A Handbook for Understanding Natural Capital - Earth Economics

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Value Value Value Value Natural capital does for free what built capital does at great cost. Built capital breaks down, affecting surrounding ecosystems, animals, and people. The benefits provided by built capital are typically short term because it depreciates over time, eventually needing to be replaced. Over time, natural capital appreciates in value. This appreciation is due in part to the fact that natural capital is constantly being regenerated by living organisms converting energy from the sun into growing biomass—the foundation for life on Earth. Appreciation is also due to increased scarcity and approaching thresholds. For example, timber harvest is now limited by land availability and tree growth rather than availability of logging equipment. Natural capital provides benefits over a long period of time (centuries or longer), and requires very little maintenance. The The “Asset Value” of of the the Nisqually Watershed Watersheds provide economic benefits across across 3me. 3me. Measuring the the value value of watersheds of across across decades decades is important; is it determines it how how we we invest invest watershed in assets. assets. Natural capital capital Built Built capital capital VS. VS. 2009 20092025 20252050 20502100 2100 Year Year 2009 20092025 20252050 20502100 2100 Year Year Natural Natural capital capital provides provides benefits benefits over over vast base vast amounts amounts of
SO WHAT’S THE PROBLEM As ecosystems are lost, so are the services those ecosystems previously provided. Once, raw materials were plentiful and built capital was scarce. As a result, we live in a society that has long placed great value on built capital like roads, dams and machinery, and less value on the raw materials (natural capital) required to construct these things. Over the past 50 years, however, humans have altered ecosystems more rapidly and extensively than in any comparable period in human history. Today we have plenty of built capital, while natural capital like healthy wetlands, forests and working lands has become the limiting factor to further economic development. Today’s scientific studies consistently conclude that humans are depleting Earth’s flow of natural services faster than the flow can be regenerated, because the natural capital that produces these services is being destroyed. For example, it has been estimated that humans now directly or indirectly consume up to 40% of the Earth’s Annual Net Primary Productivity. Net Primary Productivity (NPP) is the total biomass (forests, mangroves etc.) produced by ecosystems through photosynthesis each year. As humans consume more biomass, less is available for the millions of other species on the planet, which can cause food webs to collapse and place greater stress on the environment. A THRESHOLD is a point at which a system may experience a dramatic change, or collapse. Thresholds may include heavy rainfall triggering landslides and floods, loss of habitat causing species extinction or dramatic climate change. 8
Page 1 and 2: WHAT IS YOUR PLANET WORTH A Handboo
Page 3 and 4: suggested citation Schrier, A. V.,
Page 5 and 6: Things are changing! Exciting metho
Page 7 and 8: BENEFITS OF A HEALTHY ECOSYSTEM Wha
Page 9: WHAT DO WE PAY FOR THESE SERVICES T
Page 13 and 14: Built Capital Natural Capital Defin
Page 15 and 16: s in action WATERSHEDS The federal
Page 17: s in action MANGROVE FORESTS Mangro
Page 21 and 22: MAKING A CASE FOR INVESTING IN ECOS
Page 23: Are Values of Ecosystem Services th
Page 26 and 27: Who uses Ecosystem Service Valuatio
Page 28 and 29: The Ecosystem Valuation Toolkit: St
Page 31 and 32: IS CALCULATING AN ECOSYSTEM’S VAL
Page 33: Creative Funding Concepts Engage th
Page 37 and 38: ABOUT EARTH ECONOMICS Since 1998, t
Page 39 and 40: Resource Primary Developer Descript
Page 41 and 42: CITATIONS 1 Vitousek, P., Ehrlich,
Page 43 and 44: IMAGE CITATIONS PAGE CITATION PAGE

A Handbook for Understanding Natural Capital - Earth Economics

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