Does the establishment of a “Natural Capital Committee” – NCC (which will report into the Economic Affairs Committee – chaired by the Chancellor of the Exchequer) herald a change in thinking in the West about the importance of our natural world? The result of The Natural Environment White Paper, the Natural Choice: Securing the Value of Nature, it does mark a potential for change in the way that British Governments view the economy and the impact of economic progress on the environment.
DEFRA’s website ( http://www.defra.gov.uk/naturalcapitalcommittee/) states: “By reporting into the EA Committee and the Chancellor, this Committee has the opportunity to truly influence the economic policy of the UK for the good of the natural environment.”
This has been an understated move that has virtually had no publicity amongst the swirl of economic and austerity measures that seem to dominate our lives. As the government decides who will Chair the committee and populate it, the sound of recession, bankers’ pay, unemployment and lack of economic growth (here and overseas) crowd out any other debate.
Yet, CO2 emissions continue to grow and the drive for renewed economic growth here (and continuing economic growth in China and elsewhere) dictates the future quality of our lives more fundamentally than the setting up of a small committee (subsidiary to the EAC). No matter who Chairs the NCC, its voice will be very small unless the Natural Capital community and those as interested in the quality of our lives as in the quantity of our economic performance develop an ability to shout louder.
Natural Capital is defined by the Natural Capital Initiative (www.naturalcapitalinitiative.org.uk) as:
the term ‘capital’ is used to describe a stock or resource that produces revenue or yield. Natural capital is usually interpreted as an economic metaphor for environmental assets, such as forests, soils or marine habitats that supply resources to the economy or offer a receptacle for disposal of wastes. Four basic categories of natural capital are generally recognised: air, water (fresh, groundwater and marine), land (including soil, space and landscape) and habitats (including the ecosystems, flora and fauna which they both comprise and support). The quantity and the quality of natural capital affect the quantity and quality of benefits generated.
So, how important has the subject become – is the role of natural capital in our decision-making yet central or peripheral? Is this even a debate or a quiet discussion in hushed rooms? Is this just a British issue or one that is expanding to a world scale?
There is no doubt that champions exist that want desperately to make this a central issue in all economic debates and have a strong desire to internationalize it. As the world struggles to untangle itself from 19th Century dogma in politics and economics and to integrate natural capital into the mainstream, there is no doubt that key advances are starting to be made.
For example, the world of accounting is leading one strand through the International Integrated Reporting Committee (IIRC) which last year issued a report on the integration natural capital into corporate reporting. This begins to link (even if peripherally) the micro and macroeconomies through natural capital – although as economists have failed to link the two for the last 250 years, the impact is not yet clear.
Nevertheless, macro and micro events are starting. Natural Capital (the link between the human and financial capitals that dominate economic thinking – the missing link of economics) is beginning to grow in importance. Natural capitalists (those who can anticipate this change) are what we have to become – ensuring that the world in which we live is considered as more than a simple “externality” and becomes a critical element in economic decision-making. Natural capital needs to fight for airtime amongst politicians and economists still mired in the mindsets of the 19th Century. It is a start.