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Natural Capital: Managing Resources for Sustainable Growth


Key Messages • Sustainable management of natural capital underlies green growth in key sectors—such as agriculture, manufacturing, and energy— and is vital for resilience and welfare gains. • Different resources require different types of policies. For extractable but renewable resources, policy should center on defining property rights and helping firms move up the value chain. For cultivated renewable resources, policy should focus on innovation, efficiency gains, sustainable intensification, and “integrated landscape” approaches.


eeting peoples’ needs for food, fuel, and fiber depends on sound m a n agement of t he n at u ra l capital—agricultural lands, forests, water, fisheries—on which production of these goods depends. Manufactured goods also depend on sustained production from natural capital, such as subsoil assets. But what exactly is natural capital? The term refers to the stock of natural resources that provides flows of valuable goods and services. Major types of natural capital include

• The elements of natural capital cannot be regarded in isolation. Integrated landscape approaches can increase production of both “regulating” and “provisioning” services of natural capital. • In some cases, growth and green outcomes— such as cleaner air, cleaner water, less solid waste, and more biodiversity—will involve tradeoffs. But not all of these tradeoffs are inevitable: innovation, which can be supported through smart subsidies, can help minimize or eliminate some of them.

agricultural lands; subsoil assets (oil, gas, coal, and minerals); forests; water; fisheries; and the atmosphere.1 Goods and services provided by natural capital underpin conventionally measured economic growth by providing inputs to agriculture, manufacturing, and services and by increasing the productivity of agriculture and the reliability of infrastructure services through climate control. Complementing natural capital with human, physical, and social capital greatly increases its productive capacity. But the 105

Inclusive Green Growth  
Inclusive Green Growth  

As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that may or may not b...