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Archive for the ‘Natural Capital’ Category

Natural Capital and Ecosystem Services are provided to us free by nature and contribute invisible or unaccounted for economic value to our global economy, including such simple things as clean air, clean water and the ability to grow crops.

Inspired by the 2006 Stern Review for Climate Change, the TEEB (The Economics of Ecosystems and Biodiversity) initiative, a G8+5 commissioned project, has taken on the challenge to draw attention to the economic benefits of biodiversity, and highlight the growing cost of biodiversity loss and ecosystem degradation.

TEEB provides guidance to important policy makers, national governments, local governments and regional decision makers, to help them internalise the value of nature in proper policy making frameworks, in order to properly account for these valuable services.

The top 3,000 businesses are estimated to have externalities of almost $2.1 trillion, which is equivalent to 3.5% of global GDP, every year. These significant externalities can be described as third party (or external) effects arising from the production and/or consumption of goods and services, for which no appropriate compensation is paid.

It is believed that accounting for these externalities and our preciously-limited Natural Capital now, will result in significant cost savings in the future. If we continue our current consumption levels of these valuable services, without accounting for them, the cost of replicating them once they have been exhausted, is almost incalculable.

To find out more, see this video where the TEEB Study Leader and UNEP (United Nations Environment Programme) Special Adviser introduces and explains the project.

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WAVES Natural Capital Accounting Logo

This is an initiative of the World Bank that recognises the value of the planet’s natural resources. Natural Capital Accounting basically means incorporating a country’s natural wealth into its national accounts. In simple words, traditional economic indicators, like GDP, account for how much money a country is making without considering how its natural capital stocks have been affected or lost.

With this project, the World Bank wants to stress the important role played by natural capital assets on the socioeconomic development of nations. The project idea aims to encourage sustainability and avoid the depletion of these vital natural resources, like clean air and water, forests, minerals and other goods and services provided by the environment.

At the 2012 Rio+ 20, the latest United Nations Conference on Sustainable Development, in Brazil, the World Bank started a discussion on a Natural Capital Accounting project implementation and its potential advantages to the planet and the next generations. By the end of the conference, 55 countries and 86 private companies committed to move forward to protect their natural wealth.

Despite the fact that this project appears to be beneficial to everyone, this idea does not seem to be unanimous. Those who speak out against it say that businesses would not profit as much as they do nowadays if environmental costs were fully integrated. However, what is the point of using up those natural assets now and not having them available later?

The most environment-impacting industries, such as the coal power generation and the cattle ranching and farming, cause substantial damage to nature and make use of exhaustible and generally non-renewable resources, which may become exhausted if not sustainably managed. As our well-being is directly affected by the ecosystems’, it suggests, therefore, it is time to take action.

The Great Barrier Reef case

This video, by the World Bank, explains how Australia is using Natural Capital Accounting to manage the Great Barrier Reef, the world’s largest coral reef system, particularly threatened by human activities and the consequences of climate change.

Let us know what you think about Natural Capital Accounting. Share it with us in the comment section below.

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The environment is the primary source of the humans needs. Mother Nature provides us with goods and services that play a key role in the development of our society.

The earth’s stock of resources and its natural regulating mechanisms are what we call Natural Capital Assets.

This priceless legacy must be sustainably used in order to guarantee that it will be available for us and for the future generations. In fact, there is a direct survival link between humans and nature.

This video is an encouragement for us to rethink our systems and concepts of growth and give value to these Natural Capital Assets freely given to us.

How much is nature worth to you?

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