A ROAD MAP FOR NATURAL CAPITALISM

by Amory Lovins, L. Hunter Lovins, and Paul Hawken 
The earth's ability to sustain life, and therefore economic activity, is threatened by the way we extract, process, transport, and dispose of a vast flow of resources-some 220 billion tons a year, or more than 20 times the average American's body weight every day. With dangerously narrow focus, our industries look only at the exploitable resources of the earth's ecosystems-its oceans, forests, and plains-and not at the larger services that those systems provide for free. Resources and ecosystem services both come from the earth-even from the same biological systems-but they're two different things. Forests, for instance, not only produce the resource of wood fiber but also provide such ecosystem services as water storage, habitat, and regulation of the atmosphere and climate. Yet companies that earn income from harvesting the wood fiber resource often do so in ways that damage the forest's ability to carry out its other vital tasks.

The reason companies (and governments) are so prodigal with ecosystem services is that the value of those services doesn't appear on the business balance sheet. But that's a staggering omission. The economy, after all, is embedded in the environment. Recent calculations published in the journal Nature conservatively estimate the value of all the earth's ecosystem services to be at least $33 trillion a year. That's close to the gross world product, and it implies a capitalized book value on the order of half a quadrillion dollars. What's more, for most of these services, there is no known substitute at any price, and we can't live with-out them.

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