Natural Capital Accounting (NCA)

Abstract

This paper critically examines Natural Capital Accounting (NCA) as a policy and management tool designed to integrate environmental considerations into financial decision-making. While NCA aims to promote sustainability by assigning economic value to nature's goods and services, it faces criticism for potentially commodifying ecosystems and reinforcing market-driven exploitation. The paper analyzes economic valuation of environment and NCA as a wicked problem, shaped by conflicting stakeholder interests, governance challenges, and perverse incentives across the state, market, and civil society. It argues for a more ethical, inclusive, and interdisciplinary approach that respects both the intrinsic and instrumental value of nature, aiming to reform current valuation frameworks to better support long-term environmental sustainability.

Keywords: Natural Capital Accounting, Environmental Governance, Wicked Problems