The organization/ department in brief

The Netherlands Ministry of Agriculture, Nature and Food Quality is responsible for policies ranging from agriculture, fisheries, food, biodiversity, nature and natural capital. 

Why was this undertaken?

When the Natural Capital Protocol was published, in a short time two opposing articles were published in Dutch newspapers. One in favor of the Protocol, and one against.

Following the discussion between the Ministry and one of the authors it was decided to fund a small project with the aim to organize a dialogue between ambassadors and opponents of the natural capital concept. The project was conducted by Jan Paul van Soest (De Gemeynt), in collaboration with Caroline van Leenders (Netherlands Enterprise Agency). Fifteen people coming from different ‘worlds of the natural capital realm’ were interviewed and brought together for a dialogue. With the aim to learn from each other’s positions and better understand the do’s and don’ts of  implementing natural capital.

What was the scope?

The Natural Capital Dialogue project covered a series of interviews with thought leaders and practitioners on the use of the concept of Natural Capital, and sought to build a collective perspective on the use of the concept and terminologies. Part of the process was conducting a survey on Natural Capital in a wider community of Dutch thought leaders than those who were interviewed.

One of the outcomes was a set of ‘instructions for use’ that discerned three levels in the ecology-economy debate, in which Natural Capital could play a major or minor role. The project helped to get a common understanding, and to steer away from fruitless polarized and interpretational debates.

What was the role of the Government?

The Ministry of Agriculture, Nature and Food Quality was initiator and funder of the project. The Project definition was developed in collaboration with the Netherlands Enterprise Agency (RVO), IUCN Dutch Committee, BothEnds (a Dutch NGO that works – together with environmental justice and human rights groups from poor and developing countries – towards a sustainable, fair and inclusive world).

What were the results?

The key results of the Dialogue where the so-called ‘instructions for use’. To assess the usefulness of the concept ‘natural capital’, the end report of the project states, it’s helpful to distinguish three levels in the public debate and its broader ramifications, as discussion makes way for practice.

1. Level 1 is perceptual: a shift in ideas and awareness about the interrelationships between economy and ecology. It can potentially be the starting point of a paradigm shift.

2. As the concept becomes more widely adopted, a second, operational level, comes into view, in which the notion starts to underpin choices and decisions, by consumers, investors, engineers and, with time, executive boards. Now it’s been adopted at the ‘micro’ and ‘meso’ levels, the concept  starts leveraging the environmental impact of our economic activity.

3. With growing acceptance and use in actual decision-making, there comes a point when the concept begins to steer, or at least influence, the ‘macro’ or ‘systems’ level, affecting the shaping of legislation and policy. As the sum total of impacts on nature becomes clearer, at ‘Level 3’ a more fundamental debate is triggered on the very nature of today’s economy and what we mean by sustainability. This in turn reflects back on ‘Level 2’activities, which are now pursued with greater vigour.

Below for each of these three levels the characteristic use of the natural capital concept is described, the most likely opposition to this use and possible remedies.

1. Communicative use of the term ‘natural capital’

The concept of natural capital can help alter people’s perceptions and so can serve as a useful, persuasive term in communications, especially for certain target groups such as the private sector. One of its strengths is that it highlights interrelationships and interdependencies, transforming conservation and use of natural resources from ‘nice to have’ into ‘need to have’. For commerce and industry this means there’s a business case for change, which can prompt those working there to bring more fundamental debates about economy and ecology to the table in robust strategic and decision-making settings. Similar considerations hold in government and administrative circles. Even though the language of ‘natural capital’ is very much business-oriented, governments may also be open to the economic frame to which the concept appeals.

Reasons against

Not everyone is open to framing environmental problems in economic, monetary or business terms, which may make use of the concept counterproductive. Without further elaboration of its background and the kind of milieus to which it is directed, the idea of ‘natural capital’ can cause aversion – because it’s held to ignore the intrinsic value of nature, for example – and turn potential allies into sceptics or even antagonists. Similarly, people may resist the very idea that things of value like nature and natural resources should or must be given a price, marring the communicative value of the term ‘natural capital’ as such.

Remedies

When communicating about natural capital don’t do it primarily in ‘technical’ terms, but set out the broader picture. Position the concept relative to other elements of conservation policy and in the broader context of the transition to a low, zero or positive impact economy.

2. Operational use of ‘natural capital’

Once the concept of natural capital is operationalized it can serve as a useful tool in discussions, decisions and action plans.

One of the concept’s strengths is that it covers essentially all environmentally relevant stocks, thus creating a broader perspective for action. This is certainly vital today, with ‘sustainability’ being taken as virtually synonymous with ‘climate’, while other key factors like water abstraction, biodiversity loss and disrupted mineral cycles are generally sidelined. Worse still, certain climate policies – such as massive use of biomass for energy and the drive for ‘negative emissions’ – risk putting added pressure on issues like water and biodiversity conservation.

The notion of ‘natural capital’ creates scope for operationalizing any and all of the issues at the heart of sustainability, focusing on those deemed most relevant and opting for the kind of operationalization that best matches the organization’s particular style.

One key issue for discussion here is what party or parties should be mainly addressed when it comes to operationalizing the concept and getting such a move funded. If wiser use of natural capital is seen as important mainly for commercial or business-strategic reasons, then operationalization is obviously first and foremost a matter for business and industry. It can also be argued, though, that particularly in the early days it’s a the government’s job to put its weight behind developing tools and strategies that can be picked up and taken forward by market players.

Reasons against

Business and industry are open to forms of operationalization that fit in with broader systems already in use today. If they get the idea that working with ‘natural capital’ means existing procedures need to be overhauled, they’ll be put off. The same may hold if they think they’ll have to start working with a formalized system or protocol that needs to be strictly adhered to and that may only be feasible for big companies with specialized staff, not for small and medium-size businesses. For many actors, particularly in business, it’s confusing and difficult there are so many approaches and concepts circulating (Natural Capital, Circular Economy, Sustainable Development Goals, etc., etc.) that are not necessarily that easy to relate to one another. Unless it’s placed in a broader context, natural capital is ‘just another tool’, drawing away from its in many ways unique potential. Finally, in these circles too there may be a fear of values being unnecessarily ‘monetized’, which means it’s wise to stress that monetization is just one of the options or means available, rather than a must or an end in itself.

Remedies

Communicate clearly the aim for which the concept of natural capital is being used and also explain that the ‘macro’ or ‘system’ level is not what is being addressed here. Organize a process to clarify the numerous concepts and methodologies in use, by supporting a Community of Practice among a group of companies or institutions, for example. At the very least, make clearly explicit how ‘natural capital’ is to be situated in the wider scheme of things.

3. Using ‘natural capital’ for political agenda-setting

Perhaps more than anything else, it’s use of the concept ‘natural capital’ for getting the need for systemic change on the political agenda that’s contentious. It’s here, above all, that fundamental criticisms are voiced, with opponents arguing that the debate on economy and ecology needs to be held at the system level – which is scarcely the case at the moment – and that natural capital has no part to play here. Criticism may be more fundamental, though, with people saying that using the term ‘natural capital’ blocks a wider debate on the very nature of today’s economy, which can only exist by merit of all kinds of externalities being passed on to those without a voice, both today and in the future. More broadly, the term ‘ natural capital’ would suggest that the problems we’re facing can be resolved within the dominant economic model.

What these objections fail to appreciate, though, is the already common realization that truly sustainable development requires a solid change in the rules of the game, with it being well understood that social and political debates can no longer shy away from systems level thinking. We hear trendsetters in industry, business and finance stating ever more frequently and forcefully that current regulations and price incentives are failing to promote a greener economy and sometimes even holding it back. This group of frontrunners are on board for a drastic greening of the economy, and are indeed pushing for it wherever they can, but see themselves confronted at every turn with institutional frameworks (‘the rules of the game’) that are bogging them down. For this section of the business world, then, a social and political debate on the rules in force for using natural resources is something they are all too keen to see materialize.

So the question then becomes: how useful is the concept of natural capital for moving this debate from board-rooms and bar-rooms to political center stage? One of two courses can be adopted, but this needs to be made explicit and the consequences accepted:

Option 1: Reject use of the notion of natural capital for political agenda-setting, for the time being at any rate. This would mean positioning the concept more clearly as a tool primarily for Levels 1 and 2, avoiding it in Level 3 debates.

Option 2: Use the concept of natural capital in systems-level discussions, too. This means taking this explicitly to hand, preferably in a coordinated manner. The concept then needs to be used to elucidate the intimate relationships between economy and ecology and bring out into the open the requisite systemic changes – and as things move forward, how these are to be effectuated. A coalition of businesses, NGOs and government agencies then needs to be set up that is supplied with relevant knowledge and can start exerting real influence at the systems level. The seed for such a move towards political agenda-setting would have to be formed by parties already involved in and working with ‘natural capital’.

Reasons against 

Bringing the notion of natural capital into fundamental, systems-level debates on the interlinkages between economy and ecology risks damaging its value for use at Level 1: perceptions and views, and Level 2: behavior, action and decision-making. Conversely, without a fundamental debate on these issues there’s risk of the concept of natural capital itself being cast into doubt.

Remedies

Make an unambiguous choice on how the concept of natural capital is to be used – Levels 1 and 2 only, or Level 3, too – and position it accordingly.

Next steps

The insights of the Natural Capital Dialogue project will be used by the Ministry of Agriculture, Nature and Food Quality in the further development of its natural capital policy and approach.

Furthermore, the Netherlands Ministry of Agriculture, Nature and Food Quality, has offered IUCN support to use the survey developed for the Dialogue in the Netherlands in the context of IUCNs Natural Capital Policy development. For this, the survey will be translated and adapted to use in an international context, to give and impulse to the international debate.

Other

Link to the full report “Natuurlijk Kapitaal: lees voor gebruik eerst de bijsluiter”, 2018 (in Dutch).

Contact

Martin Lok (m.c.lok@minez.nl).