Posted at 9:25 AM
Guest blog post by Jane Callen, Economic Information Officer, Economics and Statistics Administration
The U.S. Department of Commerce created and unveiled a natural capital website to provide resources and information to businesses seeking to incorporate natural capital into their planning and operations. Natural capital refers to the Earth’s stock of natural resources – air, water, soil, and living resources – that provide a range of goods and services on which the global economy depends.
During the course of 2015, the National Oceanic and Atmospheric Administration (NOAA) and the Economics and Statistics Administration (ESA) led an inter-agency effort, traversing the country to host four regional roundtables, culminating in a final National Summit in Washington, DC. It was during the National Summit - held at the World Bank headquarters - that Commerce Department Chief Economist Ellen Hughes-Cromwick unveiled the website to an audience representing the private-sector, non-governmental organizations (NGOs), academia, and state and federal government officials, many of whom attended at least one of the regional roundtables.
The Commerce Department’s natural capital website begins by exploring the definition of natural capital, including shedding light on some of the confusion around how it differs from sustainability. In our subsection “Natural Capital and Market Failures,” we delve into the notion that nature and the ecosystem services it provides are inputs used by business, and that traditional economic concepts, such as stock and flow, can in fact be applied to natural capital. It is important to factor the cost of natural capital into a firm’s decision-making. The “Contexts and Trends in Ecosystem Services” section provides discussion on the direct and indirect drivers of change and trends in ecosystems. We address why businesses should care, by analyzing the relationship between businesses and natural capital assets – businesses not only rely upon these assets, they also impact them. For example, agriculture relies on the availability of water, but fertilizers in water runoff can affect quality of downstream animal and plant life. Under “Challenges and Solutions,” we share and explore what we heard from participants during the regional business roundtables, such as issues with data and methodology; how to make the business case; the need for incentives; and the lack of awareness.
The natural capital regional business roundtables comprised the heart of our work in 2015 and the website section devoted to the roundtables provides great detail about what transpired. The “Case Studies” section highlights examples from Ford Motor Company, Kraft Foods, Costco, Bechtel, Clean Water Services, and Dow Chemical. Under the “Resources” tab, we offer links to myriad information sources aimed at assisting businesses in considering/incorporating natural capital into their decisions and operations. Examples of such resources include data from the federal government and elsewhere as well as additional information from government, academia, and other sources.
The Commerce Department’s new natural capital website is a dynamic resource and will undergo continuous content updates as information becomes available. We encourage you to visit now and return often! We welcome your feedback.