Natural capital accounts: nations and organizations

Abstract

ABSTRACTNatural capital accounting is a new tool in environmental management. It can be understood as a new (and better) combination of existing tools used in economic analysis with environmental data. It articulates technical and scientific understanding of the environment in economic value terms for decision-makers. The various current forms of environmental, ecosystem and natural capital accounting are described. Examples are given of natural capital accounting for the urban environment at different spatial scales, from a single park to a UK national urban account. Reliance on economic valuation of the environment also brings risks, so understanding is needed of how values are generated, good practice in presenting them (e.g. alongside physical measures for context), and what they miss (e.g. stating key unvalued issues and being aware of potential threshold effects). The structure of natural capital accounting helps mitigate these risks, and so it can be used as a positive tool to highlight the value of the natural environment as an asset to our present and future society. Building on existing understanding and tools means natural capital accounting can be relatively easy to initiate.