Accounting for natural capital

Jan-Erik Petersen

European Environment Agency

Policy references on natural capital accounting

At global level:

• Rio +20 communiqué on natural capital accounting

• World Bank WAVES initiative

• 2012 Aichi targets under Convention on Biological Diversity

At EU level:

• 7EAP – Objective 1 focuses on natural capital

• EU Biodiversity Strategy to 2020

• EU Resource efficiency strategy

The logic of environmental accounting:

linking economic, environment & social dimensions

Natural inputs (e.g. timber, mineral, water, aquatic resources, etc.)

Residuals (air and water emissions, waste)

Environment

Economy

Production and consumption

Well-being

Natural capital accounting: UN work and guidelines

SEEA Part 1 -

Central Framework

SEEA Part 2 -

Experimental

Ecosystem

Accounting

Support

measurement of

biodiversity

Inform post 2015

development

agenda and SDGs

SNA

Integrate natural

capital into

national accounts

Components of Natural Capital

Sub-soil assets:

(geological

resources)

Minerals, earth

elements,

fossil fuels,

gravel , salts etc.

Ecosystem capital:

(linked to ecological systems

and processes)

Natural capital

Abiotic flows:

(linked to geo-

physical cycles)

Solar, wind,

hydro, geo-

thermal etc.

Ecosystems

as asset:

Structure and

condition

Ecosystem

service flows:

• Provisioning

• Regulation &

maintenance

• Cultural

services

6

Sectoral Data Integrated information

Integrated information provides a structured picture to support policy making.

Convert anecdotal evidence to structured information

But consider:

•… but ecosystems

are more than the

sum of their parts.

Natural and social sciences decompose objects …

Managing our natural capital better – key steps

1) Understand the components of natural capital

2) Track their status – in quantity and quality

3) Identify key impacts from human activity and/or use

4) Analyse the main drivers behind these impacts

5) Review which policy or societal levers exist to manage

impacts or change the drivers

6) Develop adequate policy instruments and analytical tools

to effect and monitor change

Matrix used in UK national ecosystem assessment

on ecosystem service trends by habitat

9

What remains to be done?

• Further develop natural capital accounting methodology

• Organise existing data in an accounting framework, i.e.

structured and spatially referenced

• Fill existing (ecosystem) data gaps with existing and new

environmental monitoring instruments

• Better understand the link between public and private-

sector natural capital accounting approaches

• Review options for the valuation of natural capital and what

this allows us to say

What can natural capital accounts provide ?

Identifying and tracking our natural capital assets

Creating awareness and understanding

A framework for considering trade-offs and impacts of

policy and other drivers on ecosystems & their services

An alternative or complementary measure of welfare

Support for monetary valuation and integration of the

value of natural capital into national accounts

Thank you for your attention.

Jan-Erik.Petersen@eea.europa.eu

6) Knowledge needs & analytical tools

Analytical

issues :

Accounting

approaches

Monitoring

& indicators

Bio-phys.

research

Modelling &

policy analysis

Participant

research

Capital &

flows XXX X XX X XX

Resilience /

ecol.

boundaries

? X XXX XX X

Main uses /

impacts XX XX XX XX XX

Key drivers of

change X XX X XXX XX

Policy options

& levers X X ? XXX XX

Policy

outcomes XX XX XX XX XX