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What Is Environmental Capital?

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  • Written By: B. Turner
  • Edited By: W. Everett
  • Last Modified Date: 21 November 2016
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Environmental capital includes all the natural resources found within a country. It includes both renewable resources like plants and clean air, as well as nonrenewable assets like oil and gas. Analysis of environmental capital is often based on how this capital is impacted by business activities, like mining or manufacturing. These activities are said to be sustainable when they are done in a manner that preserves existing environmental capital rather than consuming or damaging it.

Natural, or environmental capital includes all resources that benefit society in some way. These assets may be things that are vital to survival, such as food, air, and water, or more intangible items like beautiful scenery and views. It reflects the sum of both renewable and nonrenewable resources.

Renewable forms of capital include things that society can make more of. Some examples include food, like grains, cattle, and fruit. Fresh water is also considered a renewable asset because it can be purified through mechanical means or naturally via the water cycle. Clean air is also a form of capital, which is renewable through filtering and purification. Wood and fiber, which are used to make homes and clothing, are also considered renewable resources.

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Nonrenewable forms of environmental capital include assets that are in danger of being used up or eliminated. The most widely cited example of this is fossil fuels like coal or oil, which take millions of years to regenerate. Rainforests and other old growth forests are another example, as are endangered species or plant life. Minerals, metals, and gems other form of nonrenewable capital.

As society shifts towards a greener, more sustainable lifestyle, the pressure is on companies and the government to preserve existing environmental capital. This means investing in more sustainable technologies and production methods, such as wind or hydroelectric power generation, pollution controls, and responsible harvests and fishing. At its essence, a sustainable society is one that provides all the resources that people need to live now without compromising the lives of future generations.

In a traditional capitalist society, businesses have little motivation to protect environmental capital. Some companies choose to behave more sustainably in response to customer demand. It is only by customers shifting their demand and speaking with their dollars that more businesses will be motivated to change their ways. Citizens can also encourage elected officials to bring change through the introduction of new laws that force businesses to protect environmental capital.

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