1 The Natural Capital Framework Presentation to the Seminar ‘Environmental Economics and Natural Capital’ In the series ‘Sustaining Future Ecosystem Services – From Understanding to Action’ By Professor Paul Ekins Professor of Energy and Environment Policy, King’s College London National Liberal Club, London Wednesday 16 th April 2008
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1 The Natural Capital Framework Presentation to the Seminar Environmental Economics and Natural Capital In the series Sustaining Future Ecosystem Services.
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1
The Natural Capital Framework
Presentation to the Seminar‘Environmental Economics and Natural Capital’
In the series ‘Sustaining Future Ecosystem Services – From Understanding to
Action’
By
Professor Paul EkinsProfessor of Energy and Environment Policy, King’s College London
National Liberal Club, London
Wednesday 16th April 2008
2
CRITINC Project
• DG Research Framework 5 • Making Sustainability Operational: Critical
Natural Capital And The Implications Of A Strong Sustainability Criterion (CRITINC)
• Ekins, P., Simon, S., Deutsch, L., Folke, C. & de Groot, R. 2003 ‘A Framework for the Practical Application of the Concepts of Critical Natural Capital and Strong Sustainability’ in Special Section of Ecological Economics, edited by Paul Ekins, Carl Folke & Rudolf de Groot, Vol.44 No.2-3, pp.165-185
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SRDTOOLS Project• DG Research Framework 6 • Methods and tools for evaluating the impact of cohesion
policies on sustainable regional development (SRDTOOLS)
• Arose out of DG REGIO evaluation of contribution of structural funds to sustainable development (SD) which– Used 4-capitals model of SD, which– Enabled identification of UNsustainable development– Structured dialogue in recognisably economic language – Identified trade-offs between different dimensions of SD
BUT did not identify how decisions should be made about trade-offs
• Ekins, P., Dresner, S. & Dahlström, K. 2008 (forthcoming) ‘The 4-Capitals Method of Sustainable Development Evaluation’ in European Environment, Special Issue on Sustainable Development Evaluation, edited by Paul Ekins and Simon Dresner
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The Concept of Capital and 4-Capital Framework
• Capital stocks (assets) provide a flow of goods and services which contribute to human well-being. The stock value is the net present value of the flow
• Four types of capital recognised: – Manufactured Capital: produced assets used to produce
other goods and services, e.g. buildings, transport infrastructure, machines
– Natural Capital: traditional natural resources (timber, water, minerals) and other natural assets such as biodiversity, climate, ecosystems
– Human Capital: health, wellbeing and productive potential of individuals
– Social Capital: social networks that support efficient and cohesive societies, e.g. social trust, norms, political and legal structures
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Capital and Sustainability• Places Environment in recognisable economic
framework on an equal basis with other factors of production (cf ‘externality’ concept)
• Capital and sustainability: in the provision of goods and services, capital depreciates; for sustainability it must be replenished (investment)
• Economic, social, environmental sustainability• Weak and strong sustainability (substitutability
between capitals)• Potential for unsustainable development lies in loss of
one or more capital stocks, or in trade-offs made between different forms of capital, and extent to which– Any decline represents a breach of some critical threshold (breach of
which threatens system integrity), and if not, whether– Any decline in one form is compensated by increases in other forms
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Natural Capital• Characteristics, Values and Functions of
• CRITINC framework: SGAP plus economic and social indicators
Sustainability Gap Calculations
Environ-mental stress
(ES)
Sustain-ability
standard (SS)
Sustain-ability Gap (SGAP)
(ES-SS)
Normalised SGAP (100*SGAP/SS), EPeq
Years to sustain-ability
1980 1991 1980 1991 1980 1991 Climate change, Ceq
286 239 10 276 229 2760 100
2290 83
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Ozone depletion, Oeq
20000 8721 0 20000 8721 na na 8.5
Acidification, Aeq
6700 4100 400 6300 3700 1575 100
925 59
16
Eutrophication, Eeq
302 273 86 216 187 251 100
217 86
71
Dispersion, Deq 251 222 12 239 210 1992 100
1750 88
80
Waste disposal, Weq
15.3 14.1 3 12.3 11.1 410 100
370 90
102
Disturbance, Neq
46 57 9 37 48 411 100
533 130
never
TOTAL na na na na na 7399 100
6085 82
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Various Sustainability Measures for the Netherlands
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The CRITINC Methodology• Identification of the function(s) under threat or investigation,
and their placement in the relevant category (source, sink, life-support or human health and welfare).
• Relation of the functions back to the natural capital from which they emanate.
• Preparation of the various environmental impact matrices.• Derivation of sustainability standards for the functions, if
possible, or trends in those cases where sustainability standards cannot be identified.
• Where standards have been identified, calculation of the SGAPs in relation to them.
• Description of the economic or social aspiration that is putting the function under threat or pressure, in terms of the benefit that its realisation would yield. Investigation of alternative ways of partially or wholly achieving the aspiration.
• Application of a system of decision-analysis, such as multi-criteria analysis, to give insights into the implications of closing the SGAPs
SRDTOOLS: A nested approach to assessing sustainable development
Social
Impacts
Deliberation
Weighting
Weighted
MCA
CBA
Monetised
Indicators
Choosing assessment methods:
Taking account of complexitysocial
Rationality
individualsimple The good complexcertainty/risk uncertaintyindividual items common goods