Natural Capital Commons

Our Natural Capital Commons: Nature and its resources and biodiversity are the source and sustenance of all of life. The overexploitation, overproduction and overconsumption of Nature’s natural capital above ecosystem carrying capacity levels, systematically reduces the ecosystem’s carrying capacity, and activates the Scarcity-Conflict Death Spiral:

Earth is home to millions of species, including humans. An approximate number of total number of eukaryotic species is likely to be 5 ± 3 million of which about 1.5 million have been already named. Current estimates of eukaryote phyla:

  • 1.5 million fungi; 3,067 brown algae; 17,000 lichens;
  • 321,212 plants (including: 10,134 red and green algae, 16,236 mosses, 12,000 ferns and horsetails, 1,021 gymnosperms, 281,821 angiosperms);
  • 1,367,555 non-insect animals including: 1,305,250 invertebrates (2,175 corals, 85,000 mollusks, as many as 1.1 million arachnids, including ~1 million mites and ~100,000 other arachnids, 47,000 crustaceans, 68,827 other invertebrates); 63,649 vertebrates (31,300 fish, 7,093 amphibians, 9,768 reptiles, 9,998 birds, 5,490 mammals);
  • As many as 10–30 million insects.

Earth’s mineral resources and the products of the biosphere contribute resources that are used to support all of earth’s species populations, including the mammalian human population. 29.2% (148.94 million km2, or 57.51 million sq mi) of planet earth is not covered by water and consists of mountains, deserts, plains, plateaus, and other geomorphologies.

Natural capital is the extension of the economic notion of capital (manufactured means of production) to environmental goods and services. A functional definition of capital in general is: “a stock that yields a flow of valuable goods or services into the future”. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future. For example, a stock of trees or fish provides a flow of new trees or fish, a flow which can be sustainable indefinitely. Natural capital also provide services like recycling wastes or water catchment and erosion control. Since the flow of services from ecosystems requires that they function as whole systems, the structure and diversity of the system are important components of natural capital.

Economic prosperity depends on the flow of services from at least four types of capital: natural capital (the direct level of reliance depends on the sector and country; although indirectly all of the economy is dependent on the biodiversity strength of nature and its natural resources), manmade capital (buildings, machines and infrastructure, all of which are dependent on natural capital resources for their manufacture, maintenance and operation), human capital (people and their education, skills and creativity, whose physical and psychological health is directly dependent on natural capital) and social capital (the links between people and communities in terms of cooperation, trust and rule of law; all of which once again relies on the health and biodiversity of natural capital, to avoid degeneration into scarcity-conflict relationships).

Natural Capital: Ecosystems & Biodiversity

‘Biodiversity’ is an umbrella term that covers all life on the planet, from the genetic level to terrestrial, freshwater and marine habitats and ecosystems. It underpins our global economy as well as human well-being. Biological diversity means “the variability among living organisms from all sources, including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems” (Article 2, convention on Biological Diversity (cBD)). The term covers all the variety of life that can be found on Earth (plants, animals, fungi and microorganisms), the diversity of communities that they form and the habitats in which they live. It encompasses three levels: ecosystem diversity (i.e. variety of ecosystems); species diversity (i.e. variety of different species); and genetic diversity (i.e. variety of genes within species).

Ecosystem means “a dynamic complex of plant, animal and micro-organism communities and their non-living environment interacting as a functional unit” (Article 2, cBD). Each ecosystem contains complex relationships between living (biotic) and non-living (abiotic) components (resources), sunlight, air, water, minerals and n The quantity (e.g. biomass and productivity), quality and diversity of species (richness, rarity, and uniqueness) each play an important role in a given ecosystem. The functioning of an ecosystem often hinges on a number of species or groups of species that perform certain functions e.g. pollination, grazing, predation, nitrogen fixing.

Ecosystem services refer to the benefits that people obtain from ecosystems (Millennium Ecosystem Assessment 2005a). These include: provisioning services (e.g. food, fibre, fuel, water); regulating services (benefits obtained from ecosystem processes that regulate e.g. climate, floods, disease, waste and water quality); cultural services (e.g. recreation, aesthetic enjoyment, tourism, spiritual and ethical values); and supporting services necessary for the production of all other ecosystem services (e.g. soil formation, photosynthesis, nutrient cycling).

Robert Costanza, et al (15 May 1997): The value of the world’s ecosystem services and natural capital[PDF]; Nature, Vol. 387, 15 May 1997:

“The services of ecological systems and the natural capital stocks that produce them are critical to the functioning of the Earth’s life-support system. They contribute to human welfare, both directly and indirectly, and therefore represent part of the total economic value of the planet. We have estimated the current economic value of 17 ecosystem services for 16 biomes, based on published studies and a few original calculations. For the entire biosphere, the value (most of which is outside the market) is estimated to be in the range of US$16–54 trillion (1012) per year, with an average of US$ 33 trillion per year. Because of the nature of the uncertainties, this must be considered a minimum estimate. Global gross national product total is around US$18 trillion per year.”

“Because ecosystem services are not fully ‘captured’ in commercial markets or adequately quantified in terms comparable with economic services and manufactured capital, they are often given too little weight in policy decisions. This neglect may ultimately compromise the sustainability of humans in the biosphere. The economies of the Earth would grind to a halt without the services of ecological life-support systems, so in one sense their total value to the economy is infinite. However, it can be instructive to estimate the ‘incremental’ or ‘marginal’ value of ecosystem services (the estimated rate of change of value compared with changes in ecosystem services from their current levels). There have been many studies in the past few decades aimed at estimating the value of a wide variety of ecosystem services. We have gathered together this large (but scattered) amount of information and present it here in a form useful for ecologists, economists, policy makers and the general public. From this synthesis, we have estimated values for ecosystem services per unit area by biome, and then multiplied by the total area of each biome and summed over all services and biomes.”

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Ecosystem Services

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Global change and the Earth System: A Planet under Pressure:

The extent to which human activities are influencing or  even dominating many aspects of Earth’s environment and its functioning has led to suggestions that another geological epoch, the Anthropocene Era (a term coined by Paul Crutzen and Eugene Stoermer), has begun:

  • In the last 150 years humankind has exhausted 40% of the known oil reserves that took several hundred million years to generate;
  • Nearly 50% of the land surface has been transformed by direct human action, with significant consequences for biodiversity, nutrient cycling, soil structure, soil biology, and climate;
  • More nitrogen is now fixed synthetically for fertilisers and through fossil fuel combustion than is fixed naturally in all terrestrial ecosystems;
  • More than half of all accessible freshwater is appropriated for human purposes, and underground water resources are being depleted rapidly in many areas;
  • The concentrations of several climatically important greenhouse gases, in addition to CO2 and CH4, have substantially increased in the atmosphere;
  • Coastal and marine habitats are being dramatically altered; 50% of mangroves have been removed and wetlands have shrunk by one-half;
  • About 22% of recognised marine fisheries are overexploited or already depleted, and 44% more are at their limit of exploitation;
  • Extinction rates are increasing sharply in marine and terrestrial ecosystems around the world; the Earth is now in the midst of its first great extinction event caused by the activities of a single biological species (humankind).

The graphs below depict the increasing rates of change in human activity since the beginning of the Industrial Revolution. Significant increases in rates of change occur around the 1950s in each case and illustrate how the past 50 years have been a period of dramatic and unprecedented change in human history. (Steffen et al (2004)).

The following graphs depict the Global-scale changes in the Earth System as a result of the dramatic increase in human activity: (a) atmospheric CO2 concentration [Etheridge et al. (1996) J. Geophys. Res. 101:4115-4128]; (b) atmospheric N2 O concentration [Machida et al. (1995) Geophys. Res. Lett. 22:2921-2924]; (c) atmospheric CH4 concentration [Blunier et al. (1993) J. Geophys. Res. 20:2219-2222]; (d) percentage total column ozone loss over Antarctica, using the average annual total column ozone, 330, as a base [J.D. Shanklin, British Antarctic Survey]; (e) northern hemisphere average surface temperature anomalies [Mann et al. (1999) Geophys. Res. Lett. 26(6):759-762]; (f) decadal frequency of great floods (one-in-100-year events) after 1860 for basins larger than 200 000 km2 with observations that span at least 30 years [Milly et al. (2002) Nature 415:514-517]; (g) percentage of global fisheries either fully exploited, overfished or collapsed [FAOSTAT (2002) Statistical databases]; (h) annual shrimp production as a proxy for coastal zone alteration [WRI (2003) A guide to world resources, 2002-2004; FAOSTAT (2002) Statistical databases]; (i) model-calculated partitioning of the human-induced nitrogen perturbation fluxes in the global coastal margin for the period since 1850 [Mackenzie et al. (2002) Chem. Geology 190:13-32]; (j) loss of tropical rainforest and woodland, as estimated for tropical Africa, Latin America and South and Southeast Asia [Richards (1990) In: The Earth as transformed by human action, Cambridge University Press; WRI (1990) Forest and rangelands]; (k) amount of land converted to pasture and cropland [Klein Goldewijk and Battjes (1997) National Institute for Public Health and the Environment (RIVM). Bilthoven, Netherlands]; and (l) mathematically calculated rate of extinction [Wilson (1992) The diversity of life, the Penguin Press].

Sources: US Bureau of the Census (2000) International database; Nordhaus (1997) In: The economics of new goods. University of Chicago Press; World Bank (2002) Data and statistics; World Commission on Dams (2000) The report of the World Commission on Dams; Shiklomanov (1990) Global water resources; International Fertilizer Industry Association (2002) Fertilizer indicators; UN Centre for Human Settlements (2001); The state of the world’s cities, (2001); Pulp and Paper International (1993) PPI’s international fact and price book; MacDonalds (2002); UNEP (2000) Global environmental outlook 2000; Canning (2001) A database of world infrastructure stocks, 1950–95 World Bank; World Tourism Organization (2001) Tourism industry trends.

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Drivers of Planetary Changes:

Demographics and Consumption above Carrying Capacity Limits:

Over the past two centuries, both the human population and the economic wealth of the world have grown rapidly. These two factors have increased resource consumption significantly, registered in agriculture and food production, forestry, industrial development, transport and international commerce, energy production, urbanisation and even recreational activities.

In the developed world, affluence, and more importantly the demand for a broad range of goods and services such as entertainment, mobility, and communication, is placing significant demands on global resources. Between 1970 and 1997, the global consumption of energy increased by 84%, and consumption of materials also increased dramatically. While the global population more than doubled in the second half of the last century, grain production tripled, energy consumption quadrupled, and economic activity quintupled. Although much of this accelerating economic activity and energy consumption occurred in developed countries, the developing world is beginning to play a larger role in the global economy and hence is having increasing impacts on resources and environment.

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Planetary Boundaries: A Safe Operating Space for Humanity:

The Earth system responds in complex ways to external forces. The most obvious external force is the energy from the sun, which changes over time. On timescales of hundreds of thousands of years, the Earth’s position relative to the sun alters slightly, changing the amount of energy we receive. The Earth system responds to this external force by cycling between ice ages and warm periods in a regular pattern.

After the last ice age, which finished 12,000 years ago, the Earth system settled into a relatively stable warm period that has allowed human society to grow and develop, eventually becoming a global force. Without significant external interference, this period would have likely persisted for several thousand years to come.

In 2009, researchers (Rockstrom, 2009: A safe operating space for humanity PDF) made the first attempt to define planetary boundaries associated with thresholds or tipping points in the Earth system that threaten the current state. They identified nine interconnected boundaries. Ensuring these boundaries are respected, the authors argue, will reduce the risk of crossing dangerous thresholds that push the Earth system into a new state. But the authors also state that human activity has already driven the Earth system across three boundaries: climate, biodiversity loss and nitrogen use¹.

The boundaries concept is still in its infancy and is expected to be refined in the coming years to explore its full implications. However, it is a useful communication tool. It moves the discussion beyond sustainable resource use to focus on fundamental and uncontrolled changes to Earth’s biological, chemical and physical processes, prompting society to rethink definitions of sustainable development. Furthermore, it has the potential to help policymakers take an interconnected approach to managing planetary risks.

Planetary Boundaries

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