Topic 3.2

Natural Capital

Natural Capital• The resources available for exploitation by humans• These exist in the biosphere, the lithosphere and the

atmosphere• Some natural capital is renewable and replenishable and

therefore in theory can be exploited indefinitely• However, other types of natural capital are non-renewable• Natural capital produces natural income in the form of

goods and services– Goods are marketable commodities such as timber and grain– Services are functions such as flood protection, climate

stabilisation and maintenance of soil fertility

http://www.youtube.com/watch?v=mWOAj7YNLq4

Natural Capital• Renewable

– Living things and ecosystems that can be replaced by natural productivity (photosynthesis) as quickly as they are used up (yield = productivity); e.g. timber, food crops

• Replenishable– Non-living resources which are continually replaced by natural

processes. They depend on abiotic processes for replenishment; e.g. solar energy, geothermal energy, ozone, water

• Non-renewable– Natural resources which cannot be replaced (at least on a

timescale close to that at which they are used). They include fossil fuels and minerals; e.g. fossil fuels, nuclear energy sources, helium

Natural Capital

PRODUCERS CONSUMERS

THE ENVIRONMENT

Waste for recycling

Natural capital (including non-renewables)

Natural income (goods and services)

Financial gain

Non-renewable Natural Capital

• These are not renewable or replenishable and therefore will eventually run out

• It is not yet clear how long the Earth’s fossil fuels will last (new discoveries are being made and new methods of exploitation are being developed)

• It is clear there is a need to minimise use, minimise waste, recycle, reuse and replace fossil fuels

http://www.youtube.com/watch?v=7FSklijcPHghttp://www.youtube.com/watch?v=jsV_3yBDXXI

Environmental Philosophies• Technocentric

– A view that shortages of natural capital will always be overcome by advances in technology

– Tends to predominate in MEDCs (where people are more remote from nature)

• Ecocentric– A view that shortages in natural capital are best approached

by limiting the use of non-renewable resources and switching to renewables

– Tends to predominate in LEDCs (where people are in closer contact with nature)

The Dynamic Nature of Natural Capital• The value and status of natural capital changes over

time (it is dynamic)• As new technologies are developed, resources which

once had little value may become valuable commodities (e.g. before the advent of the combustion engine oil (bitumen) was used primarily only as waterproofing for houses and boats; before the nuclear age uranium was not seen as having value)

• Conversely, as old technologies are superseded, resources may also lose their value (e.g. flint used to make stone axes was superseded when metal tools were developed)

The Intrinsic Value of Natural Capital• Economic value

– The monetary value gained by producers and paid by consumers

• Ecological value– Services provided by nature independently of economic

value (e.g. prevention of soil erosion, carbon sequestration and oxygen production by photosynthesis, nitrogen fixation)

• Aesthetic value– The appreciation of the beauty of nature

• Recreational value– Holiday destinations and places to relax or use for sports etc.

http://edroness.blogspot.mx/2013/10/putting-value-on-nature.html

The Intrinsic Value of Natural Capital• Consumptive use

– Harvesting (timber, crops, animals, medicines etc.)• Non-consumptive use

– Recreational use and cultural activities• Indirect use

– Benefits provided by the ecosystem itself (water filtration, prevention of erosion etc.)

• Optional use– Potential future use – by your generation (option value), or future

generations (bequest value)• Non-use (existence use)

– Aesthetic valueThere is a lot of debate about how we can find ways to give value to nature. You could argue it is actually impossible

http://www.youtube.com/watch?v=2zuJdY_Wrng

Sustainability

• The rate at which replenishable and renewable natural capital may be exploited to allow regeneration

• Long-term harvesting or release of pollution should not exceed rates of natural capital regeneration

• During processing to produce goods, sustainability should be applied at each level of the supply chain

http://www.youtube.com/watch?v=bmnWIOgc39k

http://www.youtube.com/watch?v=_5r4loXPyx8

Sustainability

• Sustainable Development– ‘Development that meets the needs of the present without

compromising the ability of future generations to meet their own needs’ (UN World Commission on Environment and Development)

• This concept incorporates economic and social factors together with time

• The problem is your idea of what sustainable development is changes with your viewpoint. An economist’s idea of it would be different to an environmentalist’s (some might actually argue that sustainability and development are actually contradictions in terms)

Sustainability• Not-possible?

– People are not prepared to accept a reduction in their standard of living– Non-renewable resources are running out– LEDCs are home to 80% of the world’s population and are using

increasing amounts of natural capital– The oil lobby is very powerful (especially in the U.S.)– Some problems are local in nature while others are global

• Possible?– Use of renewable resources is increasing– Renewable technologies are become cheaper and more accepted– We may have no choice in the future but to embrace an economy based

on renewable and replenishable resources The choices we make are largely dependent on our environmental philosophies

UN Sustainability Summits• Stockholm Summit, 1972

– Considered threats to habitats and species and set targets for protection of natural resources. UNEP was established.

• Rio Earth Summit, 1992 (Agenda 21)– Centred on the conservation of biodiversity. Agenda 21 set

targets for sustainable development in the 21st Century

• Kyoto Summit, 1997– Set targets for the reduction of greenhouse gas emissions

and the introduction of renewable energy sources (by 2012). Ultimately this was postponed at the Dohar Summit (2012)

• Johannesburg Summit, 2002– Largely considered the obstacles to sustainable

development posed by global poverty, together with social issues and access to safe drinking water and sanitation

Calculations• Sustainable yield (SY) is calculated as a rate of increase of

natural capital that can be achieved without depleting the original stock

SY = annual growth and recruitment - annual death and emigration

• Maximum sustainable yield (MSY) is the largest harvest that can be taken from a stock over an indefinite period without decreasing the population. MSY does not occur at the carrying capacity, but at the point at which population is growing at its fastest rate

Calculations• MSY occurs at the point where population is

increasing at its maximum rate

Carrying capacity

MSY

Above MSY, yield is reduced by competition for resources

Below MSY, yield is decreased due to the small population

Questions

1. Define the term Natural Capital2. Define the terms Renewable, Replenishable

and Non-renewable3. Explain why resources can be considered to be

dynamic in nature4. Discuss the concept of sustainable

development5. Discuss two opposing environmental

philosophies