Natural capital is the world's stock of natural resources, which includes geology, soils, air, water and all living organisms. Some natural capital assets provide people with free goods and services, often called ecosystem services. All of these underpin our economy and society, and thus make human life possible.
Ecological economics, bioeconomics, ecolonomy, eco-economics, or ecol-econ is both a transdisciplinary and an interdisciplinary field of academic research addressing the interdependence and coevolution of human economies and natural ecosystems, both intertemporally and spatially. By treating the economy as a subsystem of Earth's larger ecosystem, and by emphasizing the preservation of natural capital, the field of ecological economics is differentiated from environmental economics, which is the mainstream economic analysis of the environment. One survey of German economists found that ecological and environmental economics are different schools of economic thought, with ecological economists emphasizing strong sustainability and rejecting the proposition that physical (human-made) capital can substitute for natural capital.
The ecological footprint measures human demand on natural capital, i.e. the quantity of nature it takes to support people and their economies. It tracks human demand on nature through an ecological accounting system. The accounts contrast the biologically productive area people use to satisfy their consumption to the biologically productive area available within a region, nation, or the world (biocapacity). Biocapacity is the productive area that can regenerate what people demand from nature. Therefore, the metric is a measure of human impact on the environment. As Ecological Footprint accounts measure to what extent human activities operate within the means of our planet, they are a central metric for sustainability.
Ecoinformatics, or ecological informatics, is the science of information in ecology and environmental science. It integrates environmental and information sciences to define entities and natural processes with language common to both humans and computers. However, this is a rapidly developing area in ecology and there are alternative perspectives on what constitutes ecoinformatics.
The green gross domestic product is an index of economic growth with the environmental consequences of that growth factored into a country's conventional GDP. Green GDP monetizes the loss of biodiversity, and accounts for costs caused by climate change. Some environmental experts prefer physical indicators, which may be aggregated to indices such as the "Sustainable Development Index".
Life cycle assessment (LCA), also known as life cycle analysis, is a methodology for assessing environmental impacts associated with all the stages of the life cycle of a commercial product, process, or service. For instance, in the case of a manufactured product, environmental impacts are assessed from raw material extraction and processing (cradle), through the product's manufacture, distribution and use, to the recycling or final disposal of the materials composing it (grave).
Ecosystem valuation is an economic process which assigns a value to an ecosystem and/or its ecosystem services. By quantifying, for example, the human welfare benefits of a forest to reduce flooding and erosion while sequestering carbon, providing habitat for endangered species, and absorbing harmful chemicals, such monetization ideally provides a tool for policy-makers and conservationists to evaluate management impacts and compare a cost-benefit analysis of potential policies. However, such valuations are estimates, and involve the inherent quantitative uncertainty and philosophical debate of evaluating a range non-market costs and benefits.
Environmental resource management or environmental management is the management of the interaction and impact of human societies on the environment. It is not, as the phrase might suggest, the management of the environment itself. Environmental resources management aims to ensure that ecosystem services are protected and maintained for future human generations, and also maintain ecosystem integrity through considering ethical, economic, and scientific (ecological) variables. Environmental resource management tries to identify factors between meeting needs and protecting resources. It is thus linked to environmental protection, resource management, sustainability, integrated landscape management, natural resource management, fisheries management, forest management, wildlife management, environmental management systems, and others.
Emergy is the amount of energy consumed in direct and indirect transformations to make a product or service. Emergy is a measure of quality differences between different forms of energy. Emergy is an expression of all the energy used in the work processes that generate a product or service in units of one type of energy. Emergy is measured in units of emjoules, a unit referring to the available energy consumed in transformations. Emergy accounts for different forms of energy and resources Each form is generated by transformation processes in nature and each has a different ability to support work in natural and in human systems. The recognition of these quality differences is a key concept.
Ecosystem services are the various benefits that humans derive from healthy ecosystems. These ecosystems, when functioning well, offer such things as provision of food, natural pollination of crops, clean air and water, decomposition of wastes, or flood control. Ecosystem services are grouped into four broad categories of services. There are provisioning services, such as the production of food and water. Regulating services, such as the control of climate and disease. Supporting services, such as nutrient cycles and oxygen production. And finally there are cultural services, such as spiritual and recreational benefits. Evaluations of ecosystem services may include assigning an economic value to them.
Environmental accounting is a subset of accounting proper, its target being to incorporate both economic and environmental information. It can be conducted at the corporate level or at the level of a national economy through the System of Integrated Environmental and Economic Accounting, a satellite system to the National Accounts of Countries.
The Potsdam Institute for Climate Impact Research is a German government-funded research institute addressing crucial scientific questions in the fields of global change, climate impacts, and sustainable development. Ranked among the top environmental think tanks worldwide, it is one of the leading research institutions and part of a global network of scientific and academic institutions working on questions of global environmental change. It is a member of the Leibniz Association, whose institutions perform research on subjects of high relevance to society.
Sustainability measurement is a set of frameworks or indicators used to measure how sustainable something is. This includes processes, products, services and businesses. Sustainability is dijfjfbfn
to quantify. It may even be impossible to measure as there is no fixed definition. To measure sustainability, frameworks and indicators consider environmental, social and economic domains. The metrics vary by use case and are still evolving. They include indicators, benchmarks and audits. They include sustainability standards and certification systems like Fairtrade and Organic. They also involve indices and accounting. They can include assessment, appraisal and other reporting systems. The metrics are used over a wide range of spatial and temporal scales. For organizations, sustainability measures include corporate sustainability reporting and Triple Bottom Line accounting. For countries, they include estimates of the quality of sustainability governance or quality of life measures, or environmental assessments like the Environmental Sustainability Index and Environmental Performance Index. Some methods let us track sustainable development. These include the UN Human Development Index and ecological footprints.
Earth Overshoot Day (EOD) is the calculated illustrative calendar date on which humanity's resource consumption for the year exceeds Earth’s capacity to regenerate those resources that year. In 2024, it fell on August 1st. The term "overshoot" represents the level by which human population's demand overshoots the sustainable amount of biological resources regenerated on Earth. When viewed through an economic perspective, the annual Earth Overshoot Day represents the day by which the planet's annual regenerative budget is spent, and humanity enters environmental deficit spending. Earth Overshoot Day is calculated by dividing the world biocapacity, by the world ecological footprint, and multiplying by 365, the number of days in a year:
Water accounting is a discipline that seeks to provide comprehensive, consistent and comparable policy relevant information related to water. Based on the experience of more than fifty years of national accounts, the discipline that provides the elements to calculate the Gross Domestic Product (GDP), the United Nations Statistics Division (UNSD) developed the System of Environmental and Economic Accounting for Water (SEEA-Water), which has been adopted by the United Nations Statistical Commission (UNSC) as a statistical interim standard in 2007.
System of Environmental-Economic Accounting (SEEA) is a framework to compile statistics linking environmental statistics to economic statistics. SEEA is described as a satellite system to the United Nations System of National Accounts (SNA). This means that the definitions, guidelines and practical approaches of the SNA are applied to the SEEA. This system enables environmental statistics to be compared to economic statistics as the system boundaries are the same after some processing of the input statistics. By analysing statistics on the economy and the environment at the same time it is possible to show different patterns of sustainability for production and consumption. It can also show the economic consequences of maintaining a certain environmental standard.
The International Resource Panel is a scientific panel of experts that aims to help nations use natural resources sustainably without compromising economic growth and human needs. It provides independent scientific assessments and expert advice on a variety of areas, including:
Natural capital accounting is the process of calculating the total stocks and flows of natural resources and services in a given ecosystem or region. Accounting for such goods may occur in physical or monetary terms. This process can subsequently inform government, corporate and consumer decision making as each relates to the use or consumption of natural resources and land, and sustainable behaviour.
Nature-based solutions describe the development and use of nature (biodiversity) and natural processes to address diverse socio-environmental issues. These issues include climate change mitigation and adaptation, human security issues such as water security and food security, and disaster risk reduction. The aim is that resilient ecosystems provide solutions for the benefit of both societies and biodiversity. The 2019 UN Climate Action Summit highlighted nature-based solutions as an effective method to combat climate change. For example, nature-based systems for climate change adaptation can include natural flood management, restoring natural coastal defences, and providing local cooling.
Madhu Verma is Indian born environmental economist presently working as Chief Economist at WRI India. She has worked extensively on Economic Valuation & Green Accounting of Ecosystems & Biodiversity, Ecosystem-Economy Modelling, Tiger & Snow Leopard Habitat Valuation, Forest- Fiscal Federalism and Payment for Ecosystem Services.
