The big picture

This video paints a scary picture of our relationship with resources – keep that in mind as you work though this subtopic.

The concept of natural capital is basically the supply of resources and services that we get from nature. Natural capital is the non-living elements of the planet such as the mineral deposits and the fossil fuels. It also includes all the biological elements such as the fisheries, forests and the fertile soil along with the services nature provides – filtering the air and the water.

A resource is anything that is useful to humans. It can be materials, energy, people, knowledge, services etc. – the list is truly endless. By definition everything that is around you right now is probably a resource because you are using it or will be using it. Think very carefully about that stuff – do you really need it all? How often do you replace your mobile phone, your laptop, your school bag?

Figure 1. Stuff - useful or wasteful?

The concept of natural capital came about to raise awareness of a similar economic concept – if you want a business to survive you do not use your natural capital, you use the income it generates!

Resources benefit us because they fill a need or want, they make money and they enhance well-being. Unfortunately they come at a cost, many of our most important resources are non-renewable – as in we can only use them once and they are gone. The worst examples of this are the fossil fuels, once we burn them they are gone forever, they cannot be reused or recycled and they are finite.

"It's not as though we can keep burning coal in our power plants. Coal is a finite resource, too. We must find alternatives, and it's a better idea to find alternatives sooner then wait until we run out of coal." - Elon Musk

This raises the idea of sustainability and stewardship. Natural capital should generate sustainable income so can we view the non-renewable resources as natural capital? They cannot be used to generate natural income because they regenerate so slowly.

Things may change, we may decide that coal and oil are useless to us, once we make that decision they are no longer a resource. You must be thinking the author is insane! However, it may come true, resources are not always resources – they change status and value. That is they may cease to be a resource and become worthless. Cork was once a valuable resource because it could be used as a stopper for bottles of wine, less so these days as screw tops are more popular. Now the cork forests of the Mediterranean may disappear, as they no longer provide natural capital. Therefore there is no incentive to save them.

Figure 2. The cork forests of the Mediterranean.

So think about it next time you want to buy something - what are the environmental impacts when want overpowers need?

Natural capital

There are a great many definitions of natural capital but the definition used here is given in 1.4.1. A useful way to view it is as all the natural assets the world has, the stock of goodies that earth provides for us. Those goodies may be goods (tangible items) or services – the intangible natural processes that benefit us. Natural capital is living or non-living, it has a value and without it our lives would not be possible.

The value of natural capital maybe aesthetic, cultural, economic, environmental, ethical, intrinsic, social, spiritual or technological but that value is not static. The value and therefore the status (is it natural capital or isn’t it?) may change over time and space due to cultural, social, economic, environmental, technological and political factors. Before you read on stop and think. How can natural capital possibly change status over space and time?

The following sections look at the types of natural capital and the factors that change their value or status.

Theory of Knowledge

What role does language play in how we view natural capital or is that natural resources?

Economic capital

Economic natural capital is probably the easiest to understand, as it is the one that we are familiar with. We find it easy to comprehend something tangible that has monetary value, e.g. gold has a known value according to weight and quality (carat). There are numerous examples of economic natural capital e.g. fossil fuels, timber, food crops and gemstones. These things have an economic value and can be sold on the global markets. However, there are many factors that can change the status and value of an economic resource over space and time.

Figure 1. Economic natural capital.

Economic capital has no value in a society that does not use money as the basis for its “economy”. There are tribal lands in Papua New Guinea where there are large reserves of uranium. They will not sell that land because they have no use for the money they are offered; to them their tribal land is more useful than uranium was as an economic resource.

Lithium was first discovered in 1800 by a Brazilian chemist and at that time it was of no use to anyone. It was not until World War II that a use for it was discovered. Nowadays it has several industrial applications but it is probably most famous in lithium batteries. On the other hand flint has been seen as economic natural capital since the Stone Age. It had multiple uses including raw material for weapons, an ignition source for gunpowder and a building material. Now it has very limited value because it is no longer a significant natural resource. So technology may make a resource more or less useful to man.

Figure 2. Lithium used in batteries.

Economic, environmental and technological factors combine to determine the status of many of the reserves of fossil fuels. Oil has been used for nearly 4000 years. There are records of asphalt being used in the construction of the walls and towers of Babylon. Ancient Persian tablets record oil being used for medicinal and lighting purposes. This early exploitation of oil would have been based on oil that was available at or close to the surface. Once these reserves were exhausted it would have been necessary to develop technology to access the deeper reserves of oil.

Economic and technological factors will have determined whether or not the a reserve was exploited.

The North Sea has extensive oil reserves but during the first part of the 20th century it was only possible to extract the oil close to shore. It was not until the mid 1960s that the necessary technology was developed to allow drilling under water on the continental shelf. In addition to the lack of technology the North Sea presents serious environmental challenges due to high winds and heavy seas. Nowadays the environmental and technological challenges are no longer a problem and the UK alone has over 200 drilling operations in the North Sea.

Figure 3. Oil platform in the North Sea.

On many occasions economics determines the status of an oil reserve – is it financially worth extracting oil? When oil was plentiful the more remote oil fields were left alone as the cost of extraction was too high. Now, as oil runs low and with technological developments many of these “unprofitable” reserves are being exploited. As a rise in oil prices makes it financially viable to exploit the reserve. Fracking is a good example of this. Fracking is a technological breakthrough that allows the oil companies to exploit previously inaccessible, financially unviable oil reserves. If you want to learn more about fracking check out this site.

International-mindedness

In many cultures there is no economic value to natural capital. Think about that!

Aesthetic and intrinsic capital

Natural capital can have aesthetic value, but what does that even mean? The Internet will give you a wide range of definitions about aesthetics but there is no really focused definition of it. In brief aesthetic value is the appreciation of the beauty of something. The intrinsic value is closely linked to this as it is the inherent basic nature of something. It is valued not because you can make money from it but simply because it is there.

Figure 4. The northern lights.

The aesthetic value of natural capital is highly debatable and very subjective. As the saying goes “Beauty is in the eye of the beholder” - different people find different things beautiful. Figure 4 shows the northern lights – some people will find this very beautiful whilst others will find it less appealing.

The reason aesthetic value is important is that it makes people feel better. Many things can have an aesthetic value e.g. looking at a beautiful natural landscape or piece of art, ancient monuments, modern buildings, the list truly is endless.

Figure 5. What defines beauty?

Does the status change over time and space? Yes. Different cultures have very different ideas of beauty. Figure 5 shows a woman from the long neck tribe in Thailand. The women of this tribe elongate their necks with metal rings and the longer the neck the more attractive the woman are perceived to be. This ideal of beauty is costly - if the rings were to be removed the women would not be able to hold their head up, as the muscles are not strong enough. Other people may not consider this aesthetically pleasing.

The concept of beauty and what is aesthetically pleasing changes with fashion trends and has thus changed over time. Consider how much fashion has changed in your own lifetime. What is currently on Facebook, Twitter and Instagram may be considered wonderful today but not tomorrow.

Theory of Knowledge

How can we assess what natural capital is worth if we can't put a price on it?

More on natural capital

Spiritual capital

Spiritual and aesthetic natural capital are very closely linked. Aesthetic natural capital brings a sense of wellbeing and peace to the spirit. In addition to that there are spiritual sites all over the world. Spiritual capital may come in the form of famous religious buildings e.g. Sacre Coeur (Paris, France), ancient religions sites e.g. Angkor Wat (Siem Reap, Cambodia), ancient monuments e.g. Stonehenge (Salisbury, UK), spiritual places of indigenous people e.g. Uluru (Northern Territory, Australia) and even websites – this webpage gives the top 10.

Do these change status or value over time and space? That is hard to say. Many of the spiritual sites linked to religion would probably not be considered valuable by people of other religions. However, for the followers of that religion their status would not change over time. This is probably less true of the spiritual places that are not linked to religion though they may be valued for different reasons. Uluru is an important spiritual site for the Aboriginal people of Australia so it is spiritual natural capital. For the tour operators in Alice Springs, Uluru is economic natural capital! For other people it may be of environmental value – it has unique ecosystems and it is a geologist dream.

Figure 1. Uluru at sunset.

Environmental capital

Many people would consider the whole planet to be environmental natural capital. Essentially our environment provides all other capital. Ecocentrics would say that natural capital should be left untouched, anthropocentrics would say it can be managed and technocentrics would say exploit it all. Overall the environment always has been and always will be of value to humans – just how it is useful will vary over space and time.

Theory of Knowledge

Discuss how indigenous knowledge may impact a persons view of environmental capital.

Technological capital

This is an unusual type of natural capital as it is largely based on human resources and our ability to solve solutions. With the speed of technological development such natural capital can change status incredibly quickly. Much of the technology you use now (mobile phones, laptop, tablets etc.) has built in obsolescence – that is it will become useless very quickly. The devices will go out of fashion as soon as the next model comes along.

Does technological capital status and value vary spatially? The vast majority of you will probably have answered no – everyone needs technology. Think again – for many people such technology is too expensive and runs on electricity. Such technology is not an asset to these people.

Figure 2. Technological natural capital?

Technological capital will affect the status of other resources - particularly the economic ones as technological advances make some economic capital more or less useful and accessible.

International-mindedness

Consider how different EVS's would view technological capita.

Ethical and cultural natural capital

Ethics is a set of moral principles by which we live and culture is the set of attributes that a group or society inherits from past generations. It could be said that ethical and cultural standards and practices determine why we make the decisions we make. Our ethical and cultural codes are dynamic and have evolved over time and vary between regions. What was once considered acceptable no longer is e.g. slavery and child labour are not considered acceptable in modern times.

Ethical principals and cultural attitudes play a large role in the status of some forms of natural capital. Many people do not feel nuclear power is acceptable because they believe the risks associated with such power generation are too high. The thinking behind this is driven by cultural norms and ethical ideals. Many people feel it is unethical to exploit certain economic reserves of oil due to the cost to the environment e.g. fracking.

Figure 3. Is it ethical?

Social natural capital

This is the network of relationships between people. These are very fluid as relationships come and go over time. There is also a societal element to this as certain regions will value different relationships.

Examiner Tip

Questions about natural capital are common so you need to have a clear idea of what it is and how and why its value and status may change. Have at least one example of all types of natural capital and what effects its value and status. Remember changes are spatial and temporal.

Non-renewable natural capital

Non-renewable or renewable?

Natural capital can be classified on a sliding scale as regards to its renewability - that is how long it takes to replace itself as compared to how fast we use it. On one end of the scale are the non-renewable resources that can only be replaced over geological timescales. Fossil fuels, minerals and rocks are all non-renewable. Technically ALL natural capital can become non-renewable; all it takes is poor management.

On the other end of the scale is renewable natural capital, which can be replaced as fast as it is being used. Examples of this include living species that use solar energy through photosynthesis and non-living elements such as water and ozone – these too use solar energy.

Some authorities argue that in between these extremes lies things like soil and some water reserves. On the one hand soil formation is incredibly slow as the bulk of the soil comes from the breakdown of rocks with organic matter added over time. These processes take place over geological timescales (non-renewable). In theory, once soil is formed good management practices can keep it fertile and healthy – making it renewable. However, at current rates of soil degradation it is considered to be a non-renewable resource. Some groundwater reserves take millennia to form, aquifers fill slowly but are depleted rapidly by over-extraction, this moves a renewable resource into the non-renewable domain very quickly.

Figure 1. Groundwater renewable or non-renewable

Non-renewable natural capital

Non-renewable natural capital is pretty easy to identify – anything that takes geological times scales to form. It is not technically non-renewable, just irreplaceable in our life times. Non-renewable natural capital cannot be replaced at a rate faster than or equal to our consumption rates - it is therefore also referred to as finite.

Theory of Knowledge

The definition of natural capital is: A natural resources that produce sustainable natural income of goods and services. By definition non-renewable natural resources can not be used sustainably. Discuss.

Depending on which sources you consult and how you decide when oil formation begins – oil takes anything from 5,000 – 10 million years to form. The 10 million comes from the fact that it takes that long to get the right geological conditions for oil formation. The accumulation of organic material, depth of burial and heat and pressure for oil formation is slow but once formation gets going it only takes 5,000 years to give you oil. Beware – that is still significantly slower than our rate of consumption. According to Peak Oil we have used half the world’s oil in 125 years. So whether you take 5,000 or 10 million years, we are still using it faster than it can form. For some startling figures check out the crude oil clock at at the Peak Oil website.

Figure 2. Crude oil pumping.

Can we manage non-renewable natural capital?

In most textbooks and in much of the media there is a focus on oil and the fact that we are running out of it. This global panic is largely due to the fact that we are so heavily dependent on it for so much. The well-known uses for oil include as fuel for numerous vehicles from cars to planes, heating and as the base for road surfaces. However there are many other uses such as plastics, paints, synthetic fibers such as nylon, cleaning products, medicinal products such as aspirin, lubricants, fertilizers and pesticides and cosmetics.

The developed nations are most worried about the use of oil in transport so a great deal has been done to find substitutes for oil as a fuel in vehicles (though not for planes yet). Great progress is also being made in the pursuit of alternative energy for the generation of electricity. Think about that. Look around you and think about how many of the items around you rely on oil – remember most of it has been transported somewhere at some point in time. If you are not sure do a quick internet search for the things in your daily lives that rely on oil.

There is hope for the future, although there are currently no substitutes for some of the non-renewable resources we are beginning to come up with alternative solutions e.g. reduce, reuse, recycle helps slow our consumption of many raw materials.

Figure 3. Reduce, reuse recycle.

Examiner Tip

You need a case study about a non-renewable resource that is being mismanaged. In reality that is all of them – by definition they cannot be managed sustainably, therefore they are mismanaged! Soil and water are really the only possible resources that can be managed or mismanaged.

"The actions of humans on the soil have had damaging effects beyond current knowledge or ability to repair. Man's destructive relationship with soil can be characterized as parasitic. Classical civilizations collapsed because of destruction of their soil bases. In pursuit of abundant food and fibre, the clearing, tillage, fertilization and pest control methods have depleted soil organic matter, allowed topsoil to erode away, disrupted soil ecosystems, and needlessly poisoned communities of beneficial organisms and groundwater. Each of these factors taken alone reduces the "fertility capital" stored in the soil. Taken together, soil scientists have warned that the synergistic and cumulative effects of the changes unknowingly being in soils may affect life on the planet." - Union of International Associations

Section 5.3.3 covers management practices, what follows is a specific case study on mismanagement.

International-mindedness

Different countries approach the problem of resource management differently. Is one management strategy better than another?

Renewable: Use with care

This video provides a simple introduction to renewable resources, but please disregard soil - in this subject it is considered non-renewable.

Renewable natural capital is very varied but it all has one feature in common – it re-generates as fast as it is used (if it is properly managed). This type of natural capital may be:

• Living. All living species can be viewed as natural capital, anything from forests to cattle. They use solar energy either directly or indirectly to regenerate. Trees photosynthesize and cattle eat the products of photosynthesis.
• Non-living. This category includes the renewable energy resources, water resources and ozone.

There is a difference between renewable resources - they are not all created equal so to speak. Some of these resources must be managed sustainably or else they will cease to be renewable. However, some of these resources are renewable no matter how we use them.

The living natural capital must be carefully managed and used sustainably. If we mismanage a forest and harvest the trees without replanting them - that is unsustainable. We are cutting into the natural capital, rather than only using the natural income it generates. If that situation persists for too long the forest will disappear and there will be no more natural capital or income. On the other hand the forest can be managed sustainably and we can either harvest the trees and plant new ones to replace them. Or we can harvest the products from the trees – fruit, nuts, bark or branches.

Figure 1. Brazil nuts, a sustainable harvest.

All living renewable natural capital can be managed sustainably. Harvesting fish or other stocks of wild animals is sustainable so long as enough breeding individuals are left behind to reproduce and replace the ones that were harvested. If wild stocks are too heavily harvested the natural capital is depleted, the natural income reduced and a positive feedback cycle is initiated (1.4.1 Figure 3) which rapidly becomes unsustainable. A farmer would not kills all his cattle and sell them at market because he would not be left with anything for the next year. So why would it be acceptable to harvest all the fish in the sea?

Theory of Knowledge

To what extent do indigenous knowledge systems make better use of renewable natural capital then modern western cultures.

Much of the non-living natural capital is renewable in a way that we cannot change. The renewable energy sources such as wind, tidal, solar, geothermal and hydropower will remain unchanged no matter how much we use them. They cannot be used unsustainably because they are not depleted through use.

However, some of the non-living capital can be mismanaged and used un-sustainably. Water is renewed through the hydrological cycle. Humans extract water from the hydrological cycle at a variety of points – from rivers, groundwater, rainfall capture and even from the oceans (desalination). We use that water and it returns to the cycle. If rivers become polluted that cleansing will not happen. If we over-extract water from groundwater reserves then they do not refill in time and the natural capital is lost. Such practices are unsustainable and if continued indefinitely will cause loss of potable water for some populations.

Figure 2. Polluted water shows unsustainable use of natural capital.

Straospheric ozone is another example of non-living natural capital, not one that we use but one that provides a service. Ozone protects us from the harmful UV rays and its formation is dependent on sunlight. The concept of capital and income cannot apply to ozone because we don’t use it, however our actions are still depleting this source of natural capital. Our use of ozone depleting substances is destroying stratospheric ozone faster than it can reform. This too is unsustainable, but what part of it is unsustainable? Our use of ozone depleting substances must be significantly reduced to allow the ozone layer to repair itself.

International-mindedness

Consider why some countries make better use of renewable natural resources than other countries do.

Tragedy of the commons

On an intellectual level we all know that it is stupid to over-harvest renewable natural capital to the extent that it is no longer renewable. So why does it happen? The tragedy of the commons is a concept that was introduced by William Forester Lloyd in 1833. The concept covers natural human behaviour – individuals will act independently and rationally according to their own self-interest. They will do so even if it is not in the best interests of the group as a whole by depleting or damaging a communal resource.

Figure 1. The tragedy of the commons is a broken system.

Theory of Knowledge

Figure 1 shows people at a demonstration. Consider the use of language and one other way of knowing as a method to distort knowledge.

An example of this would be fisherman A who harvests as many fish as he can. Enough to feed himself and his family with some left over to sell for profit. That is the self-interest part. This is a selfish act, as it does not leave enough for his companions in the wider community. Not only that but if every fisherman does what fisherman A does it does not leave enough fish to reproduce ready for the next harvest. Everyone loses out in the long run.

This video is a brief introduction to the problems of over-fishing, one of the classic example of the tragedy of the commons.