Hannah BEHRENDT "The bigger picture on drylands - using a natural capital accounting approach"
The Bigger Picture on Drylands:Using a Natural Capital Accounting Approach UNCCD 2nd Scientific Conference April 10th, 2013 Hannah Behrendt, Program Economist WAVESAgriculture and Environmental Services Department, The World Bank
The problem with GDP…“Gross domestic product, the leading economic measurement, is outdated and misleading.” “Its like grading a corporation based on one days cash flow and forgetting to depreciate assets and other costs.” (J. Stiglitz, Nobel prize, Economics)
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
Why natural capital accounting (NCA) is importantNatural capital is a critical asset, especially for less developedcountries, 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 MineralsSource: Authors’ calculations based on World Bank data.
Accounting for Natural CapitalAll countries rely on the System of NationalAccounts (GDP) for economic planning andassessment of performance, but someinformation 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
Managing Green Growth: Questions…Statistics for better management of natural capital to support growth & poverty reductionWhat is the real How do we weigh tradeoffs among competing How muchcontribution users? should be of Natural invested in Capital to natural GDP and capital, like household How do we protected How do we How can welivelihoods? 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?
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
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
WAVES Global Partnership for Natural Capital AccountingGlobal Partnership— including developing and developed partnercountries (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
How natural capital accounting can helpIssues How can NCA help?Colombia: How to meet growing Water and ecosystem accountsurban demands for water and will help assess future investmentavoid devastating floods? needs and strengthen water managementMadagascar: How to provide Land accounts can help determinesustainable finance for the value and potentialmanagement of biodiversity-rich contribution from tourism, climateprotected areas? regulating services, and water supply provisionBotswana: How to achieve Water accounts will helpeconomic diversification? determine best use of stressed resources
Botswana Water Accounts: Sectors’ share in GDP, formal employment & water use (2011)50% % of GDP45%40% % of formal35% employment30% % of water25% consumption20%15%10%5%0%
Ecosystem AccountingImplement 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 eventsValuation 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
Scaling up: The ’50:50’ InitiativeBuilding 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 developmentNext steps: widespread, rapid rollout of SEEA
Many thanks for your attention! www.wavespartnership.org