"European movements for degrowth, decroissance, are rooted in the idea that the perpetual growth assumption built into modern economics fails to take into account the depletion of natural capital. Hence the importance of sustainability." - The end of progress

What is natural capital?


2 Answers 2


Got this definition from Investopedia.

"DEFINITION of 'Natural Capital'

A reference to the stock of natural resources, such as water and oil. Unlike other forms of equity (such as machines and buildings), which can be created on a regular basis, many natural resources are nonrenewable. Natural capital includes many resources that humans and other animals depend on to live and function, which leads to a dilemma between depleting and preserving those resources."

Simply put, Natural Resources are synonymous to Natural Capital.

The quote is saying that the assumption in modern economics fail to take into account the negative effect that their industry has on the environment.

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    $\begingroup$ Your final paragraph seems to be incorrect - it's the opposite of what those movements are about. $\endgroup$
    – 410 gone
    Aug 10, 2016 at 5:41

Natural Capital is an analytic accounting approach: it is a system of putting a monetary value on environmental assets such as ancient woodland. It is also the name of those assets, within that approach. So it's one way of internalising the externalities of environmental change, within macroeconomic indicators.

For more, see in particular the work of Paul Ekins, including "A Framework for the practical application of the concepts of critical natural capital and strong sustainability" (pdf)

The philosophy of decroissance - of deliberately engineering a decline in traditional economic growth indicators - is one attempt to find an optimal and sustainable economic path, taking into consideration both the traditional economic indicators such as year-on-year changes in GDP, and changes to the population's wellbeing, together with changes to the national asset base, which includes changes in Natural Capital.


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