Out with the old and in with the new – extending the production boundary of GDP to account for ecosystem services

It is widely understood that GDP, as a measure of economic activity, fails to recognise the depletion or degradation of natural capital. A key feature of national accounting (which underpins GDP) is the recording of transactions between economic units, households, business and government. However, it does not recognise transactions between economic units and the environment. The environment provides services to economic units, often referred to as ecosystem services. Accounting for ecosystem services is required to bring measures of the depreciation and degradation of natural capital in line with measures of the deprecation of built capital that is already included in GDP.

While the generic concept of ecosystem services provides an excellent platform for discussion, the ongoing lack of clarity surrounding the definition, classification and measurement of ecosystem services, is a barrier to collaboration across disciplines and its inclusion in measures of GDP.

Our paper applies the principles of national accounting to bring additional rigour and consistency to the discussion on ecosystem services. The key outcome of the paper is a framework for describing the relationship between ecosystems and economic activity that can be used to consistently define, classify, measure and account for ecosystem services.

Mark Eigenraam & Carl Obst (2018) Extending the production boundary of the System of National Accounts (SNA) to classify and account for ecosystem services, Ecosystem Health and Sustainability, DOI: 10.1080/20964129.2018.1524718

May 2017 Newsletter

Welcome to our IDEEA Newsletter May 17. In this month’s edition you will find links to: Ecosystem Accounting technical recommendations Ecosystem Accounting 101 Corporate ecosystem accounting Measuring the Poverty-Environment Nexus – Ecosystem accounting in practice

Ecosystem Accounting consultation – have your say!

IDEEA Group’s principals have been instrumental as consultants to the UNSD in preparing a Consultation Draft of SEEA Experimental Ecosystem Accounting : Technical Recommendations. These provide the latest thinking on how to implement Ecosystem Accounting, and are open to all to offer comments or suggestions via a Peer Review Comment Form. The background and aims of this process are explained in this cover note. With the 28th April deadline for comments fast approaching, IDEEA Group urges everyone interested in the practical application of Ecosystem Accounting to review the document and provide your comments. As a primary author, IDEEA Group’s Carl Obst will lead the effort to integrate yourcomments into the next iteration of SEEA Ecosystem Accounting guidelines.

Ecosystem Accounting 101

This week IDEEA Group attended the Oceania Ecosystem Services Forum hosted by ACES in Brisbane. We delivered a workshop on Ecosystem Accounting 101 that was strongly attended, and well received. A handout of key slides from that workshop is attached.

If you’re interested in hosting an IDEEA Group Ecosystem Accounting workshop, or in receiving more in-depth training, please contact us via our website.

Measuring Sustainable Tourism – UNWTO

The Need

World-wide, tourism is worth $US 7.2 trillion, which represents almost 10% of global GDP. While tourism depends heavily on the continuing flow of ecosystem services, including places for recreation such as beaches, reefs and forests, it can also place great strains on these fragile natural ecosystems.

Tourism represents a significant opportunity and challenge for sustainable development across some of the world’s most impoverished and ecologically vulnerable regions. This is reflected in a number of the UN Sustainable Development Goals (8, 9, 14 & 15) and in its declaration of 2017 as the International Year of Sustainable Tourism for Development.

The UN World Tourism Organisation (UNTWO) is leading the industry to adopt more sustainable practices, building on 25 years of research since the 1992 Rio Convention. One of today’s most critical challenges is to create destination based reporting standards that effectively integrate economic, social and environmental dimensions of local tourism impacts, to assess whether sustainable development principles are being effectively applied in practice.

The Project

The Measurement of Sustainable Tourism (MST) project was established by UNWTO in 2015. Since then they have relied on IDEEA Group to help establish and articulate MST work streams, and to facilitate engagement with a wide range of experts. IDEEA Group has been instrumental in the planning and delivery of key MST initiatives, including:

The 6th International conference on tourism statistics to be held in June 2017 will focus on measuring sustainable tourism, and aims to secure ministerial level commitment to a Manila Declaration of MST principles. IDEEA Group will once again play a leading role to facilitate the success of this conference. http://asiapacific.unwto.org/event/6th-unwto-international-conference-tourism-statistics-measuring-sustainable-tourism

The Outcomes

Applying SEEA principles to the integration of economic, social and environmental information to establish a statistical framework for MST at the local destination level has already delivered significant results in terms of participation and growing commitment from industry and government stakeholders at all levels.

Key tourism stakeholders are beginning to take MST principles into account, such as when planning transport infrastructure development, and for standardising and coordinating collection and publication of relevant data at the destination based level.

Another key outcome has been to provide a cross-functional platform for discussing the interactions and dependencies between economic and social development, environmental protection and mitigation of potential risks for the sustainable growth of tourism.

Finally, MST provides the potential to directly compare policy assumptions and outcomes across regions and countries, and so lead to more coordinated and equitable commitments to achieve sustainable development goals.

Why so much interest in Environmental-Economic Accounting?

IDEEA Group Director Carl Obst recently published an article on environmental-economic accounting as part of The Conversation’s series on ‘The Way We Measure’. With over 3,000 reads and more than 800 shares – more than for any previously published – it “clearly struck a chord” according to The Conversation’s Deputy Editor, Business and Economy Josh Nicholas. Here’s the link if you want to find out why: