Natural capital

Forty years after the celebration of the first Earth Day, there is pretty general recognition that the human population is pressuring the Earth’s resources in a way that threatens our survival, and there is a growing appreciation for the concept of sustainability. Even big corporations have jumped on the “green” bandwagon—at least from an advertising point of view. Of course, there’s still plenty of disagreement on matters like climate change, but our “use it up and throw it away” culture is now hitting us all hard enough in the pocketbook—with Sullivan County’s recent landfill woes being a prime example—for most people to recognize that something has to change.

One way of looking at what is happening is summed up by Paul Hawken, Amory B. Lovins and L. Hunter Lovins in their book “Natural Capitalism,” writing that our current system of industrial capitalism “liquidates its capital and calls it income.”

Capital is what business uses to create wealth, like the equipment in a factory, for instance. Now imagine that a car manufacturer sells off all its car-making equipment, and marks up the proceeds as income. That will make everything look fine until so much equipment is sold that cars can’t be made anymore—and then there will be no income at all. In the same way, in order to support an economy of ever-expanding consumption, human beings are using up land, the minerals it contains and the services it provides. Once enough of these resources have been used up, the production/consumption machine will have to come to a halt. In fact, life itself may come to a halt.

That’s because land is not just square footage or even a pile of raw materials. It provides indispensable services like the production of oxygen and regulation of air quality, the decomposition and detoxification of organic wastes, the capturing of solar energy and fixing it in raw materials like wood and cotton, the prevention of floods and the production of food. The sum total of these systems is the “natural capital” that we use to fuel our existence. And the liquidation of natural capital in which our current industrial system is engaged does not just consist in sucking petroleum fields dry or using up mineral deposits or harvesting fish species to extinction; it resides in the fact that, in the process, the land and water in which they are located is being rendered incapable of providing future services of all kinds. The “factory” is being destroyed.

The first step toward reversing this trend is to recognize the tremendous economic value of our natural capital. Once we have done so, it becomes obvious that we can make economic progress only to the degree that in producing something, we do not destroy the natural capital needed to produce it. This, in turn, leads to thinking in terms of cycles. Natural capital is finite, and we simply cannot afford to take any of it permanently out of the natural and/or manmade production cycles. That means that for every product we have to think not only about what it takes to produce it and whether the supplies of those materials and energy are sustainable, but how it will be disposed of and how the materials in it can be re-used either for more man-made products or restored to the natural cycle.

Such a cradle-to-cradle mindset, in which we do not embark on production until and unless we have envisioned and planned for the full-product cycle, might well put an end to the “more is better” mentality that drives our current economy. We would think that, as a result, the emphasis would tend to shift to consuming fewer but higher-quality goods maintained for longer periods of time—which just incidentally would tend to create more good jobs, as maintenance jobs are difficult to outsource to other countries, and higher-quality goods in many cases would require more and better-paid labor input.

But whatever a re-imagined economy looks like, it’s clear that we have to start questioning our assumptions about how our economic system works if we are to arrive at any solution at all. To appreciate the bounty, and the vulnerability, of our precious natural capital would make a great first step, and Earth Day would be a good time to take it.

Dr. Punnybone