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Natural capital: assets, systems, and policies

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  • Dieter Helm

Abstract

Natural capital is a concept whose time has come, but is in danger of being greenwashed to suit vested interests, as has happened to sustainability. It is a hard concept based upon assets rather than utility. Natural capital assets provide the foundations for positive freedom, by providing for future generations’ capabilities and choices. This is especially the case for renewable natural capital, which can provide nature’s bounty forever, provided the assets are not driven below critical thresholds. Natural capital assets lend themselves to accounting, to balance sheets, and risk registers, and require capital maintenance. Cost–benefit analysis, being partial and on a project-by-project basis, has a limited role, since the natural environment comes in systems and is less amenable to marginal analysis. Three principles are core to the design of natural capital policies. These are: public goods with public monies; polluter pays; and compensation in the form of net environmental gain.

Suggested Citation

  • Dieter Helm, 2019. "Natural capital: assets, systems, and policies," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 1-13.
    • Handle: RePEc:oup:oxford:v:35:y:2019:i:1:p:1-13.
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    File URL: http://hdl.handle.net/10.1093/oxrep/gry027
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    References listed on IDEAS

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    8. Dasgupta, Partha, 1986. "Positive Freedom, Markets and the Welfare State," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 2(2), pages 25-36, Summer.
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    12. Martin Weale, 2019. "This blessed plot: when should capital gains on land be regarded as income," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 37-53.
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    Cited by:

    1. Iain Brown & Pam Berry, 2022. "National Climate Change Risk Assessments to inform adaptation policy priorities and environmental sustainability outcomes: a knowledge systems perspective," Climatic Change, Springer, vol. 175(3), pages 1-24, December.
    2. Bagstad, Kenneth J. & Ingram, Jane Carter & Shapiro, Carl D. & La Notte, Alessandra & Maes, Joachim & Vallecillo, Sara & Casey, C. Frank & Glynn, Pierre D. & Heris, Mehdi P. & Johnson, Justin A. & Lau, 2021. "Lessons learned from development of natural capital accounts in the United States and European Union," Ecosystem Services, Elsevier, vol. 52(C).
    3. Andrew M. Neill & Cathal O’Donoghue & Jane C. Stout, 2020. "A Natural Capital Lens for a Sustainable Bioeconomy: Determining the Unrealised and Unrecognised Services from Nature," Sustainability, MDPI, vol. 12(19), pages 1-24, September.
    4. Basu, Rahul & Pegg, Scott, 2020. "Minerals are a shared inheritance: Accounting for the resource curse," MPRA Paper 102270, University Library of Munich, Germany.
    5. Topf, Julie & Schultz, Leonardo A. & Silva, José Maria Cardoso da, 2023. "An index to measure the sustainability of place-based development pathways," Ecological Economics, Elsevier, vol. 204(PA).
    6. Alan Randall, 2022. "How Strong Sustainability Became Safety," Sustainability, MDPI, vol. 14(8), pages 1-17, April.
    7. Georgina M Mace, 2019. "The ecology of natural capital accounting," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 54-67.

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