Achieving an actual measurable value for “natural capital” has remained elusive, says Eli Fenichel, an assistant professor of bioeconomics and ecosystems management at the Yale School of Forestry & Environmental Studies. In a new paper, Fenichel and co-author Joshua Abbott of Arizona State University report developing an approach to calculate a fair and consistent price for natural capital stocks that is grounded in the same theory of economic capital that governs the pricing of other capital assets, from stock prices to factories.

The researchers show the importance of valuing natural resources as a capital asset that stores wealth for the long term rather than simply as commodities that are bought and sold in the day-to-day by developing a formula that combines economic with biophysical measurements and quantifies the feedbacks between nature and human behavior.