February 8, 2016
To calculate the value of natural capital, you start with the same economic principles used to value traditional assets, explains economist and School of Sustainability professor Joshua Abbott. Then, you factor in changes in ecosystems and human behavior that influence the appreciation or depreciation of that natural resource. The result is a figure that can be compared on a balance sheet with traditional assets like real estate, factory machinery and infrastructure.
Abbott — with lead author Eli Fenichel of Yale and colleagues from California State University at Chico, Michigan State University and the National Oceanic and Atmospheric Administration — published these findings in February 2016 in the Proceedings of the National Academy of Sciences.
“Without an apples-to-apples valuation approach, the value of natural capital cannot be measured against other assets and expenses,” Abbott said. “Our work can help governments and businesses track the sustainable use of natural resources.”