This article was originally published on the Financial Times.
“…At a recent meeting of the World Economic Forum’s Global Future Councils in Dubai we discussed what it would mean for a country to be “future prepared” when it comes to environmental and natural resource security. Three dimensions will matter for leadership and ‘preparedness capacity’ in this regard.
The first is the management of the stock of natural capital. The idea of a natural capital account, alongside the more traditional economic national accounts, is far from new and is part of a push to encourage countries to monitor their wealth, not just their income. But significant challenges still remain in a “natural wealth management” strategy for a country. Natural capital is typically embedded in complex dynamic systems and in real options whose value increases with volatility, making the capital stock variable over time, complicating the valuation of future ecosystem services.
The sustainable management of this natural capital requires us to rethink its governance, yet few environmental and natural resource ministries are set up to do so, particularly given the siloed nature of the portfolios they manage, divided by resource type and therefore unable to address increasingly complex interdependencies and volatility…”
Read on at: the Financial Times.