UNCCD 2nd Scientific Conference

1. The Bigger Picture on Drylands:
Using a Natural Capital Accounting
Approach
UNCCD 2nd Scientific Conference
April 10th, 2013
Hannah Behrendt, Program Economist WAVES
Agriculture and Environmental Services Department, The World Bank

2. The problem with GDP…
“Gross domestic product, the leading economic
measurement, is outdated and misleading.”
“It's like grading a corporation based on one
day's cash flow and forgetting to depreciate
assets and other costs.”
(J. Stiglitz, Nobel prize, Economics)

3. Comprehensive Wealth and Sustainable Development
• Change in GDP tells us if Prosperity and well-being
growth is occurring, changes
in wealth tell us if growth is
sustainable
• Economic development is a Long-term growth
process of building wealth
and managing this portfolio of
assets
Wealth
Manufactured Human and
capital social capital
Natural capital

4. Why natural capital accounting (NCA) is important
Natural capital is a critical asset, especially for less developed
countries, where it makes up a significant share (36%) of total wealth.
Wealth of Low Income Countries
5%
2008 US$ Per Capita Natural Capital Composition
Total Wealth 7,670 9%
Crop, Pasture Land, Forest
Produced Capital 1,117 9%
Natural Capital 2,403 Protected Areas
Intangible Capital 4,290 77% Energy
Net Foreign Assets -141
Minerals
Source: Authors’ calculations based on World Bank data.

5. Accounting for Natural Capital
All countries rely on the System of National
Accounts (GDP) for economic planning and
assessment of performance, but some
information is missing or invisible.
Natural Capital Accounting (NCA):
a management tool
• Provides crucial information to manage
natural resources
• Builds this information as satellite
accounts to the System of National
Accounts to fill the information gap

6. Managing Green Growth: Questions…
Statistics for better management of natural capital to support growth & poverty reduction
What is the
real How do we weigh tradeoffs among competing How much
contribution users? should be
of Natural invested in
Capital to natural
GDP and capital, like
household How do we protected
How do we How can we
livelihoods? model the areas?
balance land make
impacts of
use for tourism, ecotourism
changes in
agriculture and work for the
resource pricing,
other ecosystem local
removal of
services like communities, to
subsidies on
carbon storage ensure social
economic
or water and economic
activities, on the
quality? inclusion?
poor?

7. SEEA – System of Environmental-Economic Accounting
• SEEA Central Framework: adopted as an
international standard by the UN Statistical
Commission in 2012
• Will be augmented by two other parts of the SEEA:
• Experimental Ecosystem Accounts
• SEEA Extensions and Applications
• Consistent with and complementing System of
National Accounts

8. The Bigger Picture
• SEEA – An integration framework that
measures interaction between economy
and environment
• Brings together, in a single
measurement system, information on
water, minerals, energy, timber, fish,
soil, land and ecosystems, pollution
and waste, production, consumption
and accumulation.
 Bigger picture on DLDD

9. WAVES Global Partnership for Natural Capital Accounting
Global Partnership— including developing and developed partner
countries (Botswana, Colombia, Costa Rica, Madagascar, Philippines,
Himachal Pradesh (India), Vietnam, Australia, Canada, Denmark, EU,
France, Germany, Japan, Norway, UK, Spain, The Netherlands), UNDP,
UNEP, UN Statistical Commission, NGOs, academics, private sector,
others to:
• Implement natural capital accounting where there are
internationally agreed statistical standards –the SEEA
• Develop methodology for the more difficult to measure natural
capital – ecosystem services
• Demonstrate how NCA can support decision-making for
sustainable development

10. How natural capital accounting can help
Issues How can NCA help?
Colombia: How to meet growing Water and ecosystem accounts
urban demands for water and will help assess future investment
avoid devastating floods? needs and strengthen water
management
Madagascar: How to provide Land accounts can help determine
sustainable finance for the value and potential
management of biodiversity-rich contribution from tourism, climate
protected areas? regulating services, and water
supply provision
Botswana: How to achieve Water accounts will help
economic diversification? determine best use of stressed
resources

11. Botswana Water Accounts: Sectors’ share in GDP, formal
employment & water use (2011)
50%
% of GDP
45%
40%
% of formal
35% employment
30%
% of water
25% consumption
20%
15%
10%
5%
0%

12. Ecosystem Accounting
Implement SEEA standards & pilot SEEA ecosystem accounts:
Important issues:
• Prioritizing ecosystem services: where can we make progress quickly
• Scaling up from specific ecosystems to national level
• Valuing public lands, global commons
• Thresholds, irreversibilities, low probability-high impact events
Valuation techniques:
• Market prices for provisioning & recreational services
• Ecological production functions for regulating services, drawing on local
and international models such as InVest, ARIES and others

13. Scaling up: The ’50:50’ Initiative
Building on the Gaborone Communiqué on NCA
from the African Sustainability Summit:
62 (32 developing) countries signed the NCA
Communiqué, endorsing:
• Implement natural capital accounting where there are
internationally agreed statistical standards –the SEEA
• Develop methodology for the more difficult to measure
natural capital – ecosystem services
• Demonstrate how NCA can support decision-making for
sustainable development
Next steps: widespread, rapid rollout of SEEA

14. Many thanks for your attention!
www.wavespartnership.org