Defining ‘sustainability’ is one of the toughest yet most important challenges of the modern environmental movement. The concept of critical natural capital (CNC) forms an important basis for its definition of sustainability by giving a baseline above which sustainable practices can be determined. CNC can be described as a point of degradation in an ecosystem past which it can no longer support its biodiversity or species populations. The concept originates from the idea that there is a certain minimal amount of natural capital necessary for ecosystems to continue to function and provide services for its inhabitants. Below that point, even human-made capital, such as technological substitutions, cannot replace the loss of welfare-sustaining ecosystem services. Natural capital is comprised of the environmental resources and services that can be used for life and factors of production. In our case, we are particularly concerned with an ecosystem’s ability to support an adequate standard of living for humans which includes drinking water, food, shelter, a moderate climate and resources for production.
The concept of critical natural capital lies in the strong sustainability argument that natural capital (natural resources and ecosystem services) and human-made capital (technology and intellect) are not fully substitutable. (Jansson, et al. 1994, p. 5) Although there may be some degree of substitutability, the possibilities are limited and tend to become more and more costly with increasing degradation of natural capital.
An example of the limits of substitution is arsenic pollution in local drinking water as a result of metal smelting. The clean drinking water would be considered natural capital to the local population. As the pollution levels increase, so does the total cost of treating the water to make it safe, called the total abatement cost. Filtering the water would be considered a technological substitute of human-made capital for natural capital, as would importing clean water. When, at the point that the pollution reduces the natural capital (water quality) below the point of CNC because of the high cost or unavailability of substitutions, the population must relocate or face health consequences of this pollution. The dire consequences of pollution scenarios like this are apparent on a global level where the only possible outcome is a reduction in human welfare.
Critical natural capital is a reflection of the limits of technological and natural substitutability, and it can be defined as the point at which there are no potential substitutes for the prevailing natural capital, which in human terms is the point at when people have no other choice but to move or suffer in the above arsenic scenario.
Although there are uncertainties in predicting ecosystem reactions to pollution and degradation, environmental science and ecology give insight into the levels of natural capital that are critical to sustaining life and economy for different ecosystems and populations. Knowledge of this CNC can help us to create definite levels of sustainability that lie far above this dangerous level of degradation.
To apply a practical example, take croplands which have historically supported a reasonably stable agrarian economy society. If they begin to lose fertility and become desert or saline through overuse, farmers can apply fertilizers, crop rotation or erosion control (technological substitutions) to produce the same yields as before degradation. Because of ecosystem resiliency, there may be a stable level above the CNC that allows for these substitutions without further natural capital degradation. This level can be considered a sustainable economy. If however, degradation continues further than the technological substitutes can make up for, an unsustainable economy is created. As the unsustainable economy progresses, eventually there is too little viable farmland left for technology or other human-made capital to create a reasonable substitution, and the point of critical natural capital has been passed. If the society does not migrate it will face hunger and starvation.
In order to create a sustainable economy we must combine our best understanding of efficient economic practice with sound scientific knowledge of ecological systems and ecosystem services to determine the critical amounts of natural capital that allow us to live, produce and consume at high standards of living. Sustainability can best be defined as a stable level of substitution between human and natural capital where the ecosystem integrity remains above the level of critical natural capital. As we seek to gain greater understanding of sustainable development and environmentally sound economics, ecological and environmental sciences must synergize with economic theories to determine important indicators, like critical levels of natural capital, to achieve concrete measures of true sustainable development.
