The economics of cultural heritage or cultural capital play an important role in everyday life and economic development. Many small island economies and countries depend on cultural and heritage tourism, archaeological sites, local artefacts, and natural wonders for a large percentage of their income contribution to Gross Domestic Product. Countries adopt circular economy strategies for adaptive reuse of cultural heritage buildings to reduce environmental impacts, resources conservation, and recycling. Heritage conservation future is a global challenge and a paradigm shift. Market, however, fails to determine the value of living cultural heritage. Increasingly, there is a conflict between economic considerations and what heritage (tangible or intangible) to conserve and preserve, given that different types of heritage have social, economic, archaeological, cultural, political, and educational values. Economic impact studies are used by economists to value tangible and intangible living cultural heritage. The conservation and preservation of living and cultural heritage present distinctive challenges and problems of commodification of the living heritage, as they generate market and non-market benefits for the current as well as for the future generations, society, and the economy, linked to balancing the act of tourism and the locals’ day-to-day life. These benefits provide opportunities for government policy intervention regarding the conservation of the tangible and intangible cultural heritage sites, their promotion, but also their protection against the negative impacts of natural disasters and climate change through a community participatory co-creation approach. Government, along with the local communities and private sector, can formulate policies and play a key role in the conservation and preservation of living heritage-related traditional knowledge, local skills, arts and crafts, construction and agricultural methods, local herbal medicinal remedies, and practices for sustainable development in terms of improving livelihood, employment and income-generating activities. This chapter first compares the emergence, conceptual approach, and theoretical framework of living cultural heritage. It also helps to understand the opportunities, costs of conservation and the true economic value of living heritage sites for sustainable development, and to explore specific approaches to the heritage community conservation through specific case studies in an attempt to determine the economic benefits of conserving “living heritage” and aligning the policy with the United Nations Sustainable Development Goals.