The Natural Capital Approach

The report proposes the Natural Capital Approach (NCA) as a method to quantify and value ecosystem services to reconcile economic and environmental imperatives. It evaluates the NCA against other management styles, reviews international and domestic initiatives, and suggests a spatially based informatics architecture. The authors recommend that Environment Canada lead a pilot study in the Red and Assiniboine River system in Manitoba to demonstrate the utility of the Canadian System of Environmental and Resource Accounts (CSERA) and ecosystem service valuation for policy design.

• The Natural Capital Approach (NCA) is defined as a method for identifying and quantifying the natural environment and its associated ecosystem services to improve decision-making regarding the management, preservation, and restoration of natural environments.
• The NCA is compatible with three other environmental management styles: the Economic Growth Approach, the Media-based Approach, and the Ecosystem Approach, though it differs from the former by treating natural and manufactured capitals as complementary rather than substitutable.
• China is developing a Green GDP Index to account for environmental degradation, with an initial 2004 study finding that pollution impacts caused economic losses of 511.8 billion Yuan, or 3.05 per cent of the national GDP.
• In Australia, the Australian Bureau of Statistics tracks environmental assets, but the system is limited to assets with identifiable owners, such as land and subsoil assets, excluding non-market ecosystem services.
• Research on Canada's boreal region using the Boreal Ecosystem Wealth Accounting System (BEWAS) estimated that the total non-market value of ecosystem services in 2002 was $93.2 billion, which is 2.5 times greater than the net market value of boreal natural capital extraction ($37.8 billion).
• The Canadian System of Environmental and Resource Accounts (CSERA) provides a foundation for NC measurement but currently lacks measures for ecological integrity and non-market ecosystem service values.
• The authors propose a spatially based NC informatics architecture using watersheds as the primary ecological subsystem, integrating remote sensing data with socio-economic statistics to quantify trade-offs between environmental priorities and economic development.
• The report recommends a joint IISD-Environment Canada pilot study in the Red and Assiniboine River system in Southern Manitoba to demonstrate how NC preservation, specifically of wetlands, can help recover Lake Winnipeg, which is described as the most eutrophic large lake in the world.

APA

Voora, V. A., & Venema, H. D. (2008). The Natural Capital Approach. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/natural_capital_approach.pdf

Chicago

Voora, Vivek Anand, and Henry David Venema. The Natural Capital Approach. International Institute for Sustainable Development, 2008. https://www.iisd.org/system/files/publications/natural_capital_approach.pdf.

Wikipedia

{{cite report |last1=Voora |first1=Vivek Anand |last2=Venema |first2=Henry David |title=The Natural Capital Approach |publisher=International Institute for Sustainable Development |date=31 March 2008 |url=https://www.iisd.org/system/files/publications/natural_capital_approach.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{voora2008natural, author = {Voora, Vivek Anand and Venema, Henry David}, title = {{The Natural Capital Approach}}, institution = {International Institute for Sustainable Development}, year = {2008}, month = mar, url = {https://www.iisd.org/system/files/publications/natural_capital_approach.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }