By Ian Bateman, Karen Anderson, Arthur Argles, Claire Belcher, Richard Betts, Amy Binner, Richard Brazier, Frankie Cho, Rebecca Collins, Brett Day, Carolina Duran-Rojas, Sabrina Eisenbarth, Kate Gannon, Naomi Gatis, Ben Groom, Rosemary Hails, Anna Harper, Amii Harwood, Astley Hastings, Matthew Heard, Tim Hill, Alex Inman, Christopher Lee, David Luscombe, Rob Mackenzie, Mattia Mancini, James Morison, Aaron Morris, Chris Quine, Pat Snowdon, Charles Tyler, Elena Vanguelova, Matthew Wilkinson, Daniel Williamson, and Georgios Xenakis.
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How do we bring nature into the decisions government and businesses have to make every day?
Most economic decisions treat the environment as if it was invisible, focussing instead on the contribution of human capital (such as labour, education, etc.) and manufactured capital (machines, buildings, etc.) as sources of inputs to produce the goods and services that deliver human wellbeing. However, the environment is actually a vital source of resources and other services which are crucial to that delivery of wellbeing. Characterising the environment as providing this ‘natural capital’ reveals the massive value of nature relative to other inputs. This ‘natural capital approach’ highlights three principles of good decision making: (i) Sustainability of natural resources across generations (ii) Efficiency allocation of resources to their best use and (iii) Equity in considering the distribution of the wellbeing created.
The need for a natural capital approach to decision making is illustrated by its application to the creation of major new woodlands to remove greenhouse gases from the atmosphere as a contribution towards hitting net zero emissions and slowing climate change. Here the approach highlights the need to consider all of the impacts, both positive and negative, which would arise from such radical land use change when undertaken across large areas. A comprehensive review shows that, through the natural capital approach, all of these benefits and costs can be considered and brought into decision making, delivering woodlands which are sustainable, make efficient use of resources and enhance equity.