Natural Assets (Nonuse Values)

Natural assets are the various forms of wealth originating within the natural world. Land, water, the atmosphere, animals, and plants are all examples of natural assets. Natural assets can have both a use value and a nonuse value. The nonuse value of natural assets lies in their intrinsic value apart from any instrumental use as a mere means to other human ends. If, for instance, the Everglades were to be obliterated, this would be understood as a loss not simply because tourism would falter but because something of intrinsic value would have been lost. Tourism would represent one use value of the Everglades, but the Everglades also has a nonuse value, an intrinsic value. Recognizing the intrinsic value of natural assets is crucial to the appreciation of natural beauty, spiritual and moral development, and understanding the place of humans in the world.

Although natural resources are often thought of as publicly available natural assets, in practice, this does not always hold true. Natural resources are not defined as natural assets for an individual unless one also has a right to them. Clean water, for instance, may be a natural resource, but many have no access to clean water and are not necessarily thought to have a right to clean water that they may claim against those who privately own local water rights. So if someone owned the water rights to a local spring, the clean water from the spring would be both a natural resource and a natural asset for the owner. The spring water would be a natural resource but not a natural asset for a neighbor with no rights to the water.

Natural assets serve two crucial functions: providing the raw materials of economic production and serving as the natural sinks needed to maintain ecological homeostasis. As natural sinks, the air, water, and soil absorb and decompose waste. Forests, for example, play a crucial role in carbon sequestration. When wood is burned for fuel, carbon is released into the atmosphere contributing to climatic changes that often have a negative impact on the global ecosystem.

Traditionally, economists have not accounted for nonuse values assigned to natural assets in terms of either intrinsic value or their value as natural sinks. Instead, economists have held that natural assets are just another factor of production for which humanmade capital can be substituted indefinitely. Ecological economists try to account for the nonuse value of natural assets by assigning replacement cost values required to make up for the economic benefits otherwise yielded by intact natural sinks. While it is impossible to assign dollar values to the intrinsic value of natural assets, ecological economists argue that assigning economic value to natural assets, such as natural sinks, can go some of the way toward a more accurate assessment. Ecological economists, for example, would assign value to the oysters of Chesapeake bay as the kidneys of the bay that help to prevent algae blooms, rather than assuming that the monetary value of the oysters for the fishing industry is exhaustive.