Natural Capital

AAA

DEFINITION of 'Natural Capital '

A reference to the stock of natural resources, such as water and oil. Unlike other forms of equity (such as machines and buildings), which can be created on a regular basis, many natural resources are nonrenewable. Natural capital includes many resources that humans and other animals depend on to live and function, which leads to a dilemma between depleting and preserving those resources.

INVESTOPEDIA EXPLAINS 'Natural Capital '

In economics, depletion of natural resources is a consequence that needs to be accounted for when looking at a company's effect on total welfare. A company might be making big profits, but if it is doing a lot of damage to the natural capital of an economy, it may actually have a negative effect on total welfare.

RELATED TERMS
  1. Green Economics

    A methodology of economics that supports the harmonious interaction ...
  2. Nonrenewable Resource

    A resource of economic value that cannot be readily replaced ...
  3. Carbon Trade

    An exchange of credits between nations designed to reduce emissions ...
  4. Renewable Resource

    A substance of economic value that can be replaced or replenished ...
  5. Welfare Capitalism

    Definition of welfare capitalism.
  6. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ...
Related Articles
  1. Home & Auto

    Preparing Your Finances From Natural Disasters

    Use these easy tips to protect your financial interests from natural disasters.
  2. Active Trading

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  3. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  4. Fundamental Analysis

    Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
  5. Investing Basics

    What is the difference between macroeconomics and finance?

    Dive into the world of economics by learning the key differences between macroeconomics and finance. These ideas help investors make good choices.
  6. Economics

    How successful is fiscal policy in guiding the national economy?

    See why it is difficult to evaluate the impact of fiscal policy on the national economy and how fiscal tools have failed to live up to expectations.
  7. Economics

    What do Keynes and Freidman have to do with fiscal and monetary policy?

    Find out how John Maynard Keynes and Milton Friedman influenced how modern economists and analysts think about fiscal and monetary policy.
  8. Economics

    What is the role of deficit spending in fiscal policy?

    Read about the role deficit spending can play in a government's fiscal policy, and learn why economists are torn about the efficacy of debt-related stimulus.
  9. Economics

    Who sets fiscal policy, the president or congress?

    Discover how fiscal policy is set in the United States, including how all three branches of government can affect a given policy proposal.
  10. Economics

    How do you quantify price elasticity?

    Learn how to calculate the coefficient for price elasticity, enabling you to approximate how sensitive supply and demand variables are to changes in price.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center