2014 Vol.1

Toward the implementation of social decision making based on evaluation of natural capital

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Since last year in Japan and elsewhere, the economic concept of capital has been applied to nature, and the idea of “natural capital” is already appearing in policy and business contexts. In a number of fields, there are calls to make decisions based on a quantitative evaluation of natural capital. In fact, discussions on evaluating natural capital have been going on for a long time; it is only the term “natural capital” that is new. There has been debate on how to evaluate natural processes in the fields of environmental protection,national land management, agriculture, and forestry. At the 1992 Rio Earth Summit, the “Integrated Environmental and Economic Accounting” system was adopted. In the 2005 Millennium Ecosystem Assessment, the flow of natural capital was treated as “ecosystem services.” In 2012,”EU Biodiversity Strategy to 2020″ recommended the inclusion of natural capital in national accounts. Discussions have been going on for quite some time, centered in Europe. However, this is not to suggest that there have been no moves to take up the idea of natural capital in Japan as well. Since 2001, when the Science Council of Japan reported on the evaluation of the multifunctional roles of forests and agriculture, appreciation of the benefits of nature, such as the role of forests in preventing disaster and the role of agriculture in watershed protection, has spread. Thus, in agricultural policy and corporate social responsibility activities, we are beginning to see initiatives to preserve and manage natural capital. These initiatives are based on quantitative evaluations. This trend in social decision making based on the quantitative evaluation of multifunctionality has many points of difference from the debate in Europe. It is interesting that practical moves are being made to maintain and manage national lands based on assessments of economic value. This Japanese-style move to implement social decision making based on the evaluation of natural capital brings a new perspective to the evaluation of natural capital. This approach has been debated in Europe and the United States. We hope that Japanese developments will provide some useful insights into measures that promote resource mobilization for management of natural capital in countries around the world.