Gareth Huw Davies


Natural Capital – how free things make us all richer

Why do we know the value of the things we build, but not the Natural Capital that the planet provides for nothing?

There’s a price for property. Walk past any house in your neighbourhood, and if you know anything about local values, you can take an informed stab at the asking price if it went on sale.

Repeat the exercise with a piece of meadow, or a clump of trees or a pond or a length of hedge and, unless that land is already targeted for development, it is a far less precise exercise.

Farmers will be able to tell you how much the yield will be from a particular crop, or the value of the timber from a wood if it is cut down. But the monetary value of the sedge in that marshland or those alder trees for that hillside cannot, yet, be properly computed. You might even say that, without any hope of building on them, these places have no real value at all.

This state of affairs could, and should, change before long. The concept of “natural capital” is beginning to take hold. You are most likely to come across it in the bookshops, and currently in Tony Juniper’s What Has Nature Ever Done For Us? Juniper was on a panel at the Hay Festicval (2016) this month debating the question “Natural Capital: Securing the Future or Just a Sell-out?”

So is Natural Capital “a concept with increasing political and economic traction…[whether] it can help deliver an enhanced natural environment for the benefit of everyone, or whether it poses significant risks by making nature conservation a commodity.”

I first came across Natural Capital at Hay in 2015, in a talk by Dieter Helm .

This was his introduction:

“The trailblazing economist, author of The Carbon Crunch, shows the commonly held view that environmental protection poses obstacles to economic progress to be false. He explains why the environment must be at the very core of economic planning. He presents the first real attempt to calibrate, measure and value ‘natural capital’ from an economic perspective and goes on to outline a stable new framework for sustainable growth.

The government is aware of natural capital, and how important it might be. Last year to its credit, it extended the life of the Natural Capital Committee, which Helm has chaired since 2012.

This is one definition of Natural capital I found on the Internet:

“nature’s wealth, its infrastructure – the woods and forests, river systems, wetlands,  meadows, and the wildlife  and other assets they sustain –  provided, for nothing, by the world about us.

They are resources, some sustainable, some finite, that feed into the production of all kinds of goods and services,  which might be building sites for homes in the country, the sustenance provided from naturally occurring fish in the sea to the energy that comes from non-renewable assets such as oil and gas.”

This year the National Trust in an, admittedly, blunt attribution of value to an otherwise free natural asset, charged visitors to the Ashridge Estate to view a display of bluebells in a wood. In 2013 a picture of bluebells just like these was used to illustrate a report by the Natural Capital Committee, commissioned by the UK government.

The report defines natural capital as:

“the world’s stocks of natural assets which include geology, soil, air, water and all living things. It is from this Natural Capital that humans derive a wide range of services, ecosystem services, which make human life possible.”

This is another good article here .

Trevor Hutchings, WWF-UK’s director of advocacy, said this in 2016:

“The natural capital approach – by which we mean assessing the value of nature in terms of its economic and social benefits to humans in addition to its intrinsic value, and incorporating that value into decision making – has the potential to generate a step change in the way the environment is managed, helping to achieve much more sustainable and efficient management of the natural environment.

“This is because rather than allowing nature to be seen as something that is nice to have – yet ultimately unconnected to the economy and other aspects of our wellbeing as it has often been perceived – the natural capital approach recognises nature as a key foundation to our society and economy.”

There is another article here.

Natural capital applies to the hills and lakes and river banks around us. As we develop them and change them we risk losing a vital component of our environment. Until now we’ve taken that risk, largely through ignorance and indifference. The hope is that, in time, we will be able to apply an accountant’s slide rule over all these natural assets. Maybe then we know the value of everything, as well as its price.