3.2 – Resources – Natural Capital

With thanks to clip art!

Natural Capital and Natural Income• Ecologically minded economists describe resources as

“natural capital”. If properly managed, renewable and replenishable resources are forms of wealth that can produce “natural income” indefinitely in the form of valuable goods and services.

• This income may consist of marketable commodities such as timber and grain (goods) or may be in the form of ecological services such as the flood and erosion protection provided by forests (services). Similarly, non-renewable resources can be considered in parallel to those forms of economic capital that cannot generate wealth without liquidation of the estate.

There are three broad classes of natural capital:1. Renewable natural capital, such as

living species and ecosystems, is self-producing and self-maintaining and uses solar energy and photosynthesis. This natural capital can yield marketable goods such as wood fibre, but may also provide unaccounted essential services when left in place, for example, climate regulation.

2. Replenishable natural capital, such as groundwater and the ozone layer, is nonliving but is also often dependent on the solar “engine” for renewal.

3. Non-renewable (except on a geological timescale) forms of natural capital, such as fossil fuel and minerals, are analogous to inventories: any use implies liquidating part of the stock.

Recycle – or Die?

• What can be recycled?• Find out how much

energy it takes to make one aluminium can from scratch (Bauxite is aluminium ore)….

• Comparatively how much energy does it take to make it from recycled materials?

Task……..The Vogon’s are coming from outer space to make an intergalactic highway* and are about to destroy stuff on our planet. They will allow us to keep 6 areas from the following list but will destroy the rest, you have to decide which ones and be able to rationalise why…. (List what criteria you used to decide!)

Your HouseISManilaYour home cityCentral ParkTokyoThe Great Barrier ReefAntarcticaThe Sahara

Lago D’oro SwampThe tundra CanadaLake VictoriaParisThe Amazon RainforestThe Vatican and RomeMeccaSan Francisco

*Douglas Adams – Hitchhikers guide to the Galaxy

Explain the dynamic nature of theconcept of a resource.

• What is a resource and what is it’s value?This will vary depending upon who you ask and

even when you ask…… Eg. Think how resources might be valued…

A) Economic valueB) Ecological valueC) Technological valueD) Scientific valueE) Intrinsic value (cultural, aesthetic, spiritual)

What about variation of resource value with time?

• Think about flint…..Used to be valuable as arrow

heads and hand axes.Now it is used in lighters to make

sparks!

Organisms or ecosystems that are valued on aesthetic or intrinsic grounds may not provide commodities identifiable as either goods or services, and so remain un-priced or under-valued from an economic viewpoint.

IBO Environmental Systems and Societies Syllabus document (IBO 2007)

• Organisms or ecosystems regarded as having intrinsic value, for instance from an ethical, spiritual or philosophical perspective, are valued regardless of their potential use to humans. Therefore, diverse perspectives may underlie the evaluation of natural capital.

IBO Environmental Systems and Societies Syllabus document (IBO 2007)

Attempts are being made to acknowledge diverse valuations of nature (for example, biodiversity, rate of depletion of natural resources) so that they may be weighed more rigorously against more common economic values (for example, gross national product (GNP)).

IBO Environmental Systems and Societies Syllabus document (IBO 2007)

Find out which UN body is responsible for creating consensus of value?UNEPWhen was it created?1972

• However, some argue that these valuations are impossible to quantify and price realistically. Not surprisingly, much of the sustainability debate centers on the problem of how to weigh conflicting values in our treatment of natural capital.

IBO Environmental Systems and Societies Syllabus document (IBO 2007)

Sustainability• Definition:

Use of global resources at a rate that allows natural regeneration and minimizes damage to the environment. For example, a system of harvesting renewable resources at a rate that will be replaced by natural growth might be considered to demonstrate sustainability.

IBO Environmental Systems and Societies Syllabus document (IBO 2007)

Any society that supports itself in part by depleting essential forms of natural capital is unsustainable. If human well-being is dependent on the goods and services provided by certain forms of natural capital, then long-term harvest (or pollution) rates should not exceed rates of capital renewal (or pollution breakdown). Sustainability means living, within the means of nature, on the “interest” or sustainable income generated by natural capital.

• We do not inherit the world from our ancestors but borrow it from our children!

Native American proverb

Sustainable development• The term “sustainable development” was first used in

1987 in Our Common Future (The Brundtland Report) and was defined as “development that meets current needs without compromising the ability of future generations to meet their own needs.”

But some economists may view sustainable development as a stable annual return on investment regardless of the environmental impact, whereas some environmentalists may view it as a stable return without environmental degradation.

IBO Environmental Systems and Societies Syllabus document (IBO 2007)

Consider the development of changing attitudes to sustainability and economic growth, since the Rio Earth Summit (June 1992)

leading to Agenda 21.Five years after the Brundtland Report, the United Nations Conference on Environment and Development (UNCED) or

Rio Earth Summit as it became known, was the largest environmental conference ever held. The objectives of the

conference were to build upon the Brundtland Report by creating major treaties on biodiversity, climate change and forest

management. This was a more nature-centred approach towards environmental problems than before. Despite its

environmental focus, the biggest arguments at the Earth Summit concerned finance, consumption rates and population

growth.

The MEDCs called for environmental sustainability, but LEDCs demanded a chance to allow their economies to catch up

with the developed world.

The Earth Summit produced:Convention on Biological Diversity; Framework Convention on Climate Change;

Principles of Forest Management;

Rio Declaration on Environment and Development; and Agenda 21.

Together these outcomes covered every aspect of sustainable development. Legislation was passed and many

agreements made, committing nations, including the UK, to become more sustainable. These agreements and guidelines

are still adhered to today and are influencing many political and business decisions.

http://www.sustainable-environment.org.uk/Action/Earth_Summit.php

Agenda 21• Agenda 21, is the blueprint for sustainability in the 21st century. It is a commitment to sustainable

development, as agreed by many of the world's governments. • Nations that have pledged to take part in Agenda 21 are monitored by the International Commission on Sustainable Development, and

are encouraged to promote Agenda 21 at the local and regional levels within their own countries. • Agenda 21 addresses the development of societies and economies by focusing on the conservation and preservation of the

environments and natural resources. • The Conventions, Principles and Declarations of the Earth Summit, provide guidelines to deal with the problems of poverty, hunger,

resource consumption and the deterioration of ecosystems. Agenda 21 provides a format for this to happen, detailing an action plan for sustainable development and establishing targets for actions that combine economic development and environmental protection.

• Agenda 21:– Provides options for combating the deterioration of land, air and water, whilst conserving habitats and their diversity. – Deals with poverty, over consumption, health and education. – Promotes roles for all. Everyone – governments, business, trade unions, scientists, teachers, indigenous people and youth – have

roles to play in achieving sustainable development and should be involved in the decision making processes. – Encourages the reduction of environmentally and socially detrimental processes, but within a framework which allows economic

success.• Presently a nation’s wealth is gauged by its financial standing, and the more money the better. Agenda 21 promotes the attitude that a

nation’s wealth should also account for the full value of its natural resources. Agenda 21 also encourages nations to consider the costs of environmental degradation. In addition, to reduce the risk of damage, environmental assessments should be carried out and where degradation does occur, those responsible should bear the costs.

• Agenda 21 highlights the need to eradicate poverty. One of the major problems facing poorer nations is their lack of resources and ability to live sustainably. Developed nations have taken on the responsibilities of assisting poorer nations to reduce their environmental impacts and achieve sustainable development.

• Agenda 21 asks governments to integrate sustainable development into their national strategies and highlights the importance of involving non-governmental organisations (NGOs) and the public in the process. For sustainable development to work, issues must be tackled on a local, national and international level and nations must work ‘towards international agreements which respect the interests of all and protect the integrity of the global environmental and developmental system.’

http://www.sustainable-environment.org.uk/Action/Agenda_21.php

Ecological footprints• Task:What is an ecological footprint?What is a carbon footprint?

Go to www.earthday.net/footprint/

Work out your ecological footprint. Compare it with an Americans and an Tanzanians.

What can you do to reduce it?

Sustainable yields• Sustainable yield (SY) may be calculated as the rate of

increase in natural capital, that is, that which can be exploited without depleting the original stock or its potential for replenishment. For example, the annual sustainable yield for a given crop may be estimated simply as the annual gain in biomass or energy through growth and recruitment.

• A type of development which ....................... resources for future generations.

• ............................. people’s standard of living• Doesn’t ......................... the environment• Aims to ..........................basic needs rather

than large scale developments• ............................. waste• ……………………..efficiency and recycling

increases reduces destroy satisfy

safeguardsincreases

Sustainability and natural capital and natural income

To be sustainable we must do what to these:

1. Natural capital2. Natural income3. Degradation

1. Ensure natural capital is not used up2. Only use the natural income (or less than it)3. Ensure resources are not degraded

Sustainable development:

What would be sustainable ideas for: Energy sources:Agricultural practices:Transport:Population:Waste:Tourism:

7.1.4: OUTLINE KEY HISTORICAL INFLUENCES ON THE DEVELOPMENT OF THE MODERN DAY ENVIRONMENTAL MOVEMENT

Say which is which: People, book, film, report, events, disasters, groups, conferences…

Timeline:1864: “Man and Nature”1930s: Dustbowl, USA1956: Minamata1961: WWF1962:”Silent Spring:1984: Union Carbide1971: Greenpeace/Friends of the Earth1970s: Nature has an intrinsic value philosophy/ we are stewards of the Earth not here to exploit it1972: “Limits to growth”1972: Stockholm Conference1975: CITES1979: Gaia1985: Antarctica scientists1986: Chernobyl1987: “Our Common Future”1987: Montreal Protocol1988: IPCC1992: Rio Summit, Agenda 211990s: Ecofriendly people, holidays, products2005: Kyoto protocol2006: “An Inconvenient Truth”2009: 20-20-20

When did sustainability really come about?

Sustainable yieldSY is the increase in natural incomeSo - At the beginning of the year there are 10 cows. At the end of the

year there are 12 cows. SY = 2 cows

January 1000 kg of biomass in a wheat fieldJuly 3000 kg of biomass. SY =

If you kill more than 2 cows or take more than 2000kg of wheat – then you are destroying the natural capital. This is UNSUSTAINABLE.

It is sometimes dangerous to harvest the maximum SY – just in case something goes wrong e.g. a disease spreads and kills some of the cows.

Safer to harvest the optimal sustainable yield.

Mkomazi Game Reserve, Tanzania

Hunting of elephants allowed.Population 750.In one year researchers counted 60 births and 55 deaths. 10 bulls left the reserve. 15 new elephants arrived.

1. SY: 2. Poachers killed 8 for trophies. Is this sustainable utilisation?