SECTION 2 THE NATURAL CAPITAL STOCK APPROACH
| 2.1 |
The Natural Capital Stock Concept |
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Focus on Natural Capital Stock |
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| 2.1.1.5 |
The natural capital stock is particularly important since it provides both resource inputs (or 'source') and waste assimilation (or 'sink') functions. These can be expanded into three key aspects:
- non-renewable resources such as oil and minerals which are extracted from ecosystems;
- renewable resources such as fish, forest products and drinking water that are produced and maintained by the processes and functions of ecosystems; and
- environmental services, such as waste assimilation, maintenance of the quality of the atmosphere, generation of soils and recycling of nutrients.
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| 2.1.1.6 |
In fact the third element of 'environmental services' describes a wide range of ecosystem processes and functions which may also be thought of as renewable resources. |
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| 2.1.1.7 |
The functions provided by the natural capital stock are not limitless however; the productivity of human-made capital is more and more limited by the decreasing supply of complementary natural capital (Costanza et al 1997) and the decline in ecosystem (environmental) services can be linked to losses in major ecosystems (Hawken et al 1999). In other words, the integrity of the natural capital stock is being eroded by the depletion in natural resources used to produce man-made capital and by the loss of assimilative capacity from the accumulation of by-products of that process. Such impacts on sources and sinks are apparent globally and locally in many forms such as, inter alia, declining environmental quality of air and water, persistence of toxins in ecosystems, loss of biomass, and reductions in land availability. |
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| 2.1.1.8 |
The implication is that, in the developing world at least, human activity is exceeding the sustainable yield or 'interest' and eroding the natural capital stock, and it is the natural capital and no longer human capital, which is the limiting factor for development (Goodland and Daly 1996). It could be argued that in many ways the sustainable yield and natural capital stock cannot be defined by geographical boundaries because of the way the economies of the world are linked, particularly in relation to the employment of natural capital for global consumption. Effectively the carrying capacity of the natural capital is being exceeded which results in impairment of the internal sources of improvement of the quality of life (ie natural resources and environmental services of the natural capital stock), which leads to a non-sustainable path of development (Collados and Duane 1999). As a guide to what constitutes a more sustainable level, Daly (1990) has developed a number of basic criteria:
- the physical human scale must be limited within the carrying capacity of the remaining natural capital;
- for renewable resources, the rate of harvest should not exceed the rate of generation (sustainable yield);
- the rates of waste generation from projects should not exceed the assimilative capacity of the environment (sustainable waste disposal); and
- the depletion of non-renewable resources should require comparable development of renewable substitutes for that resource.
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| 2.1.1.9 |
A working approach to these criteria suggests that maintaining sustainable levels involves maximising the net benefits of economic development, subject to maintaining the goods, services and quality of the natural environment over time (Pearce et al 1989). Put simply, the minimum condition for sustainability is the maintenance of natural capital. Indeed, some authors (Hawken et al 1999) suggest that since population will continue to grow, it is not only necessary to maintain income levels, but that the stock of natural capital also needs to increase dramatically, requiring investment in so-called 'natural capitalism'. |
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