Some notes about Natural Capital

Natural capital is an idea whose time has come. It takes the analysis of the environment to a new level - way beyond the conventional sustainability and sustainable development approaches which have dominated in the last couple of decades.

The reasons why natural capital is the way to think about the great environmental challenges we face is because of three characteristics. Natural capital is all about assets – the assets nature provides us with for free; it forces us to see the environment as a (or indeed the) key input into the economy – ending the apartheid between economic growth and protecting and enhancing the environment; and by focussing on capital maintenance, it makes a clear distinction between renewable and non-renewable assets.

The damage to the natural environment accelerated during the twentieth century, and now is already reducing economic growth and development. The threat of climate change is widely understood. Perhaps less so is the destruction of biodiversity and ecosystems – from the loss of the great rainforests to the declines of wild flowers, insects, birds and mammals. As these disappear this century, we will come to realise what we have lost, and how much of our economic well-being depends upon a flourishing natural environment.

To stop the rot, we need to keep the aggregate of natural capital from falling further. Indeed it needs to be improved. Not everything can be preserved, but what is damaged should be compensated for with gains elsewhere. Natural capital needs to be maintained and enhanced. For non-renewables – natural capital that can only be used once (such as oil, gas and minerals) –is a matter of which generation uses it. But when it is depleted there needs to be compensation, and the surplus revenues should be used to protect and enhance renewables  - the natural capital model just keeps on giving, provide we do not deplete it below the critical thresholds.

Natural Capital

Natural Capital
Environment

Natural Capital
Water

Latest Publication

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Water Boarding

February 14, 2018

Water Publication

The water industry is in play - with the regulators, and with the politicians. Labour proposes to renationalise the water companies, and the government and the regulators are determined to toughen up the regulation to show that privatisation works for...

Publications

  • Publication Environment Pros and Cons
    May 1, 2008

    Article for Green Alliance magazine. The environment is conventionally regarded as a public good...
  • Presentation Water Water Regulation: is it fit for purpose?
    October 23, 2006

    Presentation slides
  • Publication Environment House of Commons Environmental Audit Committee Evidence
    November 16, 2005

    This memorandum focuses on three issues: the supply/demand balance in the energy sector; the linkage between security of supply, investment and the climate change objectives; and the energy policy framework required to promote low carbon technologies. In
  • Publication Water Water, the Environment and Regulation: Changing Functions, Changing Framework
    February 20, 2005

    The objectives in privatising the water industry were multiple. The then Conservative government considered that the private sector was inherently more efficient than the public sector, that share ownership could be widened and deepened by selling monopol
  • Publication Water Water: The Periodic Review 2004 and the Environmental Programme
    February 13, 2004

    Memorandum of Evidence submitted to the House of Commons Environmental Audit Committee. The periodic review of the water industry sets prices for the next five years. These prices should produce sufficient revenues to finance the functions of the water co
  • Publication Water Water Prices: Memorandum to House of Commons Environment, Food and Rural Affairs Committee
    October 17, 2003

    The water periodic review currently under way has raised substantive issues about the nature of the regulatory regime, as well as the appropriateness of proposed price increases, and its impact on current and future customers. This memorandum summarises t
  • Publication Water Whither Water Regulation?
    August 1, 2003

    In D.R.Helm (ed.), Water, Sustainability and Regulation, published by The Oxera Press, August 2003, pp. 1-12. As the water industry and its regulators prepare for the next round of price setting, there is an opportunity to set out a stable regulatory regi
  • Publication Water Water, Sustainability and Regulation
    August 1, 2003

    Edited by Dieter Helm, published August 2003 by The Oxera Press. This volume, published in the early stages of preparation for the 2004 water periodic review, contains contributions from political and regulatory representatives, industry experts and the c
  • Publication Environment DEFRA Sustainable Development Task Force: Comments on Priorities and Targets
    July 18, 2003

    Sustainable development has three principal components: environmental, social and economic growth. Targets and priorities are only comprehensible if they are related to objectives, and therefore the trade-offs between the three parts need to be defined.
  • Publication Environment Foreword: The Environment Agency
    May 23, 2003

    Foreword to publication by The Environment Agency. Over the last two decades, the case for using market-based economic instruments in environmental policy has gradually been won. Few policy makers now oppose such instruments in principle. The debate has m

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