Natural Capital and Ecological Restoration, An Occasional Paper of the SER Science and Policy Working Group (1), April 2004

SER International defines ecological restoration as the process of assisting the recovery of an ecosystem that has been degraded, damaged, or destroyed, and advocates a global strategy for the restoration of impaired ecosystems of all kinds. This strategy must be pursued with concomitant social, national, and financial dedication, and conducted with a robust ecological and biophysical underpinning.  SER International encourages local communities, planning agencies, governments and international organizations to recognize the importance of such a strategy, and to deploy their resources for its prompt implementation.

All human economies rely on natural goods and services that accrue from healthy, functional ecosystems.  Healthy ecosystems represent natural capital, much as infrastructure, equipment and monetary investments represent financial capital.  Natural capital is distinguished from financial capital by the notion of health, as is the complementary concept of social capital, which consists of healthy human communities.

Examples of natural goods are numerous and obvious: timber, firewood, charcoal, edible mushrooms, medicinal plants, seafood, and natural grasslands for animal husbandry. Examples of natural services are the production of clear air and water, protection of recharge areas and watersheds, detention of potential floodwaters, reduction of erosion and sedimentation, shoreline stability, contaminant sinks, bio-transformation of excess nutrients, production of topsoil, habitat for pollinators and biocontrol agents, preservation of genetic diversity, and recreational amenities.  These products of natural capital are available essentially without cost, whereas their manufactured and engineered counterparts are not.

A team of ecological economists estimated the annual worth of natural goods and services to exceed the gross world product (Costanza et al. 1997). Although consensus has not emerged as to the validity of their valuation methods, their study demonstrates that the benefits of natural capital to an economy or society are enormous.  Even more enormous is the cost of recovering natural capital when it has been lost or impaired, thereby warranting its continued protection.  Any action that degrades, damages, or  destroys ecosystems will reduce natural capital and thus the output of natural goods and services. Reduction of goods and services can even occur as the result of a minor simplification of ecosystem structure or an inopportune alteration of species diversity. Ecological restoration, however, increases natural capital and the output of natural goods and services. The increase of natural capital is a universal benefit of ecological restoration.

Natural capital economics differs from neoclassical economic theory in that it recognizes the contribution of nature to economy, and not only the products of human enterprise. Some argue that the formalization of "natural capital" is negative, or dangerous, because it can assign monetary value to nature or can lead to the privatization and ‘marketization’ of nature. The natural capital notion has indeed been used in such ways, just as an invention for one purpose can be used for another.  However, the intent of SER International is to recognize the ubiquitous benefits of natural capital restoration to human economy, and not to underscore other aspects.

Evidence is undeniable that innumerable ecosystems in habitable regions of the world have become transformed by people, and that the "human footprint" is now universal.  A corollary has been the degradation, damage, and destruction of ecosystems and the fragmentation of landscapes.  Where human-managed ecosystems were once contained within a matrix of wild lands, this relationship has become increasingly reversed.  Ecosystem impairments increase with demographic growth, economic activity, and ill-conceived economic development.  Since 1992, the rate of conversion of wild lands has been 11.4 percent (Balmford et al., 2002), despite conventions to the contrary that were signed at the Rio de Janeiro Earth Summit in that year. All too often this development was conducted without concern for economic or ecological sustainability. Our modern economy currently creates a footprint larger than the land surface of the planet. Without ecological restoration, this means that we are spending from our capital account rather than from the interest.

The importance of ecological restoration to economics can no longer be ignored. Only by augmenting natural capital can we achieve economic sustainability.  As we do so, we must pay close attention to the ratio and the spatial configuration of natural to degraded or permanently transformed lands. Unless we ensure an ongoing supply of regional and planetary natural capital, the goal of sustainable economies will be unattainable, and the social and political ramifications of this are a matter of grave concern. 

In discussions of natural capital by ecological economists and other scholars, attention has been reserved almost exclusively for wild and undisturbed nature.  The assumption has been that we can only preserve and make do with the limited natural capital that remains.  However, that amount of natural capital is already too low to support some economies and to provide ample benefits to many others.  It seems illogical, particularly in light of increasing human population, for these economies to be capable of achieving sustainability without first increasing their supply of natural capital. Ecological restoration enables us to increase the inventory of healthy, self-sustaining ecosystems, thereby increasing natural capital.  We must restore impaired ecosystems if we are ever to regain the natural capital necessary to prevent continued economic and social decay and to approach economic and ecological health and sustainability. 

Investment in the ecological restoration of impaired ecosystems must proceed in conjunction with efforts to reduce or halt the conversion of natural areas. Simultaneously, we must invest in alternatives to fossil fuels and persuade governments to eliminate "perverse subsidies" that promote ill-advised development and undermine economic and environmental sustainability.  Government subsidies in rich and poor countries alike actually encourage the demise of ecosystems and the consequent degradation of the biosphere (Myers & Kent, 2002). Instead, subsidization is warranted for the restoration and protection of natural capital (Cairns, 1993; Clewell, 2000; Daily,  1995; Milton et al., 2003). 

(1) Members of the Science and Policy Working Group are Chair Keith Winterhalder (Canada - wintergreen@sympatico.ca), James Aronson (France), Keith Bowers (USA, ex officio), Andy Clewell (USA), Wally Covington (USA), Jim Harris (UK), Eric Higgs (Canada), Richard Hobbs (Australia), Dennis Martinez (Indigenous Peoples), Carolina Murcia (Colombia), John Rieger (USA).

References

Balmford, A., Bruner, A., Cooper, P., et al. 2002. Economic reasons for conserving wild nature. Science 297:950-953.

Cairns, Jr., J. 1993. Ecological restoration: replenishing our national and global ecological capital. In: Saunders, D., Hobbs,  R. & Ehrlich, P.(eds.) Nature Conservation 3: Reconstruction of Fragmented Ecosystems. Surrey Beatty & Sons, Chipping Norton, NSW, Australia. Pp. 193-208.

Clewell, A. F. 2000. Editorial: Restoration of natural capital. Restoration Ecology, 8, 1.

Costanza, R. R., R. d'Arge, R. de Groot, S. Farber, M. Grasso, B. Hannon, K. Limburg, S. Naeem, R. V. O'Neill, J. Paruelo, R. G. Raskin, P. Sutton, and M. van der Belt.  1997.  The value of the world's ecosystem services and natural capital.  Nature 387:253-260.

Daily, G. 1995. Restoring value to the worlds degraded lands. Science 269:350-354.

Milton, S.J., Dean, W.R.J. and Richardson, D.M. 2003. Economic incentives for restoring natural capital: trends in southern African rangelands. Frontiers in Ecology and the Environment, 1, 247-254.

Myers, N. & J. Kent 2001. Perverse Subsidies: How tax dollars can undercut the Environment and the Economy.  Island Press, Washington D.C. & Covelo, California.

Members of the Science and Policy Working Group are Chair Keith Winterhalder (Canada - wintergreen@sympatico.ca), James Aronson (France), Keith Bowers (USA, ex officio), Andy Clewell (USA), Wally Covington (USA), Jim Harris (UK), Eric Higgs (Canada), Richard Hobbs (Australia), Dennis Martinez (Indigenous Peoples), Carolina Murcia (Colombia), John Rieger (USA).