The natural capital framework for sustainably efficient and equitable decision making

Background

The concept of ‘natural capital’ is increasingly accepted in government and private sector decision-making for its role in sustaining economic and social well-being. However, the field is fragmented, and many applications misuse its foundations in economics and ecology, which this perspective addresses by proposing an integrated framework.

Goals and Methods

The goal is to outline a coherent natural capital framework that links ecological and economic perspectives to guide decisions that are efficient, sustainable, and equitable. The framework illustrates how natural capital stocks, combined with other forms of capital (human, built, social), produce ecosystem services that contribute to human well-being. It emphasizes the need to value both market and non-market benefits in a common unit (monetary) for comparison. The approach also incorporates sustainability analysis, requiring that natural capital stocks be maintained, especially for critical, non-substitutable assets.

Conclusions and Takeaways

The authors argue that the integrated framework can significantly enhance decision-making by grounding it in both economic and ecological insight. They outline practical principles for its use, such as evaluating full benefits and costs, accounting for opportunity costs, and acknowledging ecological limits. While some knowledge gaps persist, they maintain that the framework is ready for application. Its use can safeguard vital natural assets, strengthen transparency, and ensure that natural capital investments are assessed alongside built infrastructure.