Natural Capital

Dieter Helm does an excellent job of lucidly explaining the concept of Natural Capital — a subject unfamiliar to most readers, most of which myself. Helm’s basic concept is to put an economic value on environmental goods and services such as clean water, forests, recreational spaces etc, such that governments would be compelled to account for them in their budgets. This would protect these environmental services and put a halt to the ‘tragedy of the commons’ — the abuse of natural resources as a result of lacking ownership and thus incentives for maintenance — a process which is running rampant worldwide.

The book begins with a mantra: explaining the mess we are in and why we have to change our approach to evaluating the environment. It then moves on to a more detailed discussion of Natural Capital. In this, it is unique among books concerned with the environment — of which I have read many. Helm makes a convincing case for discrediting the “save everything” mantra, instead advocating a pragmatic approach of compromise, held up by the valuation of assets central to the concept Natural Capital. I challenge anyone to not be an advocate for Natural Capital after reading this book.

Helm appealed to the environmentalist and the pragmatist in me, covering the complicated aspects of accounting for cross-generational costs, and explaining how his approach might be implemented in our economy. He further takes a very positive tone, detailing examples of where this process has been put to use, and how quickly and definitively it can effect progress.

Helm slightly dodges the issue of politics and time scales. If it really is as simple as he makes it out to be, why isn’t this approach to our environment already incorporated into our countries’ political agenda? Nevertheless, Helm is an economist, and it is an unreasonable expectation for the book to cover this in any sort of detail.

I would highly recommend this book to anyone interested in economics or climate change. The author’s abundant knowledge and passion come through in his writing, and his argument is a thought provoking one: it compelled me to think about the subject in detail and accept his argument, and ultimately enlightened me in an area I knew very little about.

For more information on the book, see Natural Capital by Dieter Helm.