THE HARD HEADED CASECASE
The concept of natural capital is gaining increasing acceptance
he unsentimental notion that quantifying the value of nature to the economy is the best way to protect it has received a boost in the form of a new United Nations framework. Announced on 11 March, the new system of ‘ecosystem accounting’ is designed to ensure that ‘natural capital’ is more accurately recognised in economic reporting. The framework, offi cially dubbed the System of Environmental-Economic Accounting – Ecosystem Accounting (SEEA-EA), is designed to improve economic modelling by taking into account the services that ecosystems provide and the benefits they impart for people and local communities. Put simply, it should help to give a value to both the ‘stock’ of nature, such as the extent of forests, wetlands or grasslands, and its ‘flows’ – the benefits that nature provides, such as water purification and carbon sequestration. This, in turn, will allow these contributions to be more easily compared to other goods and services with which we’re familiar, enabling governments and industries to choose the correct course of action when it comes to weighing up conservation, restoration or extraction.
Applying a monetary value to nature has caused some to recoil in the past (we wrote all about this in our November 2018 Dossier). Nevertheless, many heavyweight international organisations, including the UN and the International Union for the Conservation of Nature (IUCN), have long sought to construct an economic toolkit to model the true value of the natural world. ‘Our economic, social and human well-being critically depends on nature,’ said Juha Siikamaki, chief economist at the IUCN. ‘The key contribution that we hope ecosystem accounting can do is to put those contributions from nature at the same level of importance as other economic considerations.’
A forest is a good example. In the economics of old, the value of a forest was calculated based on the timber that could be extracted from it. We now know that’s too reductive: forests sequester carbon and produce oxygen; they collect and filter rainfall, purifying drinking water; they support biodiversity, which can improve the resilience of the forest to climate change and boost populations of pollinating insects; they can contribute to tourism. ‘Using the forest example, the private benefits have traditionally been modelled economically, but the broader benefits that the public enjoys have not been thought about as much,’ says Kelvin Peh, lecturer in conservation science at the University of Southampton. ‘That’s very important, because when we do consider
6 . GEOGRAPHICAL