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Natural Capital

What can governments do to stimulate other sectors and parties?

To further support the mainstreaming of natural capital, a mix of instruments is available to governments on different levels. These range from supporting measures, such as Payments for Ecoystem Services, to binding legislation. For more information, see the Natural Capital Netherlands website (in Dutch).

Available solutions (conclusions by TEEB)

To mainstream natural capital in the decision making of companies, governments and financial institutions, five instruments for governments are available:

  1. Rewarding benefits through payments and markets: for instance, payments for ecosystem services (PES schemes), product certification, green public procurement, standards, and labeling;
  2. Reforming environmentally harmful subsidies: reforming subsidies that are inefficient, outdated or harmful; for instance, up to a third of global subsidies worth US$ 1 trillion stimulate the production and consumption of fossil fuels;
  3. Addressing losses through regulation and pricing: establishing tried and tested regulatory frameworks and liability regimes, linked to pricing and compensation mechanisms, based on the ‘polluter pays’ principle;
  4. Adding value through protected areas: increasing coverage and funding for protected areas; and
  5. Investing in ecological infrastructure: investing in nature based solutions can provide cost-effective opportunities to meet policy objectives.

TEEB (2009), p. 4-5.

Specific instruments falling in these five categories are also mentioned in Taskforce Biodiversiteit (2010) (in Dutch), as well as CE Delft (2011). Tax reform is described in The Ex’tax Project (2014).

Atlas Natural Capital

The Atlas of Natural Capital of the Netherlands contains freely accessible maps with supporting data (downloadable by the end of 2015) on Dutch ecosystems and the services that they provide. The Atlas Natural Capital helps a.o. local governments to support enhanced decision-making and licensing.

See also “What is the value of natural capital in the Netherlands?” (under the heading “Atlas Natural Capital”). 

More information can be found on the website of the Atlas Natural Capital.

Removing barriers

To further support the integration of natural capital in the economic system, a government can take a number of steps, among others by setting the conditions for voluntary processes of change towards sustainability, to kick-start innovation policy, and to initiate the settling costs and benefits.

PBL (2014), p. 20-24. (in Dutch)


Next to regulatory changes, there are a number of policy instruments that can be of assistance in integrating natural capital. Most important are the EIAs, the SIAs and the SEAs. These instruments help in mapping the consequences of biodiversity loss and climate change in a regional context.

European Parliament (2012), p. 6.

Payments for ecosystem services (PES)

Also known as ‘payments for environmental services’, PES are incentives offered to farmers or landowners in exchange for managing their land to provide some sort of ecological service. One reason for these PES systems is that many ecosystem services are not traded on a market, thereby lacking a pricing mechanism. Another key reason is that payment causes the benefit to occur where it would not have otherwise. For instance, Dutch water authority De Stichtse Rijnlanden pays farmers five to seven euros per m2 for widening ditches. The water authority aims to stimulate farmers to create more water storage, easing their water management task.

UNEP (2008).

Deltares (2013b). (in Dutch)

Consortium Ecosysteemdiensten (2012). (in Dutch)