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Written by Paul Gehres, Account Manager at Inline Policy


“Natural capital — a term for the earth’s natural resources and support systems that benefit human society — is the underlying focus of our environmental laws and policies. The Clean Air and (Clean) Water Acts of the US and UK are two aptly-named examples of previous policies designed to protect natural resources. At present, in Europe, the EU Circular Economy Package is a comprehensive set of measures and targets aimed at reducing our net consumption of raw materials (or ‘natural capital’). Likewise, climate change regulation and initiatives (e.g. the EU Emissions Trading System, EU Energy Efficiency Directive, EU Renewable Energy Directive) are focused on reducing our activities that deplete specific types of natural capital (specifically fossil fuels and rainforests, which sequester CO2 very effectively).

Beyond its implicit inclusion in single issue policies, natural capital is now a formal policy issue under consideration by governments, businesses, investors and NGOs. Natural capital policies and initiatives now exist across the UK, EU, and international levels. While still piecemeal at present, the integration of a natural capital ‘mindset’ into policy could yield a more holistic set of future environmental policies which are better suited for (1) understanding the environmental trade-offs of human activity and (2) informing strategic business and investment decisions. For corporates and investors, the climate change landscape changed dramatically between the launch of the Greenhouse Gas Protocol [i]  in 2001 and the subsequent adoption of national and regional regulation in the lead-up to last year’s COP21 Paris Agreement. While natural capital assessment is a young discipline, both corporates and investors must be ready for a future where natural capital impacts and dependencies are assessed, reported, and possibly taxable.

This piece will recap: the launch of the Natural Capital Protocol; natural capital’s inclusion in current UK government policy; the impact of Brexit; and some potential directions that future natural capital policies could take…”

Read on at: InLine