Did you know that our planet’s natural capital is worth a lot? It’s valued between $16-54 trillion each year. This is from 17 ecosystem services across 16 different places. The average is about $33 trillion.
This shows how important our planet’s natural resources are. They help us in many ways, directly and indirectly. The Earth’s natural resources are worth much more than the global economy’s $18 trillion yearly.
Key Takeaways
- The current economic value of 17 ecosystem services across 16 biomes is estimated to be $16-54 trillion per year, with an average of $33 trillion.
- Global gross national product total is around $18 trillion per year, highlighting the immense value of our planet’s natural capital.
- Natural capital includes ecological resources, green infrastructure, and nature’s contributions to human welfare.
- Ecosystem services are critical to the functioning of the Earth’s life-support system and must be properly valued and managed.
- Awareness and understanding of natural capital’s significance are essential for making sustainable choices and protecting our planet’s resources.
Table of Contents
Understanding the Concept of Natural Capital
Natural capital is the base of our life. It gives us the resources and services we need to live. It includes things like plants, animals, air, water, and soil. These things give us many benefits, known as ecosystem services.
What is Natural Capital?
Natural capital is the stock of natural resources and ecosystems. They give us goods and services we need for a good life and economy. This includes the air we breathe, the water we drink, the food we eat, and the places where animals live.
It also includes forests that help control the climate. In short, natural capital is key to our life.
The Importance of Ecosystem Services
Ecosystem services are the benefits we get from natural capital. They can be divided into four main types:
- Provisioning services, like food, water, and materials
- Regulating services, such as controlling the climate and keeping air clean
- Cultural services, like fun activities, beauty, and spiritual feelings
- Supporting services, like helping plants grow and soil to form
Knowing the value of these services helps us make smart choices about natural capital. This way, we can keep getting these benefits for now and the future.
“Natural capital is the world’s stock of natural resources, which includes geology, soils, air, water, and all living organisms. This natural capital supports the benefits that humans obtain from the environment, known as ecosystem services.”
Valuing Nature’s Benefits
It’s important to value the benefits nature gives us. This makes the big role of natural capital clear. By putting a price on ecosystem services, we can work harder to keep nature’s gifts coming. Experts say nature’s yearly benefits are at least $125 trillion worldwide.
But, since nature is free, we often use it too much without thinking about the costs. This can harm our future and economy.
Economic Value of Ecosystem Services
Knowing the value of natural capital helps us make better choices. This includes using market ways to protect nature. For instance, the UK guides policymakers on valuing natural capital.
Also, Conservation International has a Natural Capital Protocol. It helps businesses see and value the nature they depend on and affect.
In Hawaii, a study changed a land plan on Oahu. It showed how valuable the area’s natural capital was. This led to a $290,000 fence that helped seabirds come back. Now, over 50,000 people visit the reserve every year, showing the economic good of protecting nature.
“Natural capital is about the idea that nature, if taken care of, produces a stream of benefits for current and future generations.”
Many strategies are key to saving nature, like making protected areas and fighting invasive species. In the UK, nature and its services are worth almost £1 trillion to the economy, says the Office of National Statistics.
Valuing nature’s benefits is more than just money. It’s about making choices that respect biodiversity and nature’s role in our lives. By understanding nature’s true value, we can make better decisions to protect it for all generations.
Ecosystem Services and Biomes
Our planet has many biomes, like lush forests and wide grasslands. These places give us many natural capital and ecosystem services that we need. These services help us with food, water, and even fun activities. It’s important to know what each biome offers to take good care of our environmental assets.
In the tropics, we find a lot of the world’s valuable natural capital. For example, coral reefs are very valuable, worth $352,249 per hectare each year. Wetlands are also very valuable, worth $140,174 per hectare each year.
| Biome | Estimated Value of Ecosystem Services (per hectare per year) |
|---|---|
| Coral Reef | $352,249 |
| Wetlands | $140,174 |
These biomes are full of biodiversity and ecological resources. They help us in many ways. For example, bats in Texas save farmers $740,000 a year by eating pests. Insect pollinators add $29 billion to the U.S. farm economy every year.
As we learn more about our planet’s ecological economics, we see the value of saving these green infrastructure places. Saving these areas is good for the planet and makes sense for our wallets. By understanding the value of ecosystem services, we can make better choices for a sustainable future.
How to Measure Natural Capital?
It’s key to measure and value natural capital well. This means understanding its true worth and using it in decisions. We look at the benefits nature gives us, who depends on them, and how our actions affect nature.
Identifying Dependencies and Impacts
First, we see how businesses, communities, and governments use nature’s services. We look at both direct and indirect ways they depend on natural capital. We also see the risks of losing these natural assets.
Mapping Natural Capital Stocks and Flows
Then, we map where natural capital is and its condition. This includes forests, wetlands, and minerals. We count the services they give us and value them in economic, social, and environmental terms.
| Natural Capital Asset | Ecosystem Services Provided | Estimated Economic Value |
|---|---|---|
| Forests | Carbon sequestration, habitat provision, water regulation, recreation | $10,000 per hectare |
| Wetlands | Flood control, water filtration, nutrient cycling, wildlife habitat | $15,000 per hectare |
| Freshwater aquifers | Water supply, irrigation, industrial use | $20 per cubic meter |
The Natural Capital Protocol is a tool to help businesses think about natural capital. By measuring and valuing it, we can make better choices. These choices balance our economic, social, and environmental needs.
Why Value Nature’s Benefits?
Understanding the value of our planet is key to making better choices. We need to see how nature helps our economy, society, and health. This helps us make choices that are good for the long run, not just now.
Fostering Sustainable Choices
Seeing the worth of nature leads to better ways to protect it. It means making choices that help the planet. By seeing the true value of natural capital, we choose to live in harmony with nature.
Nature’s benefits are worth at least US$125 trillion a year. But, we often take too much because we think it’s free. Now, governments and companies are learning to value nature for the long haul. They’re working together to put nature’s value into decisions.
By advocating for better conservation outcomes, we show how important nature is. For example, tiger habitats help with storing carbon and keeping soil healthy. This encourages us to make choices that are good for the planet. Also, getting businesses and banks to support nature can make a big difference.
“Ecosystem services” are the benefits we get from nature, like clean air, water, and food. They also help with climate control and keeping diseases away.
Valuing nature helps us focus on the big picture, not just quick gains. This leads to choices that are good for the planet. It keeps the services we need for a healthy life going.
Incorporating Natural Capital in Business
Businesses are now seeing the value of adding natural capital to their plans and choices. They learn about their needs and effects on natural capital. This helps them spot risks and chances linked to ecological resources and market-based conservation.
Risks and Opportunities
Companies that use ecosystem services and biodiversity could face problems if environmental assets get worse. But, managing natural capital well can give them an edge. This means better use of resources, lower costs, and a stronger brand.
The Natural Capital Protocol
The Natural Capital Protocol offers a way for businesses to measure and value their impact on nature. This helps them make choices that are good for the long run and the environment. Big names like Puma and Coca-Cola are using this method to get better at protecting the natural resources they need.
By adding natural capital to their plans, companies can find new chances, lessen risks, and help with ecological economics and saving our planet’s bio-capacity.
“Conserving wetlands near Kampala, Uganda, is more beneficial than using the areas for agriculture, as they act as natural sewage treatment, save resources in sanitation, act as a barrier against rising sea levels, and serve as a nursery for marine life valuable to the fishing industry.”
How to explain natural capital to a child
Talking about natural capital with a child can be fun and educational. It means the world’s natural resources like the earth, air, water, and living things. Think of it like a trust fund. If we use it too much or harm it, we’ll get fewer benefits over time.
Using Simple Analogies
Use simple stories to help a child get natural capital. Tell them it’s like a “trust fund” from nature. The ecosystem services we get, like clean air and water, are the “dividends”. We must take care of our natural resources and environmental assets to keep them safe for the future.
Connecting to Nature’s Wonders
Link natural capital to amazing things in nature, like a majestic waterfall, a lush forest, or a vibrant coral reef. Showing a child how beautiful and full of life these places are helps them see why we must protect them. This shows the value of the natural world around us.
With simple stories and connecting to nature, you can help a child understand and value natural capital. It’s key for our biodiversity, ecosystem services, and environmental well-being.
Examples of Companies Valuing Natural Capital
Companies are now seeing the value in natural capital and ecosystem services. They’re adding these to their business plans and decisions. This shows how companies can protect the natural resources they need for a sustainable future.
Puma, a sports apparel maker, looks at how its water use affects the whole supply chain. By understanding this, Puma has cut down its environmental harm. It also works with suppliers to handle water use costs and responsibilities.
Coca-Cola sees water as a key natural resource. The company aims to give back as much water as it uses in its drinks by 2020. This shows its dedication to keeping water resources safe for the future.
| Company | Natural Capital Initiatives | Benefits |
|---|---|---|
| Puma | Measured water usage across supply chain | Reduced environmental impact, improved water management |
| Coca-Cola | Measured water replenishment, improved freshwater ecosystem management | Achieved water neutrality target, enhanced water sustainability |
These companies are starting to see the worth of the natural capital they use. They’re taking steps to keep their operations sustainable. By understanding ecosystem services and biodiversity, they make better choices. This helps them lessen their environmental impact and protect our planet’s natural resources.
The Future of Natural Capital Accounting
Valuing natural capital is key to a sustainable future. Governments, businesses, and groups see how vital nature’s contributions are for our well-being and economy. Tools like the Natural Capital Protocol help measure and use natural capital in decisions.
More companies and policymakers are using these methods. This could lead to better choices that protect and restore natural ecosystems. Valuing nature’s trust fund is crucial for a sustainable future for us and the planet.
Measuring the True Value of Nature
Natural capital has economic, environmental, and social value. Adding natural capital valuation to decisions helps understand costs and benefits. Not considering natural capital can lead to poor choices and hidden costs.
There’s no single way to value natural capital yet. But, including it in decisions can lead to better solutions. Valuing natural capital helps us see the worth of services we didn’t value before. This doesn’t mean we’re turning nature into a commodity.
A Strategic Shift in the United States
The Biden-Harris administration plans to create the first natural capital accounts in the U.S. on Earth Day. An interagency group is working on it, with meetings in June and July. This effort aims to include nature in economic statistics.
Current economic stats don’t count natural assets and ecosystem services. Recognizing nature’s value is a big step towards a sustainable future.
“Valuing natural capital does not imply its commodification or privatization; it is about enabling informed decision-making that incorporates all potential impacts.”
Protecting Nature’s Trust Fund
Our planet’s natural capital is very important. It includes ecosystem services, biodiversity, and environmental assets that help us live. We must protect it for now and the future. It’s like keeping a financial portfolio safe.
By understanding the value of natural capital, we can make better choices. This helps us use our natural resources wisely. We need to use policies and markets that help protect nature. This also means businesses should be less harmful to nature.
New ways to fund nature protection are showing success. For example, Belize got $364 million to protect its marine life. And, a $900 million fund was set up for sustainable water projects. These efforts are leading the way to protect our planet.
| Initiative | Details |
|---|---|
| NatureVest Projects | Raised $3.3 billion in committed impact capital since 2014 |
| Sustainable Water Impact Fund (SWIF) | Closed in April 2020 with over $900 million in equity committed |
| Debt Conversion for Marine Conservation in Belize | A $364 million deal arranged by The Nature Conservancy (TNC) in October 2021 |
| TNC Portfolio Acquisition | Closed a deal in November 2021 with a portfolio of 1.16 million acres |
| TNC Forest Acquisition | Acquired 253,000 acres of working forests with $130.8 million in equity and debt in April 2019 |
Keeping nature safe is crucial for a good future. By taking care of our planet’s natural capital, we make sure it keeps giving us what we need.
“The economy should prioritize natural capital as a key foundation, but currently it is not central to economic policies.”
Conclusion
The idea of natural capital helps us see the value of ecosystem services and what nature gives us. It shows how important it is to keep our ecosystems healthy. This way, we can make choices that help our planet for the future.
Companies and governments are starting to think about natural capital in their plans. This is a big step towards a better future for our planet.
We hope this movement will make us value and protect the natural world more. By seeing the worth of biodiversity, environmental assets, and green infrastructure, we can find new ways to manage our resources. This will help us use nature’s contributions wisely and keep our planet healthy.
Working together, we can really see the value of natural capital. This is key for a good future for our kids and grandkids. We need to act fast, as our health and the planet’s health are closely linked. Let’s use natural capital to make a better tomorrow for everyone.
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