Valuing natural capital when management is dominated by periods of inaction

Valuing natural assets is important for tracking the performance of management, for sustainability assessments based on wealth accounting, for environmental income and product accounting, and for benefit–cost analysis of specific projects. Developments in valuing natural capital have focused on implicit intertemporal exchange revealed by resource management behavior that maps the state of the natural system in a continuous fashion onto a management response. However, the management of many real assets, including many natural assets, is best described as inaction with punctuated adjustment. We develop natural asset valuation theory and approximation methods for such cases. We illustrate the theory and methods for the case of forests managed through even‐aged management, that is, clear cuts. These forests may provide “passive” or “inaction” value while standing and timber benefits at harvest. We find that the passive flow value of the forests can be positive and depend on site class, and that wealth held in private industrial Oregon Douglas‐fir forests increased over the first decade of the twenty‐first century.