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Natural Capital

What is the value of natural capital?

Measuring the value of natural capital is difficult. One important reason was the lack of widely accepted methods for a long period of time. For national governments the statistical standard SEEA-EEA has been developed and adopted (see “Natural Capital Accounting (for governments)”). Companies can also choose from many possibilities (see “Natural Capital Accounting (for business)”). The value of goods and services supplies by ecosystems can run up to US$ 72 trillion annually. Several examples show what this value consists of. 

Value of global natural capital

Each year, our planet’s complex land and water systems produce up to US$ 72 trillion worth of free goods and services essential to a well-functioning global economy. Though measuring the financial value of this infrastructure is not impossible, these benefits are not typically bartered and sold in the marketplace, so their value is exceedingly hard to price on corporate or government financial statements.

UNEP (2010).

A valuable (technical) source on the various types of ecosystem services and the values they provide is: Burkhard, Kandziora, Hou & Müller (2014), p. 15.

Examples

On a large scale mangroves in Thailand have been replaced with shrimp farms, tourist resorts, and urban sprawl. Partially because of the disappearance of these forests, the December 2004 tsunami could cause severe damage. An analysis of all services offered by mangroves yielded an interesting insight: the value of mangroves converted into shrimp farms (adjusted for subsidies) is US$ 1,349 per hectare. But the value that mangroves provide in terms of carbon sequestration, fish habitats, wood and non-wood products and especially coastal protection is US$ 21,546 per hectare.

There are many other examples. Coffee production within one kilometer of a forest is circa 20% higher than at larger distances due to better pollination by wild bees. Protection and restoration of global fish stocks can actually increase the value of fishing industry with US$ 50 billion annually. The benefits of the Natura 2000-network in Scotland are three times as high as the costs.

WAVES (2012), p. 8-9

TEEB (2009), p. 4, 9 & 20.