Natural Capital: Definition & Significance | Glossary

What Does "Natural Capital" Mean?

Natural capital: Glossary Sections

How Do You Pronounce "Natural Capital"

/ˈnætʃərəl ˈkæpɪtəl/

"Natural capital" is pronounced as two separate words. "Natural" sounds like "na-chur-al" with the stress on the first syllable. "Capital" is said as "ca-pi-tal" with the emphasis on the first syllable too.

The "a" in "natural" is short, like in "cat". The "u" is barely heard, and the "r" is soft in most English accents. In "capital", both "a" sounds are short, like in "cat" and "pal".

Some speakers might slightly link the two words, saying "na-chur-al-ca-pi-tal". But it's perfectly fine to pause briefly between the words. Regional accents may affect the exact sounds, but this pronunciation is widely understood.

What Part of Speech Does "Natural Capital" Belong To?

"Natural capital" is a noun phrase. It consists of two parts:

1. "Natural" - an adjective
2. "Capital" - a noun

This term is primarily used as a compound noun in environmental and economic contexts.

Example Sentences Using "Natural capital"

1. Our company aims to protect natural capital by reducing its environmental impact.
2. Economists now include natural capital when assessing a country's wealth.
3. The forest's natural capital provides essential ecosystem services to the local community.

Key Components of Natural Capital

• Renewable resources like forests and fish stocks
• Non-renewable resources such as oil and minerals
• Natural processes like water purification and pollination
• Ecosystem services including climate regulation and flood protection

Importance of Natural Capital in Environmental Economics

Natural capital isn't just a fancy term; it's what keeps our economy and wellbeing afloat. Imagine this: without fresh air, clean water, and good soil, a lot of businesses wouldn't even get off the ground.

Seeing the light, companies and governments are finally counting nature's worth. It's becoming a big deal in their strategy. Take companies, for instance. Some now consider the value of dense, leafy forests when they crunch their numbers. Why? Because those trees are nature's vacuum cleaners for our air and water. Governments aren't far behind. They're figuring out how to balance the checkbook of growth with keeping nature in the green. They want to keep our planet in tip-top shape, not just for us but for all the years to come.

Etymology of Natural Capital

The term "Natural capital" combines two words: "natural" and "capital."

"Natural" comes from the Latin word "naturalis," meaning "by birth" or "of nature." It entered English in the 14th century.

"Capital" derives from the Latin "capitalis," meaning "of the head." It later came to mean "wealth" or "resources" in economic contexts.

Economists began using "Natural capital" in the 1970s and 1980s. They wanted to highlight nature's value in economic terms. This helped show how environmental damage could hurt economies.

The phrase gained popularity in the 1990s. It became a key concept in discussions about sustainable development and conservation.

Evolution of Natural Capital as a Concept

Natural capital is how we talk about nature’s part in the economy. It’s not a new idea; it was mentioned by Adam Smith way back in 1776 when he wrote about how nature helps businesses in "The Wealth of Nations." But for a long time, not many people paid attention to it.

Things changed in the 1970s. Economists started to see nature as something valuable. E.F. Schumacher was one of them, and in 1973, he wrote a book called "Small Is Beautiful." In it, he said we should look at nature as something we invest in, not just something we use up.

The momentum kept up in the 1980s. A British economist named David Pearce came up with ways to figure out what nature is worth. More experts took his lead and expanded on his ideas.

Then in 1988, Robert Costanza, an environmental economist, made a move that really got people talking. He used "natural capital" in his research paper, and soon, scientists and policymakers everywhere were using the term.

By the 1990s, the idea was worldwide. At the Rio Earth Summit of 1992, world leaders discussed natural capital, signaling that countries were starting to think about nature when making their economic strategies. This journey shows the progress in how we recognize what nature brings to our financial table.

Terms Related to Natural Capital

Interesting Facts about Natural Capital and Ecosystem Services

Natural capital provides about $125 trillion worth of services to the global economy each year. This is nearly twice the world's GDP (Costanza et al., 2014).^[1]

Wetlands, a crucial natural capital, provide flood protection worth $464 billion per year globally (Costanza et al., 2014).^[2]

About 50% of cancer drugs introduced since 1981 are either natural products or directly derived from them (Newman & Cragg, 2020).^[3]

Forests store about 662 billion tons of carbon. This is more than the amount in the entire atmosphere (Pan et al., 2011).^[4]

The ocean absorbs about 26% of human-produced carbon dioxide. This helps slow global climate change (Friedlingstein et al., 2022).^[5]

Mangrove forests provide coastal protection services worth up to $65 billion per year globally (Menéndez et al., 2020).^[6]

Natural Capital in Media and Corporate Sustainability Reports

Natural capital, the world's stock of natural resources, has gained attention in media and corporate reports. It highlights the value of nature in our economy and society.

1. The Economics of Ecosystems and Biodiversity (TEEB) report This influential 2010 study brought natural capital into mainstream economic discussions. It showed how ecosystem services contribute to human well-being.
2. Corporate sustainability reports Many companies now include natural capital assessments in their annual reports. For example, Kering Group's Environmental Profit & Loss account measures their environmental impact in monetary terms.
3. "Planet Earth" documentary series While not explicitly mentioning natural capital, this BBC series showcases Earth's biodiversity and ecosystems. It indirectly highlights the value of our planet's natural resources.
4. "The True Cost" documentary This film explores the impact of fashion on people and the planet. It touches on the concept of natural capital by discussing the environmental costs of clothing production.
5. World Bank's "Changing Wealth of Nations" report This publication measures the wealth of countries by including natural capital alongside produced capital and human capital.

These examples show how natural capital is becoming a key concept in environmental and economic discussions across various media platforms.

Natural Capital In Different Languages: 20 Translations

Translation Notes:

1. In Chinese and Japanese, the concept is expressed using characters that literally mean "nature" and "capital," maintaining a direct translation.
2. Arabic uses a phrase that translates to "head of natural wealth," reflecting a slightly different conceptual approach.
3. Indonesian uses "Modal alam," which translates to "nature capital," slightly inverting the word order compared to English.
4. Swahili uses "Mtaji wa asili," which means "capital of origin" or "capital of nature," emphasizing the natural origin of this form of capital.
5. Most European languages maintain a structure similar to English, with variations in word order (e.g., "capital natural" in Spanish and Portuguese).

Natural Capital Variations

Natural Capital Images and Visual Representations

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