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Strategies for the maintenance of natural capital

Author

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  • Spash, Clive L.
  • Clayton, Anthony M. H.

Abstract

Economic models cannot give us the information society needs to define the set of possible future scenarios facing the world. Thus "optimal" economic plans are susceptible to being overwhelmed by feedbacks of which humans are ignorant as economic systems increasingly stress ecosystems. These concerns have lead to a call for the maintenance of a fixed natural capital stock as a safe minimum standard. This paper analyzes the reasoning behind defining a class of inputs to production as natural capital. Two motivations are shown to be important justifications for the new class of capital: ecological criticality and non-human intrinsic values. We argue that these justifications require the maintenance of resources which are excluded from exploitation, but that the free market system cannot achieve this goal due to a basic assumption of trade-offs being derived from utilitarianism and the basis of constraints in economic value. Three methods which have been suggested for the protection of natural capital are reviewed; namely: compensating projects, cost-benefit analysis, and scientifically designated limits. Each of these approaches is shown to be inadequate at addressing the concerns which have led to the concept of natural capital. A, fourth, more interdisciplinary and inclusive approach is necessary and a type of systems analysis, employing Sustainability Assessment Maps, is put forward as a method which could fill that gap. This is a paper from the Ecological Economics discussion paper series edited by Clive L. Spash and run from Stirling University from 1994 to 1996. This particular paper was later published as (Spash and Clayton 1997). Spash, C.L. & A.M.H. Clayton. 1997. The maintenance of natural capital: Motivations and methods. In Space, Place and Environmental Ethics, eds. A. Light & J.M. Smith, 143-173. Lanham, Rowman & Littlefield Publishers, Inc.

Suggested Citation

  • Spash, Clive L. & Clayton, Anthony M. H., 1995. "Strategies for the maintenance of natural capital," MPRA Paper 38273, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38273
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    References listed on IDEAS

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    1. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
    2. Robert M. Solow, 1974. "The Economics of Resources or the Resources of Economics," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 12, pages 257-276, Palgrave Macmillan.
    3. Common, Mick & Perrings, Charles, 1992. "Towards an ecological economics of sustainability," Ecological Economics, Elsevier, vol. 6(1), pages 7-34, July.
    4. Daly, Herman E., 1990. "Toward some operational principles of sustainable development," Ecological Economics, Elsevier, vol. 2(1), pages 1-6, April.
    5. Nordhaus, William, 1982. "How Fast Should We Graze the Global Commons?," American Economic Review, American Economic Association, vol. 72(2), pages 242-246, May.
    6. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    7. Berkes, Fikret & Folke, Carl, 1992. "A systems perspective on the interrelations between natural, human-made and cultural capital," Ecological Economics, Elsevier, vol. 5(1), pages 1-8, March.
    8. Thomas H. Stevens & Jaime Echeverria & Ronald J. Glass & Tim Hager & Thomas A. More, 1991. "Measuring the Existence Value of Wildlife: What Do CVM Estimates Really Show?," Land Economics, University of Wisconsin Press, vol. 67(4), pages 390-400.
    9. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 29-45.
    10. Alistair Munro & Nick Hanley, 1991. "Shadow Projects and the Stock of Natural Capital: A Cautionary Note," Working Papers Series 91/8, University of Stirling, Division of Economics.
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    Cited by:

    1. Paunić, Alida, 2016. "Brazil, Preservation of Forest and Biodiversity," MPRA Paper 71462, University Library of Munich, Germany.
    2. MacDonald, Daisy V. & Hanley, Nick & Moffatt, Ian, 1999. "Applying the concept of natural capital criticality to regional resource management," Ecological Economics, Elsevier, vol. 29(1), pages 73-87, April.

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    More about this item

    Keywords

    natural capital; sustainability; utilitarianism; intrinsic values; strong uncertainty; ecosystem values; multiple criteria; plural values; ethics; cost-benefit analysis; compensation; regulation;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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