Natural Capital & Natural Income (HL IB ESS OLD COURSE - IGNORE)
Revision Note
Written by: Alistair Marjot
Reviewed by: Bridgette Barrett
Natural Capital & Natural Income
What is natural capital?
Natural resources are the sources of energy and raw materials that society uses and consumes
In other words, the term natural resources applies to anything that comes from nature that can be used to benefit humans
Examples include:
Sunlight is essential for photosynthesis, solar energy
Air: oxygen for breathing, wind energy
Water: drinking, irrigation, hydroelectric power
Land: soils, agriculture, construction, habitat for wildlife
Rocks: minerals, construction materials
Ecosystems: forests, wetlands and coral reefs
Living things: plants for food and medicine, animals for food and clothing
In the environmental sciences, these resources are sometimes referred to as natural capital
Definition: natural capital is the stock of natural resources available on Earth
Types of natural capital:
Renewable resources are resources that can be replenished naturally
Examples: forests (timber), fish populations
Non-renewable resources are resources that are finite and cannot be replenished
Examples: fossil fuels (coal, oil), minerals (gold, iron ore)
Ecosystem services are the benefits provided by ecosystems that support human life and economic activity
Examples: pollination of crops, water purification, carbon sequestration
What is natural income?
Definition: natural income is the flow of goods and services produced by natural capital
Examples of goods:
Fish: harvested from oceans and rivers
Timber: harvested from forests for building and paper products
Examples of services:
Climate regulation: forests reduce global warming by absorbing CO2
Flood prevention: wetlands reducing flood risk by absorbing excess rainfall, or mangroves buffering against storm surges
Sustainable natural income
If these natural goods and services are carefully and sustainably managed, they can provide even more resources over time
This is referred to as sustainable natural income
For example:
Trees are cut down for timber but forests are also re-planted or left to recover
The rate of new tree growth is greater than the rate of timber production
Timber production is a sustainable source of income that can be marketed and used to benefit humans
In other words, natural income is the term used to describe the sustainable income produced by natural capital
Again, using the timber production example:
Our forests are the natural capital
The sustainable timber we can obtain from these forests is our natural income
Non-renewable resources, such as fossil fuels, can be used to generate wealth but can only be used once and cannot be sustainably managed
Therefore, even if they can be considered as natural capital, non-renewable resources cannot produce sustainable natural income
Perspectives on nature
Economic value:
Viewing nature as natural capital highlights the economic value of resources
Encourages investment in their preservation and sustainable use
It helps policymakers and businesses recognise financial benefits of maintaining healthy ecosystems
Sustainable management:
Emphasising natural capital and natural income encourages sustainable management practices
By valuing natural resources as capital, societies are more likely to invest in conservation efforts
Ensures a continuous flow of natural resources, such as clean water, air and fertile soil
Anthropocentrism:
This perspective may imply that nature exists solely for human use and exploitation
This is an extreme anthropocentric view
It suggests that the environment's primary purpose is to serve human needs and economic interests
Leads to over-exploitation and degradation of natural resources
Intrinsic value:
Some argue that this anthropocentric view reduces nature's intrinsic value
I.e. it ignores the inherent worth of ecosystems and species beyond their use to humans
Examiner Tips and Tricks
The terms natural capital and natural income are very easy to confuse. If you are finding this concept tricky, try to remember the following analogy: money in a bank (sometimes referred to as capital) may gain interest over time if it is carefully managed. Natural income is effectively the interest that humans can live off and benefit from, if natural capital is sustainably managed!
Ecosystem Services
Definition: benefits provided by ecosystems that support life and human well-being
Ecosystem services usually fall into one of four main categories:
Supporting services
Regulating services
Provisioning services
Cultural services
Ecosystem Service | Description | Examples |
|---|---|---|
Supporting | Essential ecological processes for supporting life | Primary productivity (photosynthesis) Soil formation Cycling of nutrients (e.g. carbon cycle, nitrogen cycle) |
Regulating | A diverse set of services that shape and stabilise ecosystems | Climate regulation Flood regulation Water quality regulation Air quality regulation Erosion control Disease and pest control |
Provisioning | The goods humans obtain from ecosystems | Food Fibres Fuel Fresh water Timber |
Cultural | These services derive from humans interacting with nature in a culturally beneficial way | Recreation and tourism Education Health benefits Sense of place, national identity and cultural heritage Employment |
Examples of Regulating Ecosystem Services
Ecosystem service | Description | Further information | Examples |
|---|---|---|---|
Water replenishment | Natural process of replenishing water in aquifers, rivers and lakes | Provides clean drinking water Supports agriculture and industry | Mountain watersheds—snowmelt and rainfall replenish rivers and groundwater, e.g. glacial meltwater |
Flood and erosion protection | Ecosystems absorb excess rainfall and prevent soil erosion | Wetlands and floodplains reduce flood risks Coastal mangroves and vegetation protect against storm surges | Coastal Mangroves in Southeast Asia protect shorelines and support fisheries Forest tree root networks stabilise soil and prevent erosion on hillsides |
Pollution mitigation | Ecosystems help remove pollutants from the environment | Improves water quality in rivers and lakes | Reed bed buffer zones filter water, removing inorganic nutrients and pollutants Wetlands e.g. saltmarshes, absorb pollution |
Carbon sequestration | Process of capturing and storing atmospheric carbon dioxide | Forests and oceans act as carbon sinks Reduces greenhouse gases, mitigating climate change | Tropical rainforests, e.g. Amazon rainforest is a major carbon sink, regulating global climate Seagrass meadows |
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