Geology Reference
In-Depth Information
are summarised as follows:
First, natural capital is hardly reproducible. Manmade restoring activities help
to increase it relatively speaking but Nature reproduces autonomously with its
growth depending on regeneration times.
Second, Nature is a dynamic ecological system and not a non-interactive aggre-
gation of assets. It is impossible to predict the positive or negative effects in
time and space of all human impacts. Furthermore, ignorance and uncertainty,
two key factors in any assessment of effects, cannot be readily quantified.
Third, the associated concept of “keeping natural capital constant” cannot be
supported. A number of human activities involving renewable resources are
irrecoverable and non-renewable resources, which are dispersed and exhausted,
can hardly be replaced by Man. Substitution among minerals is hampered by
growing chemodiversity induced by technological development.
Fourth, contrary to capital goods that need continual investment, as they wear
out or become obsolete, the value of natural resources remains priceless until
entering the market. It never depreciates per se and is not subject to obsoles-
cence. And as long as they remain as such, there will always be the opportunity
that future technologies could take advantage of the once overlooked resource
as was the case with zinc in Australia (Sec. 13.3.6).
Sixth, money cannot adequately evaluate natural capital, since it is subject to
societal values that change over time.
Seventh, the environment, although unquantifiable is finite, since some services
are provided by yet unknown interactions rather than a one-on-one cause-effect.
No one really knows how much natural capital exists on Earth, only that it is
in fact deteriorating.
2.6 The natural scientists' view
As noted earlier, economists try to find the physical extent of a resource and then
convert it into monetary units. Converting all physical accounts into such terms has
the advantage of permitting a single unit measure with which to add and compare
different assets. The problem of doing so stems from the assigning of “fair” prices
to different environmental functions and impacts.
Natural scientists, in contrast, have proposed indicators and environmental as-
sessment methodologies that do not require any form of cash conversion. Natural
capital is valuable in and of its own right and can hardly be incorporated as physical
satellite data in the System of National Accounts. As Smith (2004) states:
“Measurement of irreplaceable environmental assets is best undertaken in physical
terms. A monetary valuation is not necessary since they [natural capital] are
not substitutable by other forms of capital and, therefore, there is no reason to
directly compare stocks of these assets with stocks of produced or human capital
assets. Stocks of irreplaceable natural capital assets must be evaluated in and of
themselves.”
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