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STRENGTHENING INDICATORS AND ACCOUNTING SYSTEMS FOR NATURAL CAPITAL
cost recovery charges, resource costing, subsidy
reform and the polluter pays principle (taxes, liability,
regulation). The development and greening of markets
and supply chains e.g. via green public procurement,
can also help (see generally Chapters 5 to 7).
National accounts currently record household final
consumption as well as imports and exports at
purchasers’ prices. Normal market prices cover
production and distribution costs (intermediate
consumption, labour, taxes and financial costs), the
entrepreneur’s profit plus an allowance for compensating
fixed capital depreciation resulting from wear and
tear (as noted above). In national accounts, no such
element is recorded for the depreciation of the ecosystem
capital. This means that purchasers’ prices are
underestimated in cases where commodities originate
from degrading ecosystems.
If we set the target of maintaining ecosystem capacity
in a good state (e.g. ‘halt biodiversity loss’, “ensure
sustainable development” or the many equivalent
regional or national objectives), the implicit value of
ecosystem degradation potentially attached to
each commodity unit needs to be considered as a con-
cealed negative transfer to future generations and/
or – in the case of international trade – from suppliers
to consumers.
Measuring and valuing these concealed transfers is
important to assess the reality of each country’s economic
performance. From a well-being perspective,
this sheds light on the sustainability of consumption
patterns and on distributional effects resulting from
distorted international trade. Systematic implementation
of product traceability – starting to be done though
fair trade or for organic products (see Chapter 5) –
and printing the full price on the product would help
the many consumers keen to act responsibly to make
informed choices. It would also be a measure to
help protect sustainably-managed industries against
arguably unfair competition from ecosystem-degrading
competitors who do not pay for their degradation and
thus receive an implicit subsidy (see Chapters 6 on
subsidies and 7 on full cost recovery and polluter pays
principle).
This type of measurement approach would also help
in policy design and lead to future GDP statistics being
less out of step with nature.
TEEB FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 3: PAGE 26
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