Trends Natural capital 1/4
Renewable by nature:
Ensuring resources for
today and tomorrow
This month, the Natural Capital Committee is due to publish its first
annual report. The Alliance for Beverage Cartons and the Environment
(ACE) UK ceo Richard Hands considers the concept of natural capital
and the value business should be placing on it
Created to ensure that government has
a better-informed understanding of the
value of natural capital, and reporting to
the Economic Affairs Committee (chaired
by the Chancellor of the Exchequer),
the Natural Capital Committee has the
opportunity to truly influence the economic policy of the UK for the good of
the natural environment.
But what is natural capital? Natural capital refers to the indispensable resources
which occur naturally in our ecosystem.
These are critical for human survival,
and there are four basic categories which
are generally recognised: air, water, land
(including soil, space and landscape) and
habitats (including ecosystems, flora and
fauna).
From this, the model of natural capital
accounting has developed, which places
a monetary value on our environmental
resources. As an alternative to the traditional production-focused GDP, natural capital accounting values natural
resources as accurately as possible so
that the costs and benefits of conserving
or destroying them can be included in
national accounts.
This system of accounting acknowledges the value natural assets bring to peo-
