The interest on nature's bank account: Natural capital provides natural income in terms of goods and services.
The points to remember
- Natural income is what natural capital yields: the 'interest' on nature's bank account.
- It comes as goods: things we take, such as fish, timber, fruit, nuts, honey and rubber.
- And as services: things nature does, such as climate regulation and flood prevention.
- Income can be economic: goods sold, or tourists paying to visit.
Remember it as: Capital is the tree; income is the fruit, the wood that grows, and the shade.
Real example: in 1713 Hans Carl von Carlowitz, who ran the mines of Saxony in Germany, warned that the forests were being cut faster than they grew. He argued that only as much wood should be cut as grows back. That idea, living on the forest's income, is where the word 'sustainability' comes from.
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Every piece of natural income is either a good (taken away) or a service (done in place).
Goods and services
- Goods are taken away and can be counted or sold: timber, firewood, fish, berries, charcoal, tea.
- Services happen while the ecosystem stands: storing carbon, holding soil, filtering water, cooling.
- More services: habitat for wildlife, pollination, oxygen, reducing floods.
- Cultural services: recreation, tourism, education, spiritual value.
- Ecosystems in cities give income too: cleaner air, cooler streets, higher house prices.
Real example: the Danube begins as springs in the Black Forest. The forest gives timber to sell, but it also keeps that water clean and holds the soil on its steep slopes.
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Read the question's words: Papers ask for natural income in different words. Each word wants a different kind of answer.
Which answer does the question want?
- Asked for an ecological service? Give what nature does (carbon sink, holds soil), never a good.
- Recreation and tourism count as cultural services, but not when an ecological service is asked for.
- 'Photosynthesis' alone is not enough: say what it does (absorbs CO2, releases oxygen).
- Asked for a product? Name the product: rooibos tea, not just 'rooibos'.
Ecological service: accepted
- Absorbs CO2: a carbon sink
- Roots stop soil erosion
- Habitat for wildlife
- Filters water / keeps the water table up
Not accepted here
- Timber or food (goods)
- Tourism or recreation (cultural)
- 'Photosynthesis' alone
Real example: around Darjeeling in India, tea bushes cover the hillsides. Asked for a commercial product, write 'Darjeeling tea', the leaves picked and sold; 'tea bushes' names the capital, not the product.
Economic value: 'Economic value of a forest as natural capital' wants something that earns money: timber, charcoal, rubber, berries to sell, or tourism.
Natural income is sustainable only while the capital that makes it is kept.
Living on the income
- Take only the income and the capital stays the same: it gives income again next year.
- Take more than the income and the capital shrinks: next year's income is smaller.
- For living capital, the income is the new growth: the extra fish, the extra wood each year.
A simple case: A bamboo grove grows new canes every year. Cut only the new canes and the grove stays the same size: you live on its income. Cut the whole grove and the income stops.
Real example: in Alaska, salmon fishing stops each season once enough fish have passed upstream to spawn. The breeding stock, the capital, is kept, so the catch, the income, returns year after year.
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How this comes up: Paper 1, from the resource booklet: outline ways an ecosystem is natural capital, one point per mark.
Central Park covers 341 hectares in the middle of New York City, with woods, lakes and lawns.
Outline three ways in which Central Park is considered natural capital.
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