Problem
Undervaluation of natural capital
Other Names:
Undervaluation of common propertyUndervaluation of natural resources in national accounts
Nature:
National accounting has focused on man-made capital. Capital consumption, or depreciation, has been subtracted from gross domestic product, giving a net domestic product figure which is sustainable in the sense that one can consume that amount while maintaining the capital stock intact. This concept does not take into account consumption of the "natural" or environmental capital. It is possible to estimate environmentally adjusted net domestic product by subtracting environmental depletion and degradation allowances from the standard net domestic product figures.
Broader Problems:
Rogue capitalismInadequacy of economic accounting systemsUnethical practices in natural resource managementLack of incentive to care for community propertyFailure of global economic mechanisms in biodiversity conservationUndervaluation of public assets Narrower Problems:
Undervaluation of nature in planning and decision making Aggravates:
End of natureIllusion of progressCommercialization of natureDestruction of natural barriersInsufficient use of natural resourcesIrreversible depletion of natural capitalIrresponsibility towards future generationsInadequate evaluation of environmental costsUnconstrained exploitation of natural resourcesFailure to take account of externalities of systemsResource consumption exacerbated by price distortions Strategies:
Investing in environmental conservationCapturing environmental valueLegalizing community rights to resource usePlanning development of natural resourcesUsing genetic resourcesUndervaluing natural capitalManaging natural resourcesControlling use of natural resources Subject(s):
Commerce → AccountingCommerce → Finance
Commerce → Property
Geography → Nature
Resources → Resources
Related UN Sustainable Development Goals:
Problem Type:
F: Fuzzy exceptional problems Date of last update
04.10.2020 – 22:48 CEST