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GEO-6 Regional Assessment for North America


Finally, the business community has begun to embrace Natural Capital Accounting spurred by the book “Natural Capitalism” and a Harvard Business review article (Hawken et al. 1999a, b). These studies made a business case for efficient natural resource use, the opportunities for innovative new environmentally friendly products and the need to account for risks of resource shortages and costs throughout the supply chain. The Natural Capital Coalition brings together the many approaches to natural capital accounting for the private sector and is developing and encouraging the use of a standardized Natural Capital Protocol and sector guides, for the private sector. This efforts builds on the UNEP- private sector partnership on The Economics of Ecosystems and Biodiversity (TEEB), as well as, a North American history of investors and companies pursuing sustainability through advocacy groups, such as, CERES and the Business for Social Responsibility, numerous companies and financial institutions from Canada and the United States are members in these efforts and are exploring the application of Natural Capital Accounting to their enterprises.


Background


Natural capital comprises the planet’s supply of air, land, water, biodiversity, and other natural resources including minerals


and hydrocarbons, solar and wind energy,


ecosystem interaction, and chemical reactions–and even the gravity that pulls rivers down from mountain lakes and drives the ocean’s deep water conveyer system. While many concerned voices reject any attempt to commodify nature, the idea can facilitate responsible decision-making at the personal as well as at a global scale. At national scales, natural capital accounting can be a valuable tool for policy design and implementation (Guerry et al. 2015; Costanza et al. 1998).


Built, human, and social capitals are assigned monetary value according to the benefits of goods and services they provide. The benefits provided by the resources and processes supplied by natural capital are known as ecosystem goods and services, often shortened to ecosystem services (MA 2005).


202


Figure 3.2.15: Human appropriation of net primary production, excluding effects of human-induced fires


Source: Haberl et al. 2007 Note: Grams of carbon per metre squared per year


Traditionally these ecosystem services were not assigned a value when drawing up national accounts. However, if the value of the infrastructure that human societies would have to install to replace ecosystem services is assessed, the real value of natural capital begins to be comprehensible. So, should a city install an expensive water treatment network of ponds and pools churning 24/7 or should it protect the watershed from which it takes its water supply? The concern about honeybee vulnerabilities, for instance, has led to more robust evidence of the value of their ecosystem services: the estimated annual global contribution of managed honeybee pollination is USD 28-123 million, with only around USD 1.8 million actually being paid through commercial transactions. The contribution of wild pollinators ranged between USD 49 and USD 311 million with no direct payment by beneficiaries for the service (Allsop et al. 2008).


According to the Natural Capital Coalition, the top 100 environmental externalities cost the global economy around $4.7 trillion a year, while half of all existing corporate profits are at risk if the costs associated with natural capital were to be internalized through market mechanisms, regulation,


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