Accounting for natural capital assets

New Zealand needs to put a monetary value on the services delivered by the country’s natural capital assets to ensure they are properly accounted for and managed in decision making, according to Massey University ecological economist Dr Marjan van den Belt.

Dr van den Belt spoke on natural capital and ecosystem services at the first-ever Royal Society of New Zealand workshop looking at ecosystem services, policy development and regulation held in Wellington on August 9.

The ecosystem services approach values the Earth’s natural resources in terms of the multitude of services they provide. For example, wetlands carry out water filtration and flood reduction, rivers provide food, drinking water and recreational services, coastal dunes and saltmarshes protect against storm damage.

Dr van den Belt says New Zealand, an island well-endowed with natural capital, has the opportunity to develop world-leading vision and practices in how to use natural capital and communicate the importance of ecosystem services in policy and decision making.

“To do this society needs to invest equal effort in valuing those assets as it does valuing things like exports and gross domestic product (GDP). This will provide a more comprehensive understanding of how natural capital is part of the infrastructure that enables economic activities to contribute to long term prosperity.

“If you put a value on your natural assets, and you find that its value is two or three times the value of your GDP, then people will take notice. Providing a value will increase transparency, put environmental assets and the services people derive from them on the map and really start to influence decision making,” she says.

“Valuing ecosystem services doesn’t mean an immediate sell-off to the highest bidder. Instead, it signifies the importance of natural assets which, in combination with built, human and social capital, are all contributing to prosperity. Ecosystems and their services are easily taken for granted and difficult to communicate. It needs to be noted that not all ecosystem services, for example, the spiritual values derived from natural assets can have a dollar value placed them,” she says.

Though Dr van den Belt says her view of providing a monetary estimate may not be shared by everyone, there was general agreement that the ecosystem service approach was useful in bridging science and policy.

Influential international organizations, for example the United Nations, Worldbank, OECD, European Union and World Wildlife Fund as well as many universities and research organisations are currently exploring the ecosystem services concept and New Zealand should be ‘an active partner in that discussion,’ she says.

In 1997, Dr van den Belt co-authored an article published in Nature “The value of the world's ecosystem services and natural capital” which valued 17 of the earth’s ecosystem services at a ‘minimum’ of US$33 trillion per year, compared to a global GDP of US$18 trillion.

The Royal Society of New Zealand workshop was an opportunity for researchers and policy-makers to bring together ideas on this emerging issue and look at how to use the Ecosystem Service approach for the future in New Zealand, Dr van den Belt says.