value of resource extraction.

The economic value of 17 ecosystem services for the entire biosphere (calculated in 1997) has an estimated average value of US$33 trillion per year.<ref name="Costanza97">{{Cite journal|author=Costanza, R.|display-authors=etal|year=1997|title=The value of the world's ecosystem services and natural capital.|url=http://www.uvm.edu/giee/publications/Nature_Paper.pdf|url-status=dead|journal=Nature|volume=387|issue=6630|pages=253–260|doi=10.1038/387253a0|archive-url=https://web.archive.org/web/20091226124242/http://www.uvm.edu/giee/publications/Nature_Paper.pdf|archive-date=2009-12-26|bibcode=1997Natur.387..253C|s2cid=672256}}</ref>  These ecological economic values are not currently included in calculations of national income accounts, the GDP and they have no price attributes because they exist mostly outside of the global markets.<ref name="Ferguson06">{{Cite journal|last=Ferguson|first=K.|year=2006|title=The True Value of Forests|journal=Frontiers in Ecology and the Environment|volume=4|issue=9|page=456|doi=10.1890/1540-9295(2006)4[452:D]2.0.CO;2|jstor=3868812}}</ref><ref name="Anielski05">{{cite web|url=http://www.borealcanada.ca/pr_docs/Boreal_Wealth_Report_Nov_2005.pdf|title=Counting Canada's Natural Capital: Assessing the Real value of Canada's Boreal Ecosystems|last1=Anielski|first1=M.|last2=Wilson|first2=S.|year=2005|location=Can. Bor. Ini., Pembina Institute, Ottawa|archive-url=https://web.archive.org/web/20051207011844/http://www.borealcanada.ca/pr_docs/Boreal_Wealth_Report_Nov_2005.pdf|archive-date=2005-12-07|url-status=dead}}</ref> The loss of natural capital continues to accelerate and goes undetected or ignored by mainstream monetary analysis.<ref name="Wakernagel97">{{Cite journal|last1=Wakernagel|first1=M.|last2=Rees|first2=W. E.|year=1997|title=Perceptual and structural barriers to investing in natural capital: Economics from an ecological footprint perspective.|journal=Ecological Economics|volume=20|issue=1|pages=3–24|doi=10.1016/S0921-8009(96)00077-8|bibcode=1997EcoEc..20....3W }}</ref>

Within the international community the basic principle is not controversial, although much uncertainty exists over how best to value different aspects of ecological health, natural capital and ecosystem services. [[Environmental full-cost accounting|Full-cost accounting]], triple bottom line, measuring well-being and other proposals for accounting reform often include suggestions to measure an "ecological deficit" or "natural deficit" alongside a social and financial deficit. It is difficult to measure such a deficit without some agreement on methods of valuation and auditing of at least the global forms of natural capital (e.g. value of air, water, soil).<ref>{{Cite web|url=http://www.fao.org/nr/sustainability/full-cost-accounting/en/|title=Sustainability Pathways: Full-cost accounting|website=www.fao.org|access-date=2020-03-10}}</ref>

All uses of the term currently differentiate natural from man-made or infrastructural capital in some way. Indicators adopted by United Nations Environment Programme's [[World Conservation Monitoring Centre]] and the [[Organisation for Economic Co-operation and Development]] (OECD) to measure natural biodiversity use the term in a slightly more specific way. According to the OECD, natural capital is "natural assets in their role of providing natural resource inputs and environmental services for economic production" and is "generally considered to comprise three principal categories: natural resources stocks, land, and ecosystems."

The concept of "natural capital" has also been used by the [[Biosphere 2]] project, and the [[Natural Capitalism]] economic model of [[Paul Hawken]], [[Amory Lovins]], and [[Hunter Lovins]]. Recently, it has begun to be used by politicians, notably Ralph Nader, Paul Martin Jr., and agencies of the UK government, including its [[Natural Capital Committee]] and the London Health Observatory.

In ''[[Natural Capitalism: Creating the Next Industrial Revolution]]''<ref>{{Cite book|last=Hawken|first=Paul |author2=Amory Lovins |author3=Hunter Lovins |title=Natural Capitalism: Creating the Next Industrial Revolution|url=https://archive.org/details/naturalcapitali000hawk|url-access=registration|year=1999|publisher=Little, Brown and Company |isbn=978-0-316-35316-8 }}</ref> the author claims that the "next industrial revolution" depends on the espousal of four central strategies: "the conservation of resources through more effective [[manufacturing]] processes, the reuse of materials as found in natural systems, a change in values from quantity to quality, and investing in natural capital, or restoring and sustaining [[natural resources]]."<ref name="nat">[http://www.socialfunds.com/news/print.cgi?sfArticleId=164 Book Review: Natural Capitalism] {{Webarchive|url=https://web.archive.org/web/20100103203021/http://socialfunds.com/news/print.cgi?sfArticleId=164 |date=2010-01-03 }} from [https://web.archive.org/web/20220303132112/https://socialroth2014funds.com/ Socialfunds.com]. Retrieved April 2009.</ref>