Natural capital is the stocks of living and non-living natural phenomena that generate flows of benefits essential to all life.
why
The current financial system recognizes only a fraction of natural capital's true value—primarily food, raw materials, and energy. Most ecosystem services remain outside market mechanisms, leading to systemic undervaluation.
This isn't an oversight. It's structural. When measurement precision increases, nature's value approaches infinity (the Richardson Effect). Full accounting is impractical. So we use a practical approach: value annual flows in relation to the cost of underlying stocks.
what
stocks & flows
The benefits nature provides are composed of:
| Component | Definition | Examples |
|---|---|---|
| Stocks | Ecosystem assets that accumulate | Forests, wetlands, watersheds |
| Flows | Services derived from stocks | Clean water, climate regulation, pollination |
Together, when defined by extent, characteristics, and condition for a specific place, they form a natural asset — a legally defined real asset whose natural capital can be measured, valued, and ensured.
Natural capital is in, under, on, and flows across natural assets. Where natural capital is unbounded — irreducible to property lines or jurisdictions — natural assets create the legal and financial frame that makes it investable. See natural-assets for the full concept.
the 15 stocks (ecosystems)
Ensurance recognizes 15 ecosystem types. These were established through a comparative synthesis of over 75 primary sources — including IUCN GET 2.0, ESVD, FEMA, SEEA EA, CICES, ENCORE, and TNFD. The result is BASIN's own researched classification: the most consistent and applicable categories across environmental, economic, and disclosure systems.
These 15 stocks are the protocol standard. All ensurance work — valuation, classification, agent naming, coin taxonomy — uses these categories, not raw CICES, IPBES, or other external frameworks directly.
| Terrestrial | Aquatic | Other |
|---|---|---|
| Cultivated & Developed | Rivers & Lakes | Polar & Alpine |
| Urban Open Space | Inland Wetlands | Desert |
| Rural Open Space | Coastal Systems | Subterranean |
| Tropical Forests | Marine Systems | |
| Temperate Forests | ||
| Boreal Forests | ||
| Grasslands | ||
| Shrublands |
the 19 flows (ecosystem services)
Ensurance tracks 19 core benefits that nature provides. Like the 15 stocks, these were synthesized from leading global frameworks into BASIN's own classification — consolidating MEA, TEEB, CICES, and IPBES into the most consistent set of ecosystem services for valuation and protocol use.
Provisioning
- Raw Materials
- Food
- Energy
- Water Abundance
- Medicinal & Genetic
Regulating
- Climate Stability
- Clean Air
- Clean Water
- Risk Resilience
- Pollination
- Erosion Control
- Pest & Disease Control
- Healthy Soils
Cultural
- Habitat
- Recreation & Experiences
- Research & Learning
- Aesthetic & Sensory
- Art & Inspiration
- Existence & Legacy
Plus two foundational real asset benefits: Land Utilization and Resource Utilization.
how
valuation methodology
We express natural capital value using three components:
| Metric | Definition | Expression |
|---|---|---|
| Stocks Value | Real asset cost at a point in time | Dollars ($) |
| Flows Value | Annual ecosystem services value | Dollars per year ($/yr) |
| Natural Cap Rate | Relationship between flows and stocks | Percentage (%) |
Formula:
Natural Cap Rate = (Annual Flows Value / Stocks Value) × 100
example
A 100-acre wetland:
| Component | Value |
|---|---|
| Stocks (land cost) | $294,250 |
| Flows (annual ESV) | $1,449,703 |
| Natural Cap Rate | 493% |
| Value Gap | $1,155,453 |
The Natural Cap Rate reveals ecosystems that are cost-effective to protect. Higher rates indicate natural assets where protection cost is low relative to annual value produced.
natural cap rate ranges
Based on our research:
| Ecosystem Type | Typical Natural Cap Rate |
|---|---|
| Inland Wetlands | 300-800% |
| Coastal Systems | 200-600% |
| Forests | 100-400% |
| Grasslands | 50-200% |
These rates exceed traditional real estate cap rates (4-10%) by orders of magnitude—revealing the extraordinary value nature provides relative to acquisition cost.
the investment thesis
The natural cap rate is more than a valuation metric. It is the economic engine of the ensurance protocol.
The spread between flows value and stocks cost creates two opportunities:
| Opportunity | Who It Serves | Mechanism |
|---|---|---|
| Premium capacity | Flow investors (members investing in risk reduction) | Annual premiums are a fraction of the value they receive |
| Yield capacity | Stock investors (real-asset capital providers) | Certificates issued on value, priced on cost, yield from premiums |
A 493% natural cap rate means the protocol only needs to convert a small fraction of ecosystem service value into financial premiums for the economics to work. The model doesn't require capturing all value—just enough to service the investment and reach permanent protection.
See ensurance for how these two types of investors combine.
data sources
Valuation draws from:
- ESVD (Ecosystem Services Valuation Database) — ~9,000 value records
- FEMA Ecosystem Service Values — US per-acre values by land cover
- SEEA-EA — UN statistical framework
- TNFD — Nature-related financial disclosures
Detailed methodology and classification frameworks are documented in the Basin Field Manual appendix.
linking to ecological indicators
Natural cap rate metrics can be linked to ecological indicators:
- Biodiversity indices (SEED Biocomplexity)
- Carbon sequestration rates
- Water quality metrics
- Species abundance
- Ecosystem condition scores
This enables tracking how interventions (restoration, protection) affect both ecological health and economic value.
related
- natural-assets — How we make natural capital investable
- approach — Philosophy and core principles
- framework — Detailed valuation methodology and classification
- ensurance — How natural cap rates drive the funding model
- certificates — Specific ensurance tied to natural assets
- agents — Stewards of natural capital