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STRENGTHENING INDICATORS AND ACCOUNTING SYSTEMS FOR NATURAL CAPITAL Improving measurement can be a long process but it is of fundamental importance to arrive at good solutions. In the long term, measurement is often a good investment and can be a cost-effective part of the answer – spotting risks early and addressing them efficiently can help avoid much higher damage costs later on. As sections 3.3 and 3.4 show, indicators feed directly into macro-economic aggregrates and thus form an integral part of accounting systems. <strong>TEEB</strong> FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 3: PAGE 22 Copyright: André Künzelmann, UFZ
3.3 STRENGTHENING INDICATORS AND ACCOUNTING SYSTEMS FOR NATURAL CAPITAL ‘GREENING’ OUR MACRO-ECONOMIC AND SOCIETAL INDICATORS “Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance.” Stiglitz-Sen-Fitoussi Report on the Measurement of Economic Performance and Social Progress, 2009. 3.3.1 TRADITIONAL APPROACHES TO MEASURING WEALTH AND WELL-BEING A range of ‘traditional’ indicators are used to measure countries’ economic performance and in policy making, These include: GDP and GDP growth, national income, final consumption, gross fixed capital formation (GFCF), net savings, international trade balance, international balance of payments, inflation, national debt, savings rates and so on. On the social side, some of the indicators most commonly used relate to unemployment, literacy, life expectancy and income inequality. A useful combined indicator that straddles more than one domain is the human development index (HDI). These conventional aggregates feed into and are an integral part of national accounting systems (see 3.4 below). However, they only tell part of the story as they do not systematically cover the loss of biodiversity. Indicators for biodiversity and ecosystem services are already a step in the right direction towards complementing them. As section 3.2 showed, we now have a swathe of environmental indicators, from water quality to more recent measurements of CO 2 emissions. Many argue that there are in fact too many separate tools to have anywhere near as much public, press and political attention as the consolidated traditional economic indicators. CO 2 is starting to be an exception, but while helpful, does not address ecosystems and biodiversity directly. We can illustrate the slow process of change through the example of trade deficits e.g. where imports exceed exports. These feature every week in many newspapers or magazines yet there is little mention of green trade deficits i.e. the impacts on biodiversity related to imports and exports of goods and services. The tool of ecological footprint analysis (see Box 3.4 above) can help to fill this gap by helping to identify creditor and debtor nations from a biodiversity perspective. ‘Water footprints’ can also offer useful information to consumers – to put it simply, when bananas are imported, so are the water and the nutrients from the soil. Certain countries – notably the most developed countries – are significant environmental debtor nations. Most developing countries are creditor countries. However, there is little reflection of this debt or credit in traditional measurement and decision making or in market signals. Some countries have responded to the understanding that a continued growth in their footprints cannot go on for ever and are using the footprint as a policy target to reduce their environmental impacts or increase resource efficiency (see Box 3.4). The next section shows how traditional approaches can be gradually adapted to support more sustainable measurement. 3.3.2 TOOLS FOR MORE SUSTAINABLE MEASUREMENT Part of the solution is understanding that for many of the economic terms used in everyday policy making, there are already parallels that take nature into account. Economic assets – natural assets. The concept of capital derives from economics: capital stocks (assets) provide a flow of goods and services which contributes <strong>TEEB</strong> FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 3: PAGE 23
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Part I: The need for action Ch1 The
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ThE EcoNoMIcs of EcosysTEMs AND BIo
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THE GLOBAL BIODIVERSITY CRISIS AND
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1.2 THE GLOBAL BIODIVERSITY CRISIS
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• Enough food could be produced o
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MArINE sysTEMs THE GLOBAL BIODIVERS
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1.2.3 WHAT IS DRIVING THESE LOSSES?
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1.4 THE GLOBAL BIODIVERSITY CRISIS
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EfErENcEs THE GLOBAL BIODIVERSITY C
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THE ECONOMICS OF ECOSYSTEMS AND BIO
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10.1 WHY VALUING ECOSYSTEM SERVICES
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RESPONDING TO THE VALUE OF NATURE B
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10.2.2 BETTER LINKS TO MACRO- ECONO
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10.3 Investing in natural capital s
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as well as the value for money and
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Global National or Regional Local T
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10.4 By taking distributional issue
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has origins and impacts beyond bord
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The ‘Nobel Prize’*-winning econ
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10.5 Biodiversity and ecosystem ser
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Rewarding the provision of services
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Making this a reality will require
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GHK, CE and IEEP - GHK, Cambridge E
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INTEGRATING ECOSYSTEM AND BIODIVERS
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4.4 INTEGRATING ECOSYSTEM AND BIODI
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Endnotes INTEGRATING ECOSYSTEM AND
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Economic valuation methods INTEGRAT
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ANNEx 2: sTAGEs of A PoLIcy AssEssM
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Chapter 5: Rewarding benefits throu
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REWARDING BENEFITS THROUGH PAYMENTS
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5.1 REWARDING BENEFITS THROUGH PAYM
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REGULATORY BASELINES AND ADDITIONAL
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could have adverse consequences for
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• some contained an element of te
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• ancillary provisions e.g. possi
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5.4.2 GREENING INTERGOVERNMEN- TAL
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financial flows involved. Building
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considerable patience as such optio
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CERTIFICATION OF SUSTAINABLE FISHER
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While certification systems can sig
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Endnotes REWARDING BENEFITS THROUGH
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44 http://www.mekongtourism.org/sit
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Chapter 6: Reforming Subsidies Chap
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REFORMING SUBSIDIES Key Messages of
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6 Chapter 6 addresses the need for
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6.1.2 HOW BIG ARE EXISTING SUBSIDIE
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6.2 6.2.1 DISTINGUISHING BETWEEN
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through provision of water and ener
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6.3 6.3.1 AGRICULTURE Subsidies to
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Box 6.4: The EU Common Agricultural
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Second, it has to be borne in mind
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• increases the producer price of
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REFORMING SUBSIDIES Box 6.9: Removi
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In the agriculture sector, the pric
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Some consumer energy subsidies may
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6.4 “People who love soft methods
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6.4.2 RESISTANCE TO CHANGE Subsidie
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The multiple policy objectives ofte
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REFORMING SUBSIDIES Social impacts
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The G-20 Heads of State have recent
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REFERENCES Agnew, D.J.; Pearce, J.;
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OECD - Organisation for Economic Co
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Bernd hansjürgens, Christoph Schr
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Key Messages of Chapter 7 Rewarding
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7.1 BASIC PRINCIPLES FoR hALTING oN
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7.2 REGULATING To AvoID DAMAGE: ENv
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y reducing the release of pollutant
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y reducing uncertainties with respe
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This equivalence can involve the sa
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PoTENTIAL BENEFITS oF oFFSETS AND B
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A biodiversity offset should be des
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7.4 SETTING MoRE ACCURATE PRICES: M
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Market-based instruments can be des
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China’s first water use rights sy
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PoTENTIAL CoST SAvINGS ThRoUGh MBIS
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Despite the potential described abo
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Non-market valuation studies can he
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PoLLUTIoN AND oThER DAMAGING ACTIvI
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The 1973 CITES treaty (Convention o
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7.6 MAKING IT hAPPEN - PoLICy MIxES
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has shown the critical need to stre
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Gutman, P. and Davidson, S. (2007)
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· ·· · · · · · · · · ·
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T H E E C O N O M I C S O F E C O S
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