Natural Capital

Biodiversity, Soil Fertility, and Water

“Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things. It is from this natural capital that humans derive a wide range of services, often called ecosystem services, which make human life possible. The most obvious ecosystem services include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible ecosystem services such as the climate regulation ………., or the pollination of crops by insects.” (From World Forum on Natural Capital).

The main issue is that the Natural Capital must be protected. This is a matter of human behavior, and political decisions, but also a matter of communication and making it part of our financial system. But how do we value these ‘world stocks of natural assets’? There is simply no way to calculate the value of the total natural capital, and it is not useful to do so (Sukhdev, 2012; minute 7:50 – 10:50), and it Is not possible to use the Willingness to Pay (since that depends who you ask). However, it is possible to calculate the costs of not damaging (Sukhdev, 2012; minute 12:25 – 14:20), which is called prevention costs in the eco-costs system.

The issues of clean air and water pollution are dealt with in E-LCA, see Table 2 of the webpage on the concept of the eco-costs. The issue of water scarcity is

dealt with in E-LCA by the ratio of total water withdrawals to available natural water supplies, see eco-costs of resource scarcity.
The issue of biodiversity is dealt with in E-LCA in terms of the eco-costs of land-use change, but in an insufficient way to deal with the production of food.
A solution to deal with soil fertility in E-LCA land-use has recently been proposed (De Laurentiis et al, 2019) for the Environmental Footprint system, however, it lacks practical data at sufficient detail (this is one of the reasons that soil fertility has not been incorporated in the eco-costs system so far).

This webpage proposes a practical solution to biodiversity and soil fertility in TCA. Bothe types of Natural Capital are of major importance with regard to ‘eco-system services’ in the food production chains. Water scarcity is dealt with at the webpage eco-costs of resource scarcity.

Biodiversity of land

The Natural Capital of biodiversity in the eco-costs system is valued at 6 euro per m2 of land with a biodiversity of 4000 species of vascular plants per 10.000 km2, see eco-costs of land-use (it is the price of not damaging the rain forest by developing palm oil plantations).
Most of the agricultural production takes place in

Content

regions of 1250-1500 species, eco-costs 1.88 – 2.25 euro per m2 (EU, USA, Australia, Argentina) up to 3000 species, eco-costs 4.5 euro per m2, (e.g. soy beans in Brazil; rice in the Far East).

E-LCA does look at the issue of eco-toxicity, i.e. degradation of natural capital by polluting eco-systems. With regard to the stock of biodiversity, however, the current E-LCA: (1) is not refined enough to take regional differences into account within countries, let alone between local farmers (2) does not account for conservation of biodiversity as it is done by some farmers (e.g. organic farmers). Issue (1) is related to the accuracy of local data. Issue (2) is more fundamental, since the calculation of LCIs is about flows (mass flows of pollutants to Natural Capital, as well as flows that deplete Natural Capital itself), in contrast to the issue of ‘conservation’ which is by definition related to no flow to or from Natural Capital (Note that eco-costs = 0 in situations with no flow and no change).
Both issues should be dealt with in TCA. But how?