Restoring Natural Capital: Definitions and Rationale

JAMES ARONSON, SUZANNE J. MILTON, AND JAMES N. BLIGNAUT

The restoration of natural capital is arguably one of the most radical ideas to emerge in recent years, because it links two imperatives—economics and ecology—whose proponents have been at loggerheads for decades. In economically developed and developing countries alike, however, we have to acknowledge that humans have transformed ecosystems to the extent that the supply of life-essential ecosystem goods and services is seriously threatened (Wackernagel and Rees 1997). This fact is summarized by two conclusions from the Millennium Ecosystem Assessment (MA 2005f):

Over the past 50 years, humans have changed ecosystems more rapidly and extensively than in any comparable period of time in human history, largely to meet rapidly growing demands for food, fresh water, timber, fiber and fuel. This has resulted in a substantial and largely irreversible loss in the diversity of life on Earth.

The changes that have been made to ecosystems have contributed to substantial net gains in human well-being and economic development, but these gains have been achieved at growing costs in the form of the degradation of many ecosystem services, increased risks of nonlinear changes, and the exacerbation of poverty for some groups of people. These problems, unless addressed, will substantially diminish the benefits that future generations obtain from ecosystems.

We argue that natural capital has become a limiting factor for human well-being and economic sustainability (Costanza and Daly 1992; Daly and Farley 2004; Aronson, Clewell, et al. 2006; Farley and Daly 2006; Dresp 2006) and advocate that the restoration of natural capital is the most direct and effective remedy for redressing the debilitating socioeconomic and political effects of its scarcity. Conservation, and reducing waste are indispensable, but likewise the investment in the restoration of natural capital that augments the pool of natural capital stock and hence stimulates the supply (or flow) of ecosystem goods and services (Repetto 1993; Cairns 1993; Jansson et al. 1994; Clewell 2000). The restoration of natural capital includes ecological restoration, but it goes further. The restoration of natural capital also considers the socioeconomic interface between humans and the natural environment. By functioning within this interface, the restoration of natural capital builds bridges between economists and ecologists and thereby offers new alternatives for ecologically viable economic development. It also offers new hope for bridging the worrisome gaps between scientists and nonscientists and between developed and underdeveloped countries.

Definitions of Terms and Concepts

Here we define a number of key terms pertinent to the concepts of restoration and natural capital, and explain how this focus complements related approaches to ecosystem repair and raises awareness of the need to make development ecologically, socially, and economically sustainable.

Natural Capital

Generally, development and the improvement of life quality are not possible without a growing asset, or capital, base. The concept c apital, however, is not homogenous since one can distinguish between five principal forms of capital (Rees 1995; MA 2005f):

• Financial capital (money or its substitutes)

• Manufactured capital (buildings, roads, and other human-produced, fixed assets)

• Human capital (individual or collective efforts and intellectual skills)

• Social capital (institutions, relationships, social networks, and shared cultural beliefs and traditions that promote mutual trust)

• Natural capital, an economic metaphor for the stock of physical and biological natural resources that consist of renewable natural capital (living species and ecosystems); nonrenewable natural capital (subsoil assets, e.g., petroleum, coal, diamonds); replenishable natural capital (e.g., the atmosphere, potable water, fertile soils); and cultivated natural capital (e.g., crops and forest plantations)

Some clarification is required to distinguish between renewable, replenishable, and cultivated natural capital. Renewable natural capital is the composition and structure (stocks) of natural, self organizing ecological systems that, through their functioning, yield a flow (or natural income) of goods and services. These flows are essential to life in general and are extremely useful to humans and all other species. Replenishable natural capital consists of stocks of nonliving resources that are continually recycled through their interaction with living resources over long periods (such as the interaction between surface mineral components and living organisms that produces fertile, stable soil). The condition of renewable natural capital stocks obviously influences the quality, quantity, and renewal rate of these essential, replenishable, natural capital stocks, and vice versa.

Cultivated natural capital arises at the dynamic interface of human, social, and natural capital. This interface produces agroecological systems and amenity plantings that may be more or less self-sustaining, depending on their design and management. Cultivated capital forms a continuum between renewable natural capital and manufactured capital and may be closer to one or the other, depending on the degree of transformation of the landscape, the genetic material, and the subsidies (e.g., energy, water, nutrients, seeding, weeding, pest control) required for maintaining the system. It is often forgotten that, in all cases, both cultivated resources and manufactured capital are derived from renewable, replenishable, and nonrenewable natural capital. This transformation of natural to human-made capital is "mining" the stock of renewable, replenishable, and nonrenewable natural capital, thereby reducing it for future use, unless it is restored where it has been used up or degraded.

Ecological Restoration and Restoration of Natural Capital

The Society for Ecological Restoration International's Primer on Ecological Restoration (SER 2002) defines ecological restoration as "the process of assisting the recovery of an ecosystem that has been degraded, damaged, or destroyed," but it is a much broader concept. The goal of ecological restoration, according to the SER Primer, is a resilient ecosystem that is self sustaining with respect to structure, species composition, and function, while integrated into a larger landscape and congenial to "low impact" human activities. Ecological restoration "is intended to repair ecosystems with respect to their health, integrity, and self-sustainability" (SER 2002). An associated discipline is ecological engineering, which involves restoring and creating (thus, engineering) sustainable ecosystems "that have value to both humans and nature" (Mitsch and Jørgensen 2004). Lewis (2005) cogently adds that ecological engineers attempt to address both the restoration of damaged ecosystems and the creation of new sustainable systems "in a cost effective way."

The restoration of natural capital is any activity that integrates investment in and replenishment of natural capital stocks to improve the flows of ecosystem goods and services, while enhancing all aspects of human well-being. In common with ecological restoration, natural capital restoration is intended to improve the health, integrity, and self-sustainability of ecosystems for all living organisms. However, natural capital restoration focuses on defining and maximizing the value and effort of ecological restoration for the benefit of humans, thereby mainstreaming it into daily thought and action and promoting ecosystem health and integrity. Natural capital restoration activities may include but are not limited to (1) the restoration and rehabilitation of terrestrial and aquatic ecosystems; (2) ecologically sound improvements to arable lands and other lands that are managed for useful purposes; (3) improvements in the ecologically sustainable utilization of biological resources; and (4) the establishment or enhancement of socioeconomic activities and behavior that incorporate knowledge, awareness, conservation, and management of natural capital into daily activities.

Those motivated by a biotic rationale for restoration, as explained by Clewell and Aronson (2006), and whose concern lies with the perpetuation of biodiversity, may raise a concern here. They may argue that natural capital restoration's human-centered focus will obscure an essential insight of the restoration and conservation movements—that ecosystems and all the processes and species they contain are worth restoring and preserving "for their own sake," regardless of their economic (or other) value to humans. This is true (see chapter 2); however, in order to mainstream ecological restoration into the economy (chapter 34), it is also necessary to show how humans will benefit directly from it and how the interaction between economic and ecological systems could be improved through the restoration of natural capital.

Rehabilitation and Reallocation

In figure 1.1, rehabilitation is aligned with restoration in that both generally take an "original" (preanthropogenic era, sensu Crutzen and Stoermer 2000) or historic, culturally acceptable ecosystem or landscape as a reference for the orientation of interventions to halt degradation and initiate more sustainable ecosystem trajectories. By contrast, reallocation is a term that describes what happens when part of a landscape, in any condition is assigned a new use not necessarily bearing any relationship to the structure or functioning of the preexisting ecosystems. Whereas, traditionally, restoration seeks a complete or near-complete return to a preexisting state (although this is being challenged as a result of the consequences of global climate change), by reassembling the species inventory, stresses, and disturbances, as far as possible, rehabilitation focuses on repairing ecosystem functions, in particular raising ecosystem productivity and services for the benefit of humans.

Where the spatial scale of damage is small and the surrounding environment is healthy in terms of species composition and function, amelioration of conditions in the damaged patch, together with ecological processes such as seed dispersal and natural recolonization by plants and animals can lead to full recovery of resilient, species-rich ecosystems that provide a range of services valued by humans (chapter 21)-including aesthetic, cultural, and what we may call "spiritual" services. However, in heavily modified ecosystems, which have crossed one or more thresholds of irreversibility (May 1977; Westoby et al. 1989; Aronson et al. 1993; Milton et al. 1994; Whisenant 1999; Hobbs and Harris 2001; Walker et al. 2002), restoration of the preexisting species inventory may no longer be feasible. In such cases, only rehabilitation and reallocation are likely to remain as viable, cost-effective alternatives, and any actions to reverse environmental damage should be determined by socioeconomic decision making that takes into account the spatial scale of the degradation, the present and future value of the resource to humans, and the condition and composition of the surrounding ecosystem.

Ecological restoration, rehabilitation, and reallocation can all contribute to the restoration of natural capital and be pursued simultaneously in different landscape units. Throughout this book, the term restoration (and hence, natural capital restoration) is often used so as to include rehabilitation, whereas reclamation is not employed because of prior connotations (Aronson et al. 1993; SER 2002).

Rationale for Restoring Natural Capital

We now present some basic principles, following Clewell and Aronson (2006), that collectively provide a rationale for the restoration, sustainable use, and enhanced protection of natural capital. They serve as a template that the editors and authors will use for the evaluation of the case studies, regional overviews, and other contributions in this volume.

Principle 1. In setting targets for the restoration of natural capital, our premise is that people of all cultures depend on the products and services derived from natural ecosystems to provide much of their sustenance and well-being (Daily 1997; Balmford et al. 2002). It follows that an improvement in the quantity or quality of natural ecosystems increases human well-being, while degradation causes the converse. We assert that self-sufficient, self-organizing natural ecosystems are appropriate restoration targets because, despite the deficiencies in our understanding of natural ecosystem functioning (Balmford et al. 2005), it would appear that they provide most ecosystem services (e.g., water purification, flood control) and some goods (e.g., natural pasture, marine fish) more cleanly, efficiently, and inexpensively than human-designed systems, such as "improved" pasture or aquaculture (Costanza et al. 1997; Balmford and Bond 2005). In the context of semicultural or cultural landscapes, and human-designed ecosystems (see, for example, chapter 16), the broader term of restoring natural capital is more readily applicable than ecological restoration, per se.

Principle 2. It has been remarked that anthropogenic global changes, including climate change, have profound implications for ecological restoration and biological conservation (Harris et al. 2006; Thomas et al. 2004), and the overlapping field of ecological engineering (Mitsch and Jørgensen 2004; Kangas 2004) that deals with the design and creation of ecosystems, as well as their restoration. However, we argue that the only durable way to increase ecosystem services is by restoring the functions (MacMahon 1987; Luken 1990; Falk 2006) and processes of self-sustaining ecosystems. Such systems will adapt to climate change and evolve as well or better than "designer ecosystems." Furthermore, restoring natural ecosystems on a large scale may actually help mitigate the effects of climate change (Clewell and Aronson 2006). Finally, climate change scenarios in no way alter the obvious benefits of restoring natural capital.

Principle 3. Costs of restoration of natural capital increase as a function of the spatial extent, duration, and intensity of environmental damage, and with the complexity of the target ecosystem or socioecological system (George et al. 1992; Aronson et al. 1993; Milton et al. 1994). This cost increase reflects the increasing number of interventions required to achieve restoration as damage initially depletes the plants and animals (for example, overfishing, deforestation), and then destroys the physical habitat (for example, through pollution, soil erosion, hydrological or climatic changes), not to mention the preexisting ties and links between people and the landscapes in which they lived and worked. Like ecological benefits, social and economic benefits from investments in restoring natural capital will generally take longer to be realized where not only ecological injuries but also adverse socioeconomic changes have been more profound and long lasting.

Principle 4. Natural capital and manufactured capital are complementary. Increasingly, the limiting factor for economic development is natural capital, and not manufactured capital, as it used to be.

Principle 5. Extinct species can never be recovered nor lost complexity fully understood or restored. Therefore, it is better to conserve or use resources sustainably than to restore, and better to invest in restoring natural capital during the earlier stages of resource degradation and loss of sustainability in managed systems than to postpone restoration activities.

Contribution

Here we have indicated that the restoration of natural capital includes ecological restoration, but it also considers the socioeconomic interface between humans and the natural environment, including managed systems such as food, fodder, tree fiber, and fish farms, and the awareness of the importance of natural capital in the daily lives of people. The recognition of the real possibility of restoring natural capital helps build bridges between economists and ecologists who can then develop a set of information and hypotheses to help develop new and sustainable economic pathways while also repairing some of the ecological and socioeconomic damage done in the past. As has been indicated, restoration and rehabilitation are not the only ways of developing these pathways. Conservation and revised management of resources and anthropogenic systems, as well as the reduction in consumer demand, among other things, are also vitally important. In the following chapters, various authors including, among others, economists and ecologists from various countries consider the theoretical, commercial, financial, and practical implications of restoring natural capital. The goal is a consilience of ecologists and economists offering practical strategies for redressing the debilitating socioeconomic and political effects of declining natural, social, and cultural capital worldwide. This poses an immense ethical challenge, as well as new conceptual approaches and revised strategy planning. In chapter 2, therefore, we reflect on the restoration of natural capital from an ethical vantage point before returning to economic, ecological, and political considerations.