Valuing our Natural Capital for impactful assessment
Natural capital assessments ascribe a value to the services and benefits of the natural environment for better integration into decision-making processes.
Nature provides the basic goods and services that make human life possible: the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicine. The natural world also provides less visible services such as climate regulation, the natural flood defences provided by forests, removal of air pollutants by vegetation, and the pollination of crops by insects. Then there’s the inspiration we take from wildlife and the natural environment.
Attributing a valuation to our natural capital assets, including the quality of those assets and the flows of services, can help us to think logically about what aspects of the natural world we are measuring and how they impact on people.
Natural capital assets are the things that persist long-term such as a mountain or a fish population. From those assets people receive a flow of services such as recreational hikes on the mountain and fish captured for consumption. The flow of service may be dependent on the quality or other attributes of those assets. This relationship may differ, depending on the type of service. Finally, we can value the benefit to society of those services by estimating what the hikers spent to enable them to walk over the mountain or the profit to the fishermen of bringing the fish into the market. Applying this logic consistently across assets and services enables us to start building accounts of the value provided by nature.
The benefits we receive from nature are predominantly hidden, partial or missing from the nation’s balance sheet. However, by recognising nature as a form of capital and developing accounts of natural capital’s contribution to our wellbeing, decision makers can better include the environment in their plans to allocate resources to develop and maintain the economy.
The development of natural capital accounts has been flagged by the Natural Capital Committee and the UK National Ecosystem Assessment as a fundamental activity that is necessary if natural capital is to be mainstreamed in decision-making.
Through ERAMMP Welsh natural capital accounting is taking place. See the reports below for more information.