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.
Environmental economics is a sub-field of economics concerned with environmental issues. It has become a widely studied subject due to growing environmental concerns in the twenty-first century. Environmental economics "undertakes theoretical or empirical studies of the economic effects of national or local environmental policies around the world. ... Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming."
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.
Contingent valuation is a survey-based economic technique for the valuation of non-market resources, such as environmental preservation or the impact of externalities like pollution. While these resources do give people utility, certain aspects of them do not have a market price as they are not directly sold – for example, people receive benefit from a beautiful view of a mountain, but it would be tough to value using price-based models. Contingent valuation surveys are one technique which is used to measure these aspects. Contingent valuation is often referred to as a stated preference model, in contrast to a price-based revealed preference model. Both models are utility-based. Typically the survey asks how much money people would be willing to pay to maintain the existence of an environmental feature, such as biodiversity.
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.
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.
David William Pearce OBE was Emeritus Professor at the Department of Economics at University College London (UCL). He specialised in, and was a pioneer of, environmental economics, having published over fifty books and over 300 academic articles on the subject, including his 'Blueprint for a Green Economy' series.
Robert O. Mendelsohn is an American environmental economist. He is currently the Edwin Weyerhaeuser Davis Professor of the School of Forestry and Environmental Studies at Yale University, Professor of Economics in Economics Department at Yale University and Professor in the School of Management at Yale University. Mendelsohn is a major figure in the economics of global warming, being for example a contributor to the first Copenhagen Consensus report. Mendelsohn received a BA in economics from Harvard University in 1973 and obtained his Ph.D. in economics from Yale University in 1978.
Payments for ecosystem services (PES), also known as payments for environmental services, are incentives offered to farmers or landowners in exchange for managing their land to provide some sort of ecological service. They have been defined as "a transparent system for the additional provision of environmental services through conditional payments to voluntary providers". These programmes promote the conservation of natural resources in the marketplace.
The Economics of Ecosystems and Biodiversity (TEEB) was a study led by Pavan Sukhdev from 2007 to 2011. It is an international initiative to draw attention to the global economic benefits of biodiversity. Its objective is to highlight the growing cost of biodiversity loss and ecosystem degradation and to draw together expertise from the fields of science, economics and policy to enable practical actions. TEEB aims to assess, communicate and mainstream the urgency of actions through its five deliverables—D0: science and economic foundations, policy costs and costs of inaction, D1: policy opportunities for national and international policy-makers, D2: decision support for local administrators, D3: business risks, opportunities and metrics and D4: citizen and consumer ownership.
Earth Economics is a 501(c)(3) non-profit formally established in 2004 and headquartered in Tacoma, Washington, United States. The organisation uses natural capital valuation to help decision makers and local stakeholders to understand the value of natural capital assets. By identifying, monetising, and valuing natural capital and ecosystem services.
Pavan Sukhdev is an Indian environmental economist whose field of studies include green economy and international finance. He was the Special Adviser and Head of UNEP's Green Economy Initiative, a major UN project suite to demonstrate that greening of economies is not a burden on growth but rather a new engine for growing wealth, increasing decent employment, and reducing persistent poverty. Pavan was also the Study Leader for the ground breaking TEEB study commissioned by G8+5 and hosted by UNEP. Under his leadership, TEEB sized the global problem of biodiversity loss and ecosystem degradation in economic and human welfare terms, and proposed solutions targeted at policy-makers, administrators, businesses and citizens. TEEB presented its widely acclaimed Final Report suite at the UN meeting by Convention on Biological Diversity (CBD) in Nagoya, Japan.
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.
The Natural Capital Committee (NCC) was an independent body set up in 2012, initially for a three-year period, to report to the UK Government and advise on how to value nature and to ensure England's 'natural wealth' is managed efficiently and sustainably. During its first term it produced three reports to government on the 'State of Natural Capital'. It has called on the Office for National Statistics to integrate the state of the country's natural assets into mainstream national accounting.
Thomas Harry (Tom) Tietenberg is an American economist and environmentalist, and Emeritus Professor at Colby College, known for his work in the field of resource-based economy.
Karachepone N. Ninan is an ecological economist. Dr. Ninan was born in Nairobi, Kenya where he had his early school education. Thereafter he relocated to India where he continued his high school and college education.
Clive L. Spash is an ecological economist. He currently holds the Chair of Public Policy and Governance at Vienna University of Economics and Business, appointed in 2010. He is also Editor-in-Chief of the academic journal Environmental Values.
Susana Mourato is a professor of environmental economics at the London School of Economics and Political Science. She holds a leader position at the Grantham Research Institute on Climate Change and the Environment.
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.
Caroline Mary Saunders is a New Zealand academic, and as of 2020 is a Distinguished Professor at Lincoln University, specialising in environmental economics. She is a Fellow of the Royal Society Te Apārangi.
