natural capital adequacy

Natural capital adequacy applies capital adequacy rules to natural capital. Because nature's services function in a fundamentally different way than infrastructural capital or financial capital, the concept of adequacy defers to ecologists' models, e.g. of carrying capacity.

Natural capital liability or ecological debt is an estimate of the costs to human beings of any short-term effort to restore the natural capital to the state where the services are no longer in doubt. Because this can change rapidly, and may also involve investment in infrastructural capital where a natural barrier, e.g. a barrier island, has been eroded, the abstractions of "liability" and "debt" may not relate directly to their financial capital equivalents except through complex regret measures.

As the easiest example, climate change results from damage to the atmosphere - a buildup of several greenhouse gases. The liability may be simply a matter of emission credit acquisition at a certain point in time, but if this is not covered, it might be infinite - it does not grow at a steady rate as debt does in finance - as Craig Hubley put it, "Mother Nature acts more like a loan shark."

Hubley, Bernard Lietaer and the World Mayors and Municipal Leaders Declaration on Climate Change, 2005-12-07, all advocate monetary reforms to deal with this problem.