NATURAL CAPITALISM

The document introduces 'natural capitalism,' a proposed new industrial paradigm that values natural and human capital alongside financial and manufactured capital. It argues that conventional industrial capitalism is unsustainable because it treats nature as a free, infinite resource, leading to the rapid depletion of living systems and ecosystem services. To avert ecological and social disaster, the text proposes four interrelated strategies: radical resource productivity, biomimicry, a service-and-flow economy, and direct investment in natural capital.

• Conventional industrial capitalism is described as a 'nonsustainable aberration' because it fails to account for the value of natural and human capital, effectively liquidating its capital base and recording it as income.
• The document identifies four essential types of capital required for a functioning economy: human capital (labor, intelligence, culture), financial capital (cash, investments), manufactured capital (infrastructure, machines), and natural capital (resources, living systems, and ecosystem services).
• Natural capital is declining at an unprecedented rate, with significant losses reported in the last half-century: a fourth of topsoil and a third of forest cover have been lost, and freshwater ecosystems are declining by 6% annually while marine ecosystems decline by 4% annually.
• The 'natural capitalism' model is based on the premise that the environment is the primary envelope sustaining the economy and that future economic development is limited by the availability of life-supporting services that have no market substitutes.
• Radical resource productivity aims for 'Factor Four' (75% reduction) or 'Factor Ten' (90% reduction) in energy and materials intensity to slow resource depletion and lower pollution.
• Biomimicry involves redesigning industrial processes to emulate biological systems, moving away from high-heat, high-pressure, and toxic petrochemical methods toward low-temperature, solar-powered, and enzymatic reactions.
• A 'service and flow' economy proposes a shift from selling goods to providing services (e.g., leasing 'coolth' instead of selling air conditioners), which incentivizes manufacturers to create durable, upgradeable products and implement 'cradle-to-cradle' material cycles.
• Investing in natural capital is presented as a necessity for global security, as ecological destruction and resource shortages (such as water and fish) are linked to regional conflicts, social instability, and the creation of refugee populations.

APA

RMI (n.d.). NATURAL CAPITALISM. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter1.pdf

Chicago

RMI. NATURAL CAPITALISM. n.d. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter1.pdf.

Wikipedia

{{cite report |author=RMI |title=NATURAL CAPITALISM |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmindnatural, author = {{RMI}}, title = {{NATURAL CAPITALISM}}, institution = {RMI}, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }