SEEA Experimental Ecosystem Accounting Overview

1. SEEA Experimental Ecosystem Accounting Overview Alessandra Alfieri United Nations Statistics Division

2. Rationale for Experimental Ecosystem Accounting • Envisaged as part of SEEA revision process initiated in 2007 under the management of the Committee of Experts on Environmental-Economic Accounting • Complements SEEA Central Framework • Not intended to be an international statistical standard but initial conceptual framework for accounting for ecosystem assets and associated services from which testing and research can be undertaken

3. Blending underlying concepts • Conceptual model is ecosystem accounting formed from established concepts in • Ecology • Ecological economics • National accounts • Statistical measurements

4. Why an accounting approach? • Accounting is funded on defined relationships between stocks and flows • The conceptual relationships and associated measurement boundaries are present in physical and monetary terms • Derivation of aggregates is an outcome of defined relationships and use of common measurement units • Within measurement boundaries the accounts are comprehensive and internally consistent

5. Basic Accounting Model • Stocks = Ecosystem Assets • Spatial area • Fixed characteristics (e.g., slope, altitude) • Variable characteristics (e.g., land cover, biodiversity) • Flows • Intra-ecosystem (within ecosystem) • Inter-ecosystem (between ecosystems) • Ecosystem services (to people)

6. Basic Accounting Model Ecosystem asset (spatial area) Ecosystem asset (spatial area) Exchanges of products & social interactions Economic & other human activity Economic & other human activity Human impacts Human impacts Ecosystem services Ecosystem services Ecosystem processes Ecosystem processes Ecosystem characteristics Ecosystem characteristics Intra-ecosystem flows Intra-ecosystem flows Inter-ecosystem flows

7. Model related to flows of ecosystem services Individual & societal wellbeing Benefits SNA & non-SNA Human inputs (e.g. labour, produced assets) Ecosystem services Ecosystem processes Ecosystem characteristics Intra-ecosystem flows Inter-ecosystem flows ECOSYSTEM ASSET

8. Ecosystem assets • Individual environmental assets • Timber resources • Aquatic resources • Mineral & energy res • Soil resources • Land • Water resources Ecosystem assets “Combinations of biotic communities and their abiotic environment functioning together in a spatial area” - excludes mineral & energy resources Bio-physical environment Two perspectives on environmental assets

9. Ecosystem Asset Measures Capacity of ecosystem asset to generate ecosystem services Expected ecosystem service flows (for a given basket of ecosystem services) Ecosystem condition (quality of ecosystem characteristics relative to reference condition) Ecosystem extent (spatial area/size of ecosystem)

10. Spatial Area Representation Ecosystem Accounting Unit LCEU type A LCEU type C BSU LCEU type B LCEU type A

11. Key Considerations Multi-disciplinary nature Accounting approach benefits Physical and monetary accounting Complements SEEA Central Framework Continued research and testing needed Potential to meet policy demands

12. Multi-disciplinary nature • Conceptual model in ecosystem accounting formed from established concepts in • Ecology • Economics • National accounts • Statistical measurement • Inputs from many disciplines in drafting • Cooperation among disciplines necessary in testing and research • Important role for National Statistical Offices

13. Accounting Approach Benefits Broad coverage related to defined set of components Comprehensive (not selective) measurement within boundaries Integrated and coherent relationships between stocks and flows Basis for organizing information Potential for aggregation and consistent time series

14. Physical and Monetary Accounting • Physical accounting relevant and important in assessment of changes in ecosystems • May be sufficient for many purposes • Monetary accounting allow the linkages of the physical flows with the monetary flows • Valuation remains challenging but it is important to clarify valuation principles of SNA and beyond

15. Complements SEEA Central Framework • Compilation of land accounts is a building block for ecosystem accounting • Measurement of individual assets inform ecosystem conditions and services • Combined presentations • Link information on environmental pressures (e.g. flows of natural inputs of water and energy and flows of residuals of air emissions and waste) to environmental impacts • Link responses (environmental protectionexpenditures, taxes and subsidies) to ecosystem changes

16. Continued Research and Testing Needed • Conceptually sound framework, providing broad platform for research & testing • Aspects requiring further research • Ecosystem degradation • Valuation approaches for accounting purposes • Need for testing across different ecosystems and countries • Delineation of spatial units • Classifications (spatial areas, ecosystem services) • Selection of indicators • Accounting tables and aggregation methods

17. Potential to Meet Policy Demands Framework for assessing environmental impact of economic activity Can assist in answering key policy questions (e.g. trade-off analysis) Integrated, multi-disciplinary framework suited to analysis of cross-cutting policy issues Potential basis for monitoring international processes Potential to scale to local, national and global levels

18. Proposed Next Steps • Research agenda implementation • Testing in countries • Formation of expert group • Three areas of research • Physical ecosystem accounting • Monetary ecosystem accounting • Communication and dissemination