I was recently pointed toward the following report on The Economics of Ecosystems and Biodiversity (TEEB). In the report I found that the authors claim that the amount of Natural Capital on the entire planet is somewhere between $2 trillion and $4 trillion. For a good description of natural capital from a good economist, see Nordhaus’s discussions of the topic. Roughly speaking you can think of natural capital as the stock of the earth’s resources (actually the services that flow from them) that can be used by human beings including obvious things like raw materials and less obvious ones like pollution sinks.
Once you put it in those terms, you should be utterly astounded by how small this stock seems to be. For example, the total net worth of households and nonprofits in the US is roughly $60 trillion.
Julian Simon famously called people the ultimate resource. Can we crudely estimate the value of this “natural capital stock” (which happily does not get depleted with additional “use”)? Sure. The US GDP is about $15 trillion right now. Based on the national income and product accounts, it appears that about two-thirds of this value is generated by labor (i.e. labor’s share of income). So, workers generate and receive about $10 trillion per year of income in the United States alone. In other words, American workers produce a flow of income that is 2.5 times the stock of the entire world’s natural ones. If you want to consider people in the US a permanently long-lived amorphous blob of an asset, and assume long term interest rates of around 3%, then the value of this human capital stock is about one-third of a quadrillion dollars. That’s for the US alone.
Is there a deeper lesson in the data? Perhaps not. It illustrates to us the point economists make regularly. A pile of dirt (which is nothing more than tightly packed chemicals) is just a pile of dirt. It takes a human mind to figure out it can turn itself into a soda can, pottery, or even the beginning of a new, truly innovative and green car engine.