Nature provides all kinds of goods and services that offer economic opportunities, such as a water, food, building materials and recreation areas. However, this ‘natural capital’ is under pressure due to the growing world population and increased economic prosperity. Businesses, civic organisations and governments are therefore looking for sustainable ways to profit from natural capital, now and in the future. While this is leading to various innovations, many opportunities are still being overlooked. It is time to step up the effort.
This is concluded by PBL in its report Natural Capital: Recognising its true value. During the past two years, at the request of the Dutch Ministry of Economic Affairs, PBL conducted a number of practical studies to explore how society can keep profiting from the goods and services provided by nature, without negatively affecting natural capital.
Natural capital under pressure, across the globe
“We use nature because it’s valuable, but we lose it because it’s free.” This quote by TEEB project leader Pavan Sukhdev* has contributed in recent years to increased attention for the value of nature, natural capital, and its sustainable utilisation. Natural capital provides all kinds of services – known as ecosystem services – such as clean water and air, food, energy and recreation. On a global level, 60% of ecosystem services is being degraded. Natural soil fertility, natural pest control and carbon sequestration, in particular, are affected. This is likely to lead to food and water shortages and loss of income.
Sustainable entrepreneurship to secure resources
In the Netherlands there is growing awareness among companies that sustainable use of nature is an absolute necessity to secure the resources needed for economic development, now and in the future. For example, companies in the cacao production chain are heavily investing in certification programmes for sustainable production, because crop quality and yield levels nearly failed to meet demand. Furthermore, entrepreneurs see new ‘green market’ opportunities to make a profit with sustainable products. Idealism may also play a role; in the growing market for sustainable, locally produced food, many entrepreneurs are willing to accept lower profits to realise their sustainability ambitions.
Entrepreneurial nature management to increase funding and enhance biodiversity
Dutch nature and landscape conservation organisations are looking for new sources of funding and ways to broaden their support base – for example, by developing new recreational activities for visitors or producing energy from biomass, using waste from pruning, thinning and trimming. Of course, such activities should not be at the expense of biodiversity. In many cases, biodiversity actually increases as local environmental conditions are improved.
Joint, sustainable use of nature
Space is scarce in the Netherlands; each area of the country has many different stakeholders (citizens, municipalities, water management authorities, nature conservation organisations, companies) with diverse interests and objectives. By working together, these stakeholders can make better, more sustainable use of the natural capital within their area. In the Ems-Dollart estuary, for example, provincial authorities, water management authorities, nature organisations and the agricultural sector collaborate in an innovative project to build a double-dyke zone combining flood protection objectives with aquaculture, nature development, saline agriculture and clay extraction. Collaborative initiatives such as these are also found in urban areas; for example, to make cities climate-proof.
Still a long way to go in the sustainable utilisation of natural capital
The PBL studies show that initiatives aimed at creating synergy between nature and economy lead to innovation. Smarter, more sustainable use of natural capital results in gains for society (increased benefits, in some cases decreased costs). However, there is still a long way to go. Front-runners among companies, organisations and governments often have to pioneer to find their way. Existing nature conservation regulations focus on protecting nature from overexploitation, leaving little room for experimentation with sustainable utilisation. There is a lack of knowledge on how to protect natural capital while at the same time capturing its economic and societal benefits – for example, through sustainable harvesting of resources or sustainable extraction of drinking water. In order to strengthen the connection between financial and natural capital the barriers identified above must be addressed. Only then will companies, nature organisations and citizens be able to expand on the opportunities for natural capital conservation and sustainable utilisation.
*Pavan Sukhdev, former banker and project leader of the international research initiative TEEB (The Economics of Ecosystems and Biodiversity).
Download the report here