Introduction
In the broadest economic sense, soil natural capital is simply a way of considering the intrinsic or natural value of soil. It is equivalent to terms such as soil condition or soil health.
Costanza et al. (1997), in the prestigious journal Nature, estimated the natural capital value of the earth as roughly twice the size of the global financial economy. Soil is an essential form of earth’s natural capital that is vital for humans, our food production and for ecosystem services. It is fragile and if over-exploited or mismanaged it can be degraded.
The NSW Soil Knowledge Network advocates for the recognition of the true value of soils as natural capital and the need for appropriate management to maintain or enhance the value of soil natural capital.
| Economic Capital Any asset used to generate income, fund operations or create wealth. It includes financial capital (debt, equity, working capital), physical and tangible capital (machinery, tools / equipment, buildings and inventory), and intangible and human capital (intellectual property, human skills, knowledge and experience). |
| Natural Capital Includes all aspects of our environment: air, water, geology, land, soils, vegetation, animals and organisms of all types, if used in production or providing environmental services. Natural capital also encompasses living ecosystems, including rainforests, grasslands, savannas, tundras, riparian corridors, wetlands, estuaries, oceans and coral reefs. |
| Soil Ecosystem Services Fertility: soil nutrient cycles ensure fertility renewal and the delivery of nutrients, stored water and provide a substrate to plants, therefore contributing to plant growth, including the planet’s crops and forests. Water storage and filtering: soils fix and store solutes passing through them, thereby purifying water. Soils also store water for plants or for irrigation, or store water which attenuates water flows and mitigates flooding. Structural support: soils provide physical support for plants, animals and human infrastructure – buildings, bridges, playing fields, roads, tracks and runways. Climate regulation: soils take part in climate regulation through carbon sequestration and greenhouse gases (N2O and CH4) emissions regulation. Habitat: soils are a reservoir of biodiversity. Most species are dependent on, or spend time in, the soil. Anthony et al. (2023) concluded that 59% of terrestrial species are soil habitat dependent, making soils ‘the singular most diverse habitat on earth’. Resources: soils are a source of materials like sand for building, clay for pottery and bricks, and peat for potting mixes. Healing: soils provide a base for human and animal health as they are an important source of antibiotics and other medicines. After Dominati et al. (2010) and McBratney et al. (2014). |
Like other capital resources, the natural capital value of soil reflects the value of the flow of outputs that the soil provides. These outputs are known as soil ecosystem services, although elsewhere they may be termed ecosystem processes, functions, products or fluxes. Essentially all these terms are similar – they are nuanced terms for the value of soil contributions.
Company capital is used to produce and sell goods and services, and the resulting profits influence the market value of the company. In this way, society assigns economic value. Historically, it has been difficult to quantify the economic value of assets that are not directly exchanged for money. The concept of soil natural capital seeks to value soil in economic terms, like how a company is valued.
Many economists, treasury officials and policy makers increasingly recognise soil natural capital as being financially valuable – with a view towards monitoring it, maximising it, marketing it, insuring and trading it. In other words, soil natural capital may be able to operate in a market context in a similar way to financial capital.
The main conceptual and practical difficulty is attributing an appropriate financial value to soil natural capital but the economic principles of supply and demand can be applied to the concept of soil natural capital. For example, as the ability of soil to supply food is exceeded by demand for that food, then soil natural capital increases as the land becomes more valuable. Conversely, if the ability of the planet’s soils to deliver ecosystem services falls, then soil natural capital becomes less valuable. Due to globalisation, where there are numerous buyers and sellers across the planet, it is not until there is a perception that supplier markets could collapse that we can expect to see spikes in global food prices. This lag in economic indicators tends to mask declines in soil natural capital and it may be too late to repair soil natural capital by the time traditional economics reveals a problem. Consequently, global food security requires pre-emptive and long-term maintenance of soil natural capital. See for example Pozza & Field (2020).
The previous ‘frontier’ attitude of there being plenty of (cheap) land available over a vast planet is being increasingly challenged by acknowledgement that soil natural capital is a finite global resource – and that it is being globally degraded by intensifying demand from large and growing populations and damaged by climatic events. Prevention is cheaper than cure, so it makes sense to protect what we have, especially as history documents numerous civilisations collapsing with (or due to) loss of their soil natural capital (Dale & Carter, 1955; Montgomery, 2007; Diamond, 2005). Some even postulate that we may eventually be facing a global food production crisis due to soil issues (for example, Cribb, 2010).
We know that around a third of the planet’s soils are at least moderately damaged (Smith et al., 2024) and some of this damage has occurred to soils which were once highly productive. As a result, production is expanding on more marginal and fragile land (Montgomery, 2007). Loss of soil natural capital has mostly stemmed from land degradation resulting from ignorance, poor management or poor outcomes from risk taking. (See for example Lal & Stewart, 1992).
Soil and land degradation processes include sheet erosion, gully erosion, wind erosion and mass movement, as well as soil structure decline, soil salinisation, soil acidification, acid sulfate soil acidification, nutrient and carbon decline and soil surface sealing. These processes not only reduce the value of soil natural capital and impact the provision of soil ecosystem services – they can also detrimentally impact the natural capital of locations down slope, down wind and down river, including sensitive water bodies.
Soils differ greatly in their natural capital value and in the ecosystem services they provide. Some are highly fertile and ideal for producing a range of crops, while other soils have lower fertility or a particular property that makes them well-suited to a particular land use. For example, in New South Wales the soils around Young are renowned for cherry production, the Macquarie Riverine floodplain soils grow cotton, macadamias thrive on the Alstonville Plateau, and the sandstone soils of the Blue Mountains are ideal for Waratahs.
Because soil properties vary so widely, the capacity of soils to deliver ecosystem services also varies. Some soils are better suited to certain land uses than others, and mismatching land use to soil capability can lead to significant costs, including land and soil degradation. Protecting soil natural capital depends on aligning land use with the inherent characteristics of soil and landscape. SKN supports land use planning that maximises soil natural capital and advocates for soil and land information as a foundational element of regional planning.
Soil scientists study the properties and interactions of soils in the environment. They can evaluate the delivery of soil ecosystem services, map their relative value and assess soil natural capital. See for example Scammacca et al. (2025), Chapman & Barrett (2012) and Murphy & Fogarty (2019). Soil condition has been measured at many places in New South Wales (eg. Chapman et al. 2011) and there are many known thresholds for soil capital. For example, when soil acidifies, that is its pH drops to less than 5.5 (1:5 soil:water), the roots of many cereal crops become stunted and yields are significantly reduced (Du et al., 2024).
The concept of resilience of soil natural capital is important. In NSW land resilience is referred to as Soil and Land Capability. High capability soils have properties and environments which make them resistant to land degradation. They can withstand more intense land use and land management activities without permanently reducing their soil natural capital. This means that using and managing land within its capability is a fundamental requirement for maintaining soil natural capital (Gray et al., 2015).
In many respects the soil’s natural capital is the real value of rural land, both for the owners and the communities which depend on soil ecosystem services – be it for supporting natural ecosystems, producing food, or filtering for clean water. One way towards improvement of soil natural capital is for the scientific evaluation and public reporting of soil condition.
SKN Position Statement on Soil Natural Capital
The NSW Soil Knowledge Network advocates:
- recognition of the important and fundamental value of soils as natural capital;
- the need for appropriate soil use and land management to maintain or enhance the value of soil as natural capital.
SKN is concerned by a shortage of skilled soil practitioners across Australia and we encourage:
- institutions to re-build their soil science expertise;
- society to invest in the understanding and accessibility of high-quality soil information.
SKN encourages:
- investment in soil knowledge as essential scientific infrastructure;
- policy makers to develop meaningful modern land management policies that recognise soil as important natural capital;
- informed management of our soils.
References
Anthony, M. A., Bender, S. F., & Van Der Heijden, M. G. A. (2023). Enumerating soil biodiversity. Proceedings of the National Academy of Sciences, 120(33), e2304663120. https://doi.org/10.1073/pnas.2304663120
Chapman, G. A., & Barrett, T. W. (2012). Valuing and using Soil Ecosystem Service Benefits (SESB) for catchment planning. Joint Australia and New Zealand Soil Science Society Conference: Soil Solutions for Diverse Landscapes.
Chapman, G. A., Gray, J. M., Murphy, B. W., Atkinson, G., Leys, J. F., Muller, R., Peasely, B., Wilson, B. R., Bowman, G. M., McInnes-Clarke, S. K., Tulau, M. J., Morand, D. T., & Yang, X. (2011). Monitoring, Evaluation and Reporting of Soil Condition in New South Wales: 2008 Program. NSW Department Environment, Climate Change and Water.
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Cribb, J. H. J. (2010). The coming famine: The global food crisis and what we can do to avoid it. University of California Press.
Dale, T., & Carter, V. G. (1955). Topsoil and Civilisation. University of Oklahoma Press.
Diamond, J. (2005). Collapse: How societies choose to fail or succeed. Penguin.
Dominati, E., Patterson, M., & Mackay, A. (2010). A framework for classifying and quantifying the natural capital and ecosystem services of soils. Ecological Economics, 69(9), 1858–1868. https://doi.org/10.1016/j.ecolecon.2010.05.002
Du, L., Zhang, Z., Chen, Y., Wang, Y., Zhou, C., Yang, H., & Zhang, W. (2024). Heterogeneous impact of soil acidification on crop yield reduction and its regulatory variables: A global meta-analysis. Field Crops Research, 319, 109643. https://doi.org/10.1016/j.fcr.2024.109643
Gray, J. M., Chapman, G. A., & Murphy, B. W. (2015). Land management within capability: A new scheme to guide sustainable land management in New South Wales, Australia. Soil Research, 53(6), 683–694. https://doi.org/10.1071/SR14196
Lal, R., & Stewart, B. A. (Eds.) (1992). Soil Restoration (Vol. 17). Springer-Verlag.
McBratney, A., Field, D. J., & Koch, A. (2014). The dimensions of soil security. Geoderma, 213, 203-213.
Montgomery, D. R. (2007). Dirt: The Erosion of Civilizations. University of California Press.
Murphy, B., & Fogarty, P. (2019). Application of the Soil Security Concept to Two Contrasting Soil Landscape Systems—Implications for Soil Capability and Sustainable Land Management. Sustainability, 11(20), 5706. https://doi.org/10.3390/su11205706
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Smith, P., Poch, R. M., Lobb, D. A., Bhattacharyya, R., Alloush, G., Eudoxie, G. D., Anjos, L. H. C., Castellano, M., Ndzana, G. M., Chenu, C., Naidu, R., Vijayanathan, J., Muscolo, A. M., Studdert, G. A., Eugenio, N. R., Calzolari, M. C., Amuri, N., & Hallett, P. (2024). Status of the World’s Soils. Annual Review of Environment and Resources, 49(1), 73–104. https://doi.org/10.1146/annurev-environ-030323-075629