Natural Capital and Policy: What, Why and How

Natural Capital and Policy: What, Why and How

Governments have a significant role in creating an enabling environment for a capitals approach and safeguarding biodiversity. By facilitating a dialogue, governments from around the world can share best practices strengthen their enabling role.

This paper explains what natural capital is, why it is relevant for biodiversity policy, and how it can help to achieve the global goal to be carbon neutral, nature positive and equitable. It is written to inform leaders, policymakers and decision-makers that are negotiating a new deal for nature and people in the context of the 15th Conference of the Parties to the Convention of Biological Diversity (COP 15 CBD) and the 26th Conference of the Parties on Climate Change. It aims to demonstrate how natural capital approaches can help to mainstream biodiversity into all decisions taken by business, financial institutions and the whole of government. The examples of government actions that are presented throughout the document show that natural capital is a proven strategic lens to integrate the value of nature in social and economic decisions for a more sustainable and just world.

Key messages

Our way of living is at risk and the world has to redirect its course. As set out in the update of the Zero Draft of the Post-2020 Global Biodiversity Framework, transformational change is needed to reverse nature loss and ensure nature’s health and resilience to support our economics, wellbeing and livelihoods.

To achieve transformational change, it is useful to frame nature as an asset (‘capital’) and biodiversity as a characteristic of those assets that enables them to be more productive and resilient. Ecosystems are a useful way of breaking down natural assets to make their value visible in all decision-making by business, financial institutions and the whole of government.

Natural capital approaches frame the value of nature within the context of economic prosperity and human wellbeing. This framing empowers organizations and nations to integrate the value of nature in their decision-making by fostering a better understanding of human impacts and dependencies on nature, as well as highlighting the potential for investments in nature to help achieve the Sustainable Development Goals.

Government interventions are essential for accelerating and scaling up this transition because they can create the enabling environment for change. To create this environment governments possess five levers: value and embed nature; adopt targets; integrate policies; reform incentives; and empower action. By adopting and promoting a natural capital approach, governments can unlock tools and solutions that are needed to mainstream the value of biodiversity into all policies and decision-making by business, finance and government.

This paper features more than 60 examples of how policymakers across the globe working in diverse policy areas – ranging from conservation to planning, economy and development – use natural capital approaches to take more informed decisions that help to reverse nature loss. Together, these examples testify to the power of framing nature as an asset to promote better understanding of threats to nature as well as people’s dependence on nature. They provide a compelling library of best practices to help achieve the Sustainable Development Goals and mainstream nature into the policies of the whole of governments as well as of business and finance institutions.

This paper has been produced as part of Capitals Coalition’s Government Dialogue on Natural Capital Project.

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