The approach taken therefore has defined the different aspects of natural capital stock and the individual elements which together make up the natural capital stock by virtue of their values for more than one aspect of the stock. By linking the key aspects of the natural capital to the relevant environmental, cultural and natural resource guiding principles for the study, it has also been possible to identify the relevant indicators for each key aspect, and to define the individual elements of the natural stock to which that indicator is relevant.

The approach therefore recognises the inter-connectivity among the differing elements of the natural capital stock as well as the relationships among the natural capital and the human, man-made and social capital discussed in Section 2.1. In this way the approach taken addresses the multi-functional and inter-connecting nature of sustainability, and takes account of the dynamic nature of natural stock whereby environmental systems change in response to impacts. Since such changes may not always be reversible, for example in the case of reduced biodiversity through habitat losses and species extinction, the approach seeks to highlight the importance of protection of capital stock which cannot be replaced or substituted and to identify those effects which may lead to irreversible (or only very slowly reversible) environmental change.

Whilst this Environmental Baseline Report does not explicitly deal with economic and socio-economic aspects of sustainable development in Hong Kong(1) , it is relevant to note in this discussion that economic factors play a significant (if not primary) role in the pressures acting upon, and utilisation of, the natural capital stock. Natural capital contributes extensively to man-made capital and thus to economic prosperity, by yielding a flow of natural resources and services that enter the process of production (Costanza et al 1997). Sustainability suggests that the exploitation of natural capital for short term economic gain should be weighed against the long term implications of loss of capital stock (reversible vs irreversible) and the ability of future generations to benefit from the same stream of 'income' as is currently available.

(1) These are reported separated in the Socio-economic Baseline Report.

The natural capital stock approach has been adopted since it is considered to have resonance for sustainable development in Hong Kong. It is also consistent with the overall theme of the SUSDEV 21 study by allowing for examination of inter-linking drivers, impacts and effects among the different elements of the capital stock.

Within each main section of the report therefore the analysis is centred around an examination of the key groups of natural capital resources. Following the detailed discussion of each of these resources (and individual elements within them), an illustrative approach has been adopted with a graphic summarising the main pressures on the resource in Hong Kong and potential trends in responses or effects from these pressures, assuming that the impacts remain unchecked. Potential response actions, which might form a basis for future policy considerations, are included within each diagram, and the key messages are drawn out in the concluding paragraphs of each report section, although detailed policy response and mitigation is not within the scope of the discussion due to the complexity of the issues which would require more in-depth analysis at a detailed issue level. Instead the report provides an indication or 'health check' of current pressures and conditions for the natural capital stock based on a review and interpretation of existing baseline data.