BASIN Field Manual
Natural Capital Investments
  • Provenance
    • 📕The BASIN Field Manual
    • The Intrinsic Value of Nature
    • What You Seek
  • Core Benefits
    • âš¡Nature's Core Benefits
    • Core Benefits Framework
      • STOCKS: Ecosystems
        • Ecosystem Definitions
      • FLOWS: Core Benefits
        • Core Benefits Definitions
  • RealValue
    • âš¡Why put a Value on Nature?
    • The RealValue of Natural Capital
      • Examples of RealValue
      • Ecological Polygon
      • RealValues
        • STOCKS Values
        • FLOWS Values
      • Natural Cap Rate
      • RealValue Use Cases
  • Ensurance
    • âš¡Critical Infrastructure
    • Ecological Ensurance
    • Ensurance Examples
    • 📓ENSURANCE BINDER
  • Protocol
    • âš¡The Value Gap
    • Nature's Balance Sheet
    • The BASIN Protocol
      • PLACE
      • PURPOSE
      • PEOPLE
    • Model
    • Incentives
      • CO2 PPM - Keeling Curve
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  • Dossier
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    • CONFLUENCE
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      • RWA x ReFi Report
      • Core Benefits Label
    • Formalities
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  • Appendix
    • Glossary
    • Land Cover Classification & Ecosystem Typologies
      • Ecosystem Classification Frameworks
        • IUCN Global Ecosystem Typology 2.0 (IUCN GET 2.0)
        • Ecosystem Services Valuation Database (ESVD)
        • FEMA Ecosystem Service Value Updates
        • IUCN Red List Habitat Classification
        • ESRI Land Cover
        • USGS National Land Cover Database (NLCD)
        • Dynamic World
        • Other Sources
      • Ecosystem Types
        • Cultivated & Developed
        • Rivers & Lakes
        • Inland Wetlands
        • Urban Green Open Space
        • Rural Green Open Space
        • Forests
        • Coastal Systems
        • Grasslands
        • Shrublands
        • Polar & Alpine
        • Desert
        • Subterranean
    • Ecosystem Services Classification
      • Ecosystem Services Frameworks
        • System of Environmental-Economic Accounting - Ecosystem Accounting (SEEA EA)
        • Common International Classification of Ecosystem Services(CICES) V5.1
        • Ecosystem Services Valuation Database (ESVD)
        • FEMA Ecosystem Service Value Updates
        • IPBES Global Assessment of Biodiversity and Ecosystem Services (NCP)
        • Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE)
        • TNFD Environmental Assets & Ecosystem Services
        • Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST)
        • Swiss Re Biodiversity and Ecosystem Services Index (BES)
      • Ecosystem Services Classification
        • Raw Materials
        • Food
        • Energy
        • Water Security (supply & storage)
        • Soil
        • Medicinal & Genetic
        • Climate Regulation
        • Air Quality
        • Water Quality (filtration)
        • Hazard Risk Reduction
        • Pollination
        • Erosion Control
        • Biological Control
        • Habitat
        • Recreation & Tourism
        • Research & Education
        • Aesthetic
        • Cultural & Spiritual
        • Existence
    • Real Asset Classification & Real Property Considerations
    • Value Types & Valuation Methods
      • Types of Value
        • Values Across Cultures
      • Valuation Methods
    • Selected Value Types & Valuation Methods
      • Fundamentals of RealValue
      • Real Asset Values
        • Cap Rate Overview
      • Ecosystem Service Values
    • Ecological Indicators & Metrics
    • Ecosystem Services Dependencies & Risks
      • Industry Classifications
      • Industry Dependencies & Risks
      • By Sector & Industry
        • Consumer Staples
        • Utilities
        • Real Estate
        • Industrials
        • Materials
        • Energy
        • Consumer Discretionary
        • Financials
        • Information Technology
        • Communication Services
        • Health Care
        • Archive
          • Outdoor Apparel & Gear Industry
          • Food & Beverage
            • Tobacco
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On this page
  • The Higher & Better Use of Real Assets
  • RealValue Composition
  • Ecological Polygon
  • RealValues
  • RealValue Expression
  • Linking Ecological Indicators & Indices
  • Examples of RealValue

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  1. RealValue

The RealValue of Natural Capital

The RealValue of Natural Capital expresses the relationship of ecological stocks and flows at a point in time based on ecosystem extent, characteristics, and condition, in a common language, dollars.

The Higher & Better Use of Real Assets

Ecosystems, like it or not, are subject to the jurisdictional authority of place. They are integrated into our collective economic, legal, and social frameworks as real assets and real property.

In real asset valuation, the prevailing approach prioritizes the 'highest and best use' of a property, emphasizing the maximization of financial returns and profitability. To maximize profit, properties are developed based on what is legally permissible and physically possible, leading to significant land use changes to accommodate human use and consumption. This valuation paradigm results in the destruction of ecosystems and the loss of the benefits they provide.

In contrast, RealValue establishes the 'higher and better use' of real assets by emphasizing the importance of accounting for the benefits provided by nature and valuing natural capital in monetary terms. This approach presents a compelling alternative for determining how a 'property' should be utilized, juxtaposing short-sighted valuations with holistic assessments that consider the broader ecological context.

RealValue Composition

RealValue is comprised of and calculated based on two main components: Ecological Polygon and RealValues.

Ecological Polygon

This is ecosystem that is being valued consisting of extent, characteristics, and condition.

RealValues

These are the individual values of the Core Benefits converted to and expressed in dollar values.

RealValue Expression

RealValue is expressed via two metrics and one indicator:

  • Stocks: real asset dollar ($) value at a point in time (lump sum metric). The stocks value is the 'real world' price, cost, or value of a polygon (the underlying real asset).

  • Flows: annual economic and financial dollar ($/yr) values (annual metric). Economic values are referred to as Public Goods Values and financial values as Anthropocentric Values.

  • Natural Capitalization Rate: expresses the relationship between the value of the stocks and flows. This indicator allows for comparison across polygons and ecosystems based on condition, intervention, and underlying real asset market values. Formula: Flows dollar value divided by Stocks dollar value equals the Natural Cap Rate (indicator).

Linking Ecological Indicators & Indices

Examples of RealValue

PreviousWhy put a Value on Nature?NextExamples of RealValue

Last updated 10 months ago

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The RealValue metrics and indicator can be linked to any assortment of , both quantitative and qualitative, to assess overall ecosystem state, function, and health including biodiversity.

Before diving into the details of Ecological Polygons and RealValues, here are some .

ecological metrics, variables, indicators and indices
examples of RealValue and Natural Cap Rates
Examples of RealValue