Social capital as adaptation capital

Daniel Hall says social capital can help make up for damaged natural capital.

Current climate change policy is aimed primarily at mitigation, to reduce the greenhouse gases causing it. Environmentalists use a sustainability argument that we should not further deplete earth’s ability to assimilate carbon capacity to the point of damaging future generations. Yet efforts have not been significant enough to come even close to sustainability in this sense.

Economics Nobel Laureate Robert Solow gives a broader definition of “sustainability” in his article, “Sustainability: An Economist’s Perspective” [pdf]. He argued that sustainability does not necessarily involve protecting a particular resource or natural way of life and that sustainability can mean not leaving future generations with a lower capacity to meet their general needs. This opens a role for adaptation in addressing climate change. People often think of the greenhouse gas problem as a pollution problem, but it can also be thought of as an extraction of the atmospheric and oceanic carbon-absorbing services of the earth. We are depleting this ‘natural capital’ to extract profits (“rents”) via market goods today. Solow said that sustainability can also be applied to the depletion of a nonrenewable resource if we properly invest the resource rents in activities conducive to economic growth and finding substitute resources.

Responsible policy involves accepting that we have already caused significant climate change and start using the rents from our depleted natural capital (the assimilative capacity) to invest in adaptation capital. We will need physical capital to rebuild and repurpose our infrastructure in adaptation to climate change. We will need human capital to solve challenges we will fail to anticipate. Finally, we will need social capital to collectively meet the challenges climate change will bring us.

Social capital is a measure of trust, cooperation, and participation in community and society. What if climate change makes where you live undesirable? If you had to relocate, who could help you move? Who would give you a place to stay outside your family when they have to move too? Who will bring you food and other necessities when the supply chains running to your house are temporarily broken? Will we engage in conflict over our reduced resources, or will we cooperate in the management of their scarcity? With rising temperatures, rising sea levels, and rising frequency and severity of disasters, our public and private sector support systems will be overwhelmed. We will need social capital to address these problems in a quick and decentralized manner.

Unfortunately, there is already insufficient investment in social capital today. People are joining organizations less and volunteering with groups less (Putnam 1995). When a large disaster like Hurricane Katrina or more recently Hurricane Matthew hits and captures media attention, we manage to pool our resources and find a way to help those most damaged. With extreme climate change these disasters will happen so frequently that we will become desensitized, then disaffected, then overwhelmed, and finally too busy saving ourselves to help others. We cannot wait to build social capital when cooperation becomes more challenging after climate change happens.

How can we reinvest in social capital? First, communities must commit to do so, and if viewing social capital as a form of adaptation capital serves as a catalyst, great. Businesses need to encourage employees to join organizations and participate in community activities. Government can provide incentives for donating time and talent as they do for charitable donations. Volunteer associations and non-profits must modernize and equip their organizations to anticipate and handle the future needs. Everyone can get to know their neighbor and help each other address problems.

Adaptation will require cooperation, and by building our cooperative capacities today, perhaps we can get closer to sustainability after severe climate change.


Daniel Hall is an Assistant Professor of Economics at High Point University in North Carolina. He serves HPU and community at large as the advisor to the Civitan Club on campus, a group known for the good works and civic duties. The Civitan Club has won many awards for service and Dr. Hall was awarded Outstanding Faculty Advisor by his students. Dr. Hall also incorporates Civitan into his research and into his teaching of a service learning course in microeconomics. He was honored as Service Learning Professor of the Year for the 2013-2014 academic year.

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