Barbier, Edward B. “The concept of natural capital.” Oxford Review of Economic Policy 35.1 (2019): 14-36.
The natural environment is now commonly viewed as a form of capital asset, or natural capital. Also included are ecosystems that provide important goods and services to the economy. Managing natural capital has consequences for sustainable development. However, there are contrasting weak versus strong sustainability views, which in turn have implications for ‘green’ accounting. Natural resource-based sovereign wealth funds have emerged as key financial instruments for compensating resource depreciation with greater economy-wide investments. Recent scientific evidence recommends demarcating ‘safe operating spaces’ to limit exploitation of critical global biophysical subsystems or processes. These challenges suggest that the concept of natural capital is pivotal to sound policy.