Natural capital assessments assign value to the services and benefits of the natural environment for better integration into decision-making processes.
Nature provides the basic goods and services that make human life possible: the food we eat, the water we drink and the plant materials we use on for fuel, building materials and medicine. The natural world also provides less visible services such as climate regulation, the natural flood defenses provided by forests, the removal of air pollutants by vegetation, and insects pollinating crops. Then there is the inspiration we get from wildlife and the natural environment.
Attributing a valuation to our natural capital assets, including the quality of those assets and the flow of services, can help us think logically about what aspects of the natural world we are measuring and how they affect people.
Natural capital assets are the things that persist in the long term such as a mountain or fish population. From those assets people receive a stream of services such as leisure hikes on the mountain and fish being caught to eat. The flow of the service may be dependent on the quality or other qualities of those assets. This relationship may vary, depending on the type of service. Finally, we can appreciate the benefit of those services to society by estimating what was spent by the walkers to enable them to walk over the mountain or the profit for the fishermen from bringing the fish to the market. Applying this logic consistently across assets and services allows us to begin building accounts of the value provided by nature.
The benefits we get from the natural world are mostly hidden, partial or missing from the nation's balance sheet. However, by recognizing nature as a form of capital and developing accounts of natural capital's contribution to our well-being, decision makers can better include the environment in their plans to allocate resources to develop and sustain the economy.
The development of natural capital accounts has been identified by the Natural Capital Committee and the UK National Ecosystem Assessment as a fundamental activity that is necessary if natural capital is to be mainstreamed in decision-making.
Through ERAMMP the accounting of Welsh natural capital takes place. See the reports below for more information.