In general terms, ‘capital’ is defined as the stock of materials or information that exists within a system at any given time. Some common forms of capital are financial capital, man-made capital and social capital. The important concept within all forms of capital, however, is that when put to use they yield a flow of goods and/or services; much as an investor will use financial capital to generate profits, a stock of trees or population or fish will provide a future flow of timber or food. A final distinction to draw is the difference between living natural capital and dead natural capital. Living natural capital is sustained by solar energy, and includes all ecosystems. It can be harvested for goods and also yield ecosystem services when properly maintained. Dead natural capital includes minerals and fossil fuels that do not provide any services other than their use, i.e. burning of fossil fuels for energy. For the purpose of this publication, natural capital will refer only to the stock of the earth’s living ecosystems.
Like man-made capital - such as a power station that provides electricity, or a water treatment facility that improves water quality - natural capital provides a vital flow of ecosystem goods and services. Ecosystem goods and services are functions of an ecosystem that directly or indirectly benefit human wellbeing and play a vital role in livelihoods and economies from local to global scales.
Ecosystem goods are portions of the natural capital itself - such as timber or fish - that are harvested from ecosystems. It is well documented that overharvesting of ecosystem goods will lead to a depletion in natural capital and ultimately an unsustainable supply of both ecosystem goods and services (Millennium Ecosystem Assessment, 2005). Ecosystem services are flows of services such as watershed protection or climate regulation that can be derived from natural capital. Unlike ecosystem goods, the use of ecosystem services does not necessarily affect the sustainability of these services into the future.
The diversity of species within ecosystems is key to the provision of vital ecosystem services; much as a financial investor might diversify their portfolio of assets, it is also important to maintain the biodiversity of our natural capital. There is a consensus among ecologists that, in general, biologically diverse ecosystems provide a greater flow of ecosystem services than non-diverse systems. There is also strong evidence that more biologically diverse ecosystems are more resilient to changing physical environments. In the face of the impending impacts of climate change it will be vital to maintain biologically diverse ecosystems to ensure the reliable provision of ecosystem services from the world’s stocks of natural capital.