Natural capital: the boom and bust of a metaphor? Insights from Scotland

Abstract

Despite a fifty-year academic history, the concept of ‘natural capital’ has only been translated into national policy and practice more recently. Since the early 2000s, global initiatives like The Economics of Ecosystems and Biodiversity and the UN System for Environmental Economic Accounts have spurred country-level adoption of natural capital approaches around the world. To examine the implications of this uptake, we traced the concept’s evolution in Scotland through a discourse analysis of 14 interviews, supplemented by key documents and events. Natural capital entered the Scottish context in the early 2010s, intended to make nature visible to decision-makers through economically valuing the environment. By the 2020s, concerns over insufficient public funding for ecological restoration, conceptualised as a nature finance gap, shifted focus to making nature financeable by the private sector. Subsequently, natural capital became emblematic of emergent nature markets, particularly carbon-based mechanisms, precipitating a boom in private sector interest. As the risks of operationalising these markets became apparent to investors, confidence in natural capital faltered by 2023. This prompted the public sector to assume responsibility for de-risking market development. We argue natural capital has facilitated a discursive slide from advocacy for valuation towards commodification practices, framing environmental crises as apolitical market opportunities. This trajectory tends towards privatisation of potential returns while socialising risk through public mechanisms. While natural capital may enhance aspects of nature’s legibility within existing political and economic systems, we caution that its discursive dominance constrains more transformative ambitions to reconfigure the structures that harm nature and its restoration.