New global accounting standards will ‘make ecosystems count’
International accounting standards for ecosystem services are being developed, allowing environmental costs to be included in economic data and policy, says Leony Aurora
The United Nations Statistics Division has drafted the Experimental Ecosystem Accounting, which highlight the concepts, boundaries and definitions of ecosystem accounting, said Carl Obst, editor of the United Nations System of Environmental and Economic Accounts (SEEA), which publishes the guidelines.
Even though the accounting system is still incomplete, it is ‘a significant step forward’ and Obst is confident that the ‘accounting approach can work, including for ecosystems’.
Experts on ecosystem services have repeatedly called on governments to include environmental costs in measuring economic development progress instead of relying mainly on Gross Domestic Products (GDP) figures. ‘Make ecosystems count!’ was the theme of this year’s Annual International Ecosystem Services Partnership Conference, where Obst was speaking in front of about 350 experts who took part in the week-long event held in Bali at the end of August 2013.
GDP, developed during the economic crisis of the 1930s, was only intended to measure economic activity and did not include ecosystem services, environmental costs and natural capital, said Obst. It focuses on flows, namely on production and consumption, and not on stocks, that is, the capital—including natural—that generate the flows.
‘The sustainability question is what’s happening on the stocks’, he added.
The need to include environmental costs and go beyond GDP has been recognized since as early as the publication of the Brundtland Report in 1987. Progress on actually developing accounting standards and systems that are as robust and comparable as the GDP, however, has been slow.
‘It’s only at the point when you think that our stocks are really disappearing, and you can visibly see it… that you really want to start including that environmental information’, said Obst.
A 2009 study by Johan Rockström and others shows that the boundaries of Earth’s nine life-support systems that make the planet habitable have been crossed, namely, those that measure climate change, biodiversity loss, and biogeochemical content. A newer study puts the cost of using the environment at around USD 20 trillion a year, up substantially on the last estimate from 1997, said Robert Costanza, Chair of Public Policy at the Australian National University’s Crawford School of Public Policy.
While there is no consensus yet on ecosystem accounting, there are other elements that look at environmental issues that have been further developed. The SEEA Central Framework provides the guidelines to account for physical flows, such as energy and emissions; environmental activities, including ‘green’ employment; natural resources, such as the stocks and depletion of energy resources and timber; and land use.
‘The ambition should not be to set up a perfect set of information but to somehow put together information that is useful for decision-makers’, said Obst.
There is already real benefits in organizing the existing information and generating new information, which is what an accounting standard will promote. Governments could also start with accounting for natural capital for which measurement methods are already better developed and accepted, such as mineral resources.
‘You want to do this gradually, build it up’, said Obst.
Most importantly, both ecosystem services and conditions—or flows and stocks—need to be measured.
‘You can’t be sufficiently confident that you can infer the condition from the flows, and as a result, [measuring] ecosystem services is necessary but not sufficient. At the same time, [measuring] ecosystem condition is necessary but not sufficient either because in order to assess condition, you need to have some idea of how it’s being used’, said Obst.
Edited by Robert Finlayson
The conference was supported by the CGIAR Research Program on Forests, Trees and Agroforestry‘s component on landscape management for environmental services, biodiversity conservation and livelihoods