The social dimension of natural capital

Dario Kenner, 28 November 2013

Summary: The first major international conference on natural capital has increased understanding of our dependence on the environment but more research is needed on social issues.

The natural capital idea is still relatively unheard of but is probably on more people’s radars after the first World Forum on Natural Capital was held in Edinburgh last week. Natural capital is broadly understood to mean placing an economic value on nature to recognise its full value. Using the example of a making a shoe, the video below argues that companies need to realise their dependence on “all the value that nature provides for us”, such as rubber, water and forests, and this is why they should invest in natural capital.

At the Nature is not for sale counter-summit, also held in Edinburgh, critics argued that valuing natural capital will not stop environmental degradation and will instead benefit a minority of actors who will trade nature on financial markets. In the “No to biodiversity offsetting” declaration 140 civil society organisations from around the world warned that natural capital could be used as a platform for biodiversity offsetting which they say will encourage “environmental destruction”. These schemes could allow a company to compensate for environmental damage in one area by buying credits based on the preservation of another area of biodiversity.

Backed by the United Nations Environment Program among others, the World Forum on Natural Capital brought together hundreds of people from business, NGOs and academia to highlight how we all depend on nature and so should protect natural capital. From the coverage of the conference on twitter it looks as though a lot of the focus was on making a business case for why natural capital is needed.

While it’s clearly important to highlight the private (and public) sector’s reliance on a healthy environment, there are other areas of the natural capital concept that still need to be comprehensively researched. One of these areas is thinking through the social implications of implementing natural capital projects around the world, particularly in developing countries where there is sometimes weak governance and less respect for rights (human and land).

Organisations have already made the point that the poorest peoples in developing countries depend on the environment for their incomes and livelihoods. The 2010 Economics of Ecosystems and Biodiversity (TEEB) report finds: “sustainable management of natural capital is a key element to achieving poverty reduction objectives as reflected in the Millennium Development Goals”.

(A women harvests leaves from Gnetum (okok) in village of Minwoho, Ewodioula, Cameroon. Credit: Ollivier Girard for CIFOR)

Communities depend on their local environment for their livelihoods. This is particularly the case for rural communities in the global south (A women harvests leaves from Gnetum (okok) in Minwoho village, Cameroon. Credit: Ollivier Girard for CIFOR)

For proponents of valuing nature ecosystem services such as water purification and crop pollination are the basis of natural capital. The Ecosystems Services for Poverty Alleviation (ESPA) project is looking at how ecosystems are managed in developing countries in a sustainable way “that contributes to poverty alleviation as well as to inclusive and sustainable growth”. There appear to be examples where communities are benefiting from this approach. Given there are many similar projects already happening (or being planed) it will be interesting to see what the outcome is of ESPA’s conference last week in London that looked at who the winners and losers are of ecosystem services projects. This builds on a 2012 workshop, which covered areas such as definitions of poverty and the trade-offs that occur between stakeholders with different resource interests, access and power.

If natural capital projects are set up across the world, briefings such as Land grabbing: is conservation part of the problem or the solution? published by the International Institute for Environment and Development (IIED) in September could provide useful research questions into the social dimensions of natural capital. The briefing highlights that land grabbing* is increasing in Africa, Asia and Latin America, and that sometimes this is for ‘green’ purposes such as biodiversity conservation, biofuels, carbon offsets and REDD (Reducing Emissions from Deforestation and Forest Degradation).

IIED finds that the areas where this is happening are the ‘global ‘commons’ including “much of the world’s forests, wetlands and rangelands” which support “up to two billion mostly poor and rural people”. In response to this ‘green grabbing’ trend the Global Forest Coalition released a guide earlier this year for communities, to help them understand how REDD and biomass projects could negatively affect their rights and access to land.

Last week’s summits in Edinburgh showcased natural capital’s rising profile and demonstrated that it’s a heavily contested concept. The research referred to in this blog shows that there is a need to discuss the practical consequences of implementing natural capital projects in addition to purely technical discussions on how to measure nature’s value.


* Land grabbing is defined as land acquisitions that violate human rights and lack transparent contracts and meaningful participation.

More from the Why Green Economy? blog

(Threat to Democracy, slash and burn agriculture in the Amazon, Flickr creative commons)Will valuing natural capital protect the environment?




(Coal plant, creative commons)Europe’s carbon price crash and future carbon markets



3 Responses to The social dimension of natural capital

  • Jemma says:

    Should we get bogged down in semantics, our principles will become as diluted and fragmented as mainstream environmental and conservation dialogue. The raison d’etre of these terms, certainly in the UK, is to use a familiar language to translate environmental issues into the jargon of economics and markets in order to captivate the necessary audience to embark on a conversation that has more potential to lead to real action. It is not about putting a price on it, but a value. A value which has global recognition for those who utilise the land directly and for those who benefit from it indirectly.
    Having the moral high ground is no longer enough given the urgency of the climate crisis. If we must add up the £££’s of value that every tree provides and write it all up in Excel to prevent them from destroying the last swathes of woodlands and rainforests then I propose we should. And quickly.
    We need to be able to communicate. We need to be able to engage effectively in the global dialogue and build resistance on an equal platform. Yes, we have to move away from Comic Sans and learn to use Excel. Language is a powerful weapon, (ask any politician), but we need to be the translators and we need to begin to wield these literary weapons for our own purposes…

  • Stefan Bonnarens says:

    Shouldn`t we define Natural Capital without a commercial link to Green Economy. For me they are 2 different things. Natural Capital for me is the amount of resources a country has to support a normal climate and brace itself against natural disasters which (not like the natural disasters now) occur sometimes. I am talking about forests, clean water, dunes at the sea, wildlife, clean air,
    This of course is not for sale and is the right of every living being. Natural Capital should stay with the people who live out of it without any interference of industry and so called environemntal organisations whatsoever.

    What can be sold and what Green economy is to me is environmental friendly industry, environmental friendly agriculture, environmental friendly waste disposal, …
    This is where the knowhow of industry and environmental organisations should focus on. We will never have a connection to Mother Nature and thus with what I call natural capital like indigenous people have. What we can do is reconnect to Mother Nature in a Western capitalistic way. Maximize the effect (both environmental and moneywise) of environmental friendly production, agriculture and waste reduction with the smallest effort and cost possible.

  • Why Green Economy Blog says:

    Comment via email from Wally Menne on 2 December 2013:

    “The terms “Natural Capital” and “Green Economy” (among others) have been hi-jacked by organisations such as UNEP, and their corporate allies in order to distort their logical meanings. Both of these expressions have now acquired narrow meanings with commercial connotations that in my view are now being promoted throughout the United Nations system, including by the World Bank, clearly with a view to facilitating the future corporate ownership or control of all things natural.

    The misrepresentation of mono-culture tree plantations as “responsibly managed forests” by the FSC under its ‘forest’ certification scheme is typical of how the dishonest use of words can be used to distort the truth. It was the same kind of convoluted thinking that led to the “landscape approach” being used to justify converting even more natural habitat into tree plantations. Another such euphemism is “biological assets”, used by the South African state-owned company SAFCOL to describe its biologically destructive industrial timber plantations. Its up to all of us to resist this blatant abuse of language by challenging it whenever possible!”

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