Natural Capital

Common Thistle C Susanna Bird

What is Natural Capital?

Natural Capital can be defined as the stocks of natural assets which include geology, soil, air, water and all living things.

Source: World Forum on Natural Capital

It is from this Natural Capital that humans derive a wide range of services, often called ecosystem services, which make human life possible. The value of Scotland’s natural capital to sectors like tourism, food and drink, and to society as a whole is huge. 

The most obvious ecosystem services include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible ecosystem services such as the climate regulation and natural flood defences provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects. Even less visible are cultural ecosystem services such as the inspiration we take from wildlife and the natural environment
 

Why is Natural Capital an issue?

With financial capital, when we spend too much we run up debt, which if left unchecked can eventually result in bankruptcy. With Natural Capital, when we draw down too much stock from our natural environment we also run up a debt which needs to be paid back, for example by replanting clear-cut forests, or allowing aquifers to replenish themselves after we have abstracted water. If we keep drawing down stocks of Natural Capital without allowing or encouraging nature to recover, we run the risk of local, regional or nationwide ecosystem collapse.

"protecting and enhancing our stock of natural capital… is fundamental to a healthy and resilient economy."

Source: Scotland's Economic Strategy (2015)

Poorly managed Natural Capital therefore becomes not only an ecological liability, but a social and economic liability too. Working against nature by overexploiting Natural Capital can be catastrophic not just in terms of biodiversity loss, but also catastrophic for humans as ecosystem productivity and resilience decline over time and some regions become more prone to extreme events such as floods and droughts. Ultimately, this makes it more difficult for human communities to sustain themselves, particularly in already stressed ecosystems, potentially leading to starvation, conflict over resource scarcity and displacement of populations.
 

Is Natural Capital really valuable in financial terms?

Ultimately, nature is priceless. However it is not valueless and there are now many studies around the world which have tried to calculate Natural Capital in financial terms. In Scotland for example it is calculated that invasive non-native species through impacts such as damage to forestry, crops and infrastructure cost as much as £200 million per year to the Scottish economy1, or that insect pollination is worth at least £43 million a year to Scotland’s agricultural output2Research by academics has estimated that overall the benefits from nature which can be valued are worth between £21.5 to £23 billion per year to Scotland’s economy3.

From tourism to the whisky industry, across all sectors of the economy and society, Scotland relies on its natural capital. Protecting and enhancing our stocks of natural capital is increasingly being recognised as an issue that requires attention from all sectors of society.
 

Why join the Scottish Forum on Natural Capital?

The Scottish Forum on Natural Capital will enable businesses and policy makers to make informed decisions about their impact on the environment, to assess the financial and other benefits they obtain from Scotland’s natural capital, and to make a concerted effort to protect it.

Membership of the Scottish Forum does not require a financial contribution and is open to organisations that would like to contribute to achieving the Scottish Forum’s vision, whether they are from businesses, NGOs, public bodies or community groups.

Click here to download an at a glance briefing of Natural Capital and the Scottish Forum.

Click here to find resources for communicating Natural Capital within your organisation and network.

1. http://www.gov.scot/Publications/2012/07/5241/4
2. http://scottishwildlifetrust.org.uk/docs/002__057__publications__policies__Briefing_on_Neonicotinoids___
Oct_2012__1350310904.pdf 
3. http://www.gov.scot/Publications/2012/07/5241/4