Sustaining Development through Protecting 'Critical Capital': Stocks of Different Sorts of 'Capital' Are Integral to Society's Capacity for Sustainable Development. Steve Hatfield Dodds-Senior CSIRO Researcher and President of the Australia New Zealand Society for Ecological Economics-Explains Why
Dodds, Steve Hatfield, Ecos
Achieving sustainable development--rather than just talking about it--requires a framework for understanding threats to sustainability, and identifying practical options for addressing these.
Most measures of 'development' or 'progress' focus on flows, such as annual income or consumption. Concern for sustainable development requires us to look deeper, however, to see if these flows--and thus well-being--can be sustained in perpetuity. This draws attention to the assets or capital stocks that underpin well-being and environmental integrity.
These stocks are often classified into four main groups:
Produced capital (sometimes split into physical and financial capital) includes tools and equipment, buildings, books, vehicles, and physical infrastructure such as roads, bridges, pipes and powerlines. This group also includes financial assets and access to credit and insurance, which are essential components of household livelihood strategies and regional or national development success.
Human capital includes the health, skills and knowledge embodied in people, as well as the physical ability to do work. Human capital can be enhanced through education and training, and through improved nutrition and health.
Natural capital includes all environmental resources and processes that provide value to people, such as food, fibre, clean air and water, energy and waste processing. It also includes non-renewable resources, such as minerals, oil and coal. Modified environmental systems, such as plantations or the reservoir created by a dam, have attributes of both produced and natural capital.
Social and institutional capital includes networks of relationships between people, rules and governance arrangements, and shared norms and culture. Social capital contributes to well-being directly, such as through relationships and sense of identity. It also has an important role in facilitating the coordination and use of other forms of capital to promote human well-being.
One approach to sustainable development, described as weak sustainability, assumes that it is possible to compensate for a reduction in one type of capital (typically reduced natural capital) with an increase in another type of capital (typically produced capital). This approach defines sustainability in terms of an increase in the total value of the aggregate capital stock. …