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HELM TALKS: Natural Capital Lecture 1

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Dieter Helm's lecture series on Natural Capital

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HELM TALKS: Natural Capital Lecture 1

  1. 1. 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?
  2. 2. 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
  3. 3. 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?
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. SUMMARY Natural capital ECOSYSTEM SERVICES OUTPUTS VALUES DISCOUNT RATE. Hard concept Capabilities approach Core to economic output, properly measured Core to intergeneration entitlements
  9. 9. BOOKS WWW.DIETERHELM.CO.UK

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