How can we factor biodiversity into a natural capital account?
More than ever, we recognise that we need to take care of the natural capital assets that our environment provides; that we cannot survive without these assets. There are conferences, papers, reports, newsletters and blogs (like this one!), which are trying to push the discussion forward and raise awareness about the need to manage natural capital more sustainably. The hope is that these initiatives will spark the most important thing of all: ACTION.
One such action is for organisations to routinely account for their impacts and dependencies on natural capital. There are many frameworks to do this and many great examples of organisations that have done exactly this [see footnote 1]. They all are trying to answer the following questions:
1.What natural capital assets do they impact and depend on?
2.What benefits do those assets produce?
3.What is the value of those benefits? and
4.What does it cost to maintain those benefits?
Somewhere in every organisation and hopefully in their natural capital accounts, there is an important role played by biodiversity. It is an asset in itself but also underpins the productivity and health of all other natural capital assets. If ‘natural capital’ were a movie, then biodiversity would be a strong contender for Best Actor.
So how exactly can we factor biodiversity into a natural capital account? There are many answers.
Biodiversity is a natural capital asset in itself
It could feature in what we call the ‘natural capital asset register’ of an account. This is an inventory of indicators of the extent and condition (quantity and quality) of natural capital which, when tracked over time, helps us answer the first question above. We could reflect biodiversity in terms of species counts, environmental designations and even biodiversity metrics such the Defra metric, a habitat-based proxy of biodiversity value [see footnote 2].
Biodiversity is also an ecosystem service which provides benefits to wider society
It underpins other services that natural capital provides us like fisheries, timber and genetic resources but also recreation and aesthetic value. It also supports some of the processes which regulate our environment including its climate, air quality and resilience to environmental hazards. In this sense, biodiversity as an ecosystem service can be reflected in the physical flow of these other services because counting it separately would be double-counting.
There is a value to the benefits that biodiversity provides
It is also possible to estimate the monetary value of the benefits provided by biodiversity. Again, part of it will be reflected in the monetary value of other services it underpins. But, there is another part which will not: ‘non-use value’ which is the value we get from biodiversity without needing to use, consume or directly experience it. This can range from valuing biodiversity because it is important in itself, to valuing it for the sake of others including future generations. There is evidence that can be used to estimate the monetary value of this ‘non-use’ component of biodiversity. But, it is challenging to apply evidence that has been obtained in one particular context to another, even after making adjustments. There are, however, on-going efforts to develop more robust evidence of society’s current preferences for biodiversity, drawing on a variety of monetary and non-monetary valuation techniques.
So yes, there are many answers which themselves raise other questions. This is not a bad or confusing place to be. On the contrary, it makes evident the fact that biodiversity underpins everything and there is an opportunity and obligation to reflect it in as many ways as possible in a natural capital account, but more importantly in any decision involving the environment – especially because we are losing global biodiversity at an unprecedented rate in human history! [see footnote 3]
It is fitting that the Irish Forum on Natural Capital and the Department of Culture, Heritage and the Gaeltacht are hosting Ireland’s first National Biodiversity Conference to discuss precisely these issues. Join them on the 20th and 21st of February 2019 to hopefully help spark the most important thing of all: ACTION.
Sarah Krisht is a Principal Environmental Economist at AECOM who specialises in developing economic evidence to inform decisions that affect natural capital. She is part of AECOM’s Policy and Appraisal team, which includes expertise in natural capital and ecosystem services, strategic environmental assessment, sustainability appraisal, and climate policy. For more information, please contact firstname.lastname@example.org.
1 See for example the Natural Capital Coalition’s website for more information: https://naturalcapitalcoalition.org/
2 See the proposed new biodiversity metric: http://publications.naturalengland.org.uk/publication/6020204538888192
3 See WWF’s Living Planet Report 2018: https://www.wwf.org.uk/updates/living-planet-report-2018