Dieter Helm's lecture series on Natural Capital

2. QUESTIONS
What is natural capital?
How does it differ from ecosystem services and other
measures?
Is it a utility based or an asset/capabilities concept?
Who has what rights to natural capital?
How does natural capital fit into the wider economy or the
other way around?

3. WHAT IS NATURAL CAPITAL
Only used once
Optimal depletion rate
Treatment of economic rents
Taking externalities
Reproduced for ever at zero cost
Value open-ended
Thresholds define minimal
Benefits define optima
Renewables
WHAT NATURE GIVES US FOR FREE
Non Renewables

4. Everything
nature gives
us for free
Distribution
between
renewables
and non
renewables
WHY IS IT
SPECIAL AND
SO
VALUABLE
Asset
based
Systems, not
marginal
projects
WHAT IS NATURAL CAPITAL?
Everything
nature gives
us for free
Distribution
between
renewables
and non
renewables
WHY ISIT
SPECIAL AND
SO VALUABLE
Asset
based
Systems, not
marginal
projects
WHATISNATURAL CAPITAL?

5. HOW DOES IT DIFFER FROM ECOSYSTEM
SERVICES AND OTHER MEASURES?
Stocks vs. flows
Inputs and outputs
Uncertainty and potential outputs
Intrinsic value versus utility
In perpetuity, not distinct periods
Appeals to wider and ethical concepts
Ecosystem
services and
other
measures
NaturalCapital

6. IS IT UTILITY-BASED OR AN
ASSET/CAPABILITIES CONCEPT?
Can be utilitarian, but does not have to be restricted just to utilities
Distinction between options and choices and hence positive freedom
vs. utility–based efficiency
Equity now and in the future
The capabilities approach to natural capital

7. WHO HAS RIGHTS TO NATURAL CAPITAL?
The citizen vs. the consumer
Universal service and entitlements
Distinction of natural capital rights now between citizens and
countries
Example: The right to green space
How to think about the future generations
The role and limits of discounting

8. HOW DOES NATURAL CAPITAL FIT
WITH THE WIDER ECONOMY AND VICE VERSA?
The standard economists’ framework
Output = f (physical capital, labour, human capital, natural capital)
Alternatively
Physical capital =f (natural capital)
Core public good infrastructures
Non-marginal systems determining frameworks for markets, choices
and production

9. SUMMARY
Natural capital
ECOSYSTEM SERVICES OUTPUTS VALUES
DISCOUNT RATE.
Hard concept
Capabilities approach
Core to economic output, properly measured
Core to intergeneration entitlements

10. BOOKS
WWW.DIETERHELM.CO.UK