Natural capital accounting
Natural capital accounting is the systematic organization of information about natural resources, ecosystems, their condition, and the services they provide, using accounting principles. It connects environmental stocks and flows with economic and social information so changes in nature can be assessed consistently over time.
In simple terms
Natural capital includes resources and environmental assets, while Natural capital accounting supplies a structured record of their extent, condition, use, and change. Under the UN System of Environmental-Economic Accounting, ecosystem accounts can cover Ecosystem extent, condition, Ecosystem services in physical or monetary terms, and monetary ecosystem assets. Monetary valuation is not required for every account. The method complements conventional economic accounts; it does not imply that every aspect of Biodiversity can or should be reduced to a price.
Why it matters
Economic indicators can rise while soils, water, forests, or other natural assets deteriorate. Consistent accounts expose those changes and the services affected, improving policy analysis, land planning, and evaluation of dependencies. They also distinguish measured physical change from valuation assumptions, helping users interpret natural-capital figures without treating them as a complete measure of ecological or social value.
Example
A country maps forest and wetland extent, assesses changes in condition, measures water regulation and recreation services, and links those tables to economic activity. The accounts show where Natural capital and Ecosystem services are declining or recovering. Officials may add monetary estimates, but the physical accounts remain useful without assigning a price to every benefit.