4. The Solution (Emphasis on Natural Capital as the Foundation for Economy and Society)

A more profound shift towards sustainability will also involve a fundamental re-conceptualizing of land and the natural environment as a key foundation for economy and society. It is not the preserving of a few acres of amenity “open space” that seems the smart growth strategy, but instead a much more fundamental rethinking is needed. Natural capital in all its forms must be acknowledged and protected. This means planning on the recognition of both important ecological services provided by land and nature as well as its profound role in our lives and psyche and its inherent worth. Several key elements of a new theory of natural capital might be identified. Herman Daly talks about the importance of investing in natural capital, and this must clearly be part of our agenda. This increasingly means, in case of renewable resources, reducing off take or harvest and allowing additional regeneration to occur, “Net investment in renewables requires additional waiting - allowing all or part of the growth increment to be added to the productive stock each year rather than be consumed.”⁴⁴

However, much can be learnt by revisiting the thinking and writing of Henry George and his important ideas about nature, land, and rent. A major opportunity for the academic and land policy community to contribute usefully to the growth management debate is to treat Georgian ideas seriously. In the past, George’s work has been ignored, distorted, and even suppressed, but now, there is evidence of some renewed interest in his ideas and empirically there is evidence that Georgian ideas are taking hold. As Dean Misczynski, co-author with Donald Hagman of the landmark Windfalls for Wipeouts has observed, Henry George’s ideas have been embraced with a vengeance in California in the form of impact fees.⁴⁵

Furthermore, we need a planning and management system that attaches a value to land and environmental inputs that are more than its extraction or harvesting costs or speculative value. This value must acknowledge the value of the services they provide us in their intrinsic form (e.g., the unique niches served by lands preserved as wetlands, forests, or habitats). One way to do this is to place prices on the use or extraction: an example of this is the groundwater extraction tax charged in the Netherlands.⁴⁶ Perhaps we also need a new regional accounting system for natural capital. This system could take the form of a detailed set of asset statements for each region or bioregion, by which changes in natural capital are logged and tracked over time. A strong theory of sustainability requires protection of the capital stocks or renewal or regeneration, but not trading them against technological or other material progress. A regional accounts system would allow the guarding against this.

In part, this would help us to formulate measures of progress that more accurately take into account impacts on the natural environment. Daly admonishes us to “stop counting the consumption of natural capital as income.” Indeed, our economic system counts the destruction of a wetland or forest or acre of prime farmland in order to erect a Super Walmart, as a generally positive economic transaction. Such a land use change is seen in our conventional gross domestic product (GDP) as a positive contribution to economic growth, despite the significant diminution of natural capital that is not subtracted or otherwise counted in the equation. We need new measures of progress: may be a “genuine progress indicator” (GPI).⁴⁷ Perhaps a regional GPI should be calculated for every major region or bioregion, which would more effectively factor in the condition and quality of natural capital over time.

A strong theory of natural capital would have implications for our land conservation strategies as well. Rather than incremental and fragmented land protection, we need much bolder, much more audacious land protection schemes. We should follow the lead, again, of the Netherlands, and develop a national ecological network - a comprehensive large-scale integrated system of protected lands and connected landscapes. Such larger-scale visions will in the long run be the only viable way of ensuring the protection of our nation’s vast biological wealth.⁴⁸