Basin defines natural capital as:
Thriving ecosystems are the bedrock of our economy. It’s the air we breathe, the water we drink, the soil we cultivate, and the biodiversity that sustains life. Our collective stock of natural assets makes life possible on this planet, and it's worth valuing.
The World Forum on Natural Capital defines it is as follows:
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 and natural flood defenses provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects. Even less visible are cultural ecosystem services such as the inspiration we take from wildlife and the natural environment.
Basically, natural capital is everything our world is made of. We know that it is valuable but it is not priced according to its infinite intrinsic value.
In Basin’s eyes, natural capital is derived from real estate and real estate fundamentals are the best way to restore and protect the world's living systems.
Why is natural capital, aka living capital, the most important and biggest revenue model for Basin but also society?
One: natural capital is our living systems and if humans want to remain on earth we need healthy, functioning, thriving ecosystems.
Two, the numbers tell the story:
- more than half of the world’s GDP (~$44T) is highly dependent on nature and the value of nature is estimated to be somewhere between 5 and 9 quadrillion dollars. (Yes, quadrillion.) (Costanza et al)
- wildlife populations had declined by an average of 69 percent since 1970 and if we don’t invest ~$700B per year in protecting and restoring nature we are pretty much done for. (WWF; TNC)
If we don’t rise up to the nature loss challenge, it does not matter how much carbon we suck out of the air, there won't be any people to operate the DAC machines.
Reactions around "natural capital" range from excited to perplexed to disgusted. The biggest pushback seems to be the perceived financialization of nature. While we understand this perspective, how is the current system working for us?
We are not financializing nature, we are naturalizing finance.
We don't have a choice but to measure what matters and price what is valuable.
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