This paper discusses the need to encourage the development and adoption of processes and methods that can quantify the costs of using natural resources. However, in order to make informed decisions on allocating resources for sustainable economic development, it will be essential to value the cost of natural capital. This practice is difficult since assigning a monetary value for quantifying natural inputs such as water, air, trees, and climate is context-specific and requires data.
This paper suggests that natural capital valuations can help to calculate the true cost of capital and thus differentiate sustainable projects from unsustainable ones. It also suggests that the G20 should encourage the development and adoption of processes, instruments, and regulations needed for valuing natural capital.