Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis...

39
Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting European Environment Agency [email protected] Towards Green Economy (GE) & Green Growth (GG) EEA/Scientific Committee Workshop: 5 October 2011; EEA, Copenhagen Presentation-6: Measuring Progress of the Green Economy

Transcript of Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis...

Page 1: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Ecosystem Capital Accounts for Measuring Progress

Towards Green Economy & Green Growth

Jean-Louis WeberSpecial Adviser on Economic-Environmental Accounting

European Environment Agency

[email protected]

Towards Green Economy (GE) & Green Growth (GG)

EEA/Scientific Committee Workshop: 5 October 2011; EEA, Copenhagen

Towards Green Economy (GE) & Green Growth (GG)

EEA/Scientific Committee Workshop: 5 October 2011; EEA, Copenhagen

Presentation-6: Measuring Progress of the Green Economy

Page 2: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Presentation-6: Measuring Progress of the Green Economy

• 1. How can ecosystem accounting help on measuring progress?

• 2. Why a simplified approach?

• 3. What are the most relevant indicators that can be derived from the

accounts?

• 4. How can we make the links between ecosystem capital and ecosystem

services?

• 5. How to relate back to the system of national accounts and GDP?

Towards Green Economy (GE) & Green Growth (GG)

EEA/Scientific Committee Workshop: 5 October 2011; EEA, Copenhagen

Towards Green Economy (GE) & Green Growth (GG)

EEA/Scientific Committee Workshop: 5 October 2011; EEA, Copenhagen

Page 3: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Recurrent demands for improved economic indicators and aggregates• Historical pioneer “green accounting” projects: Norway, Canada, France, Philippines,

Indonesia, the Netherlands, Spain…• Rio1992, Agenda 21• UN SEEA1993 to “adjust” the UN System of National Accounts. SEEA revised in 2003• New SEEA revision by2012/13, including now a special volume on ecosystem accounts

and valuation• Recent initiatives:

– Beyond GDP Conference 2008– Potsdam 2008 G8+5 initiative and TEEB– Stiglitz/ Sen/ Fitoussi report on the measurement of economic performance 2009– New CBD Aishi-Nagoya Strategy 2010: demand for the inclusion of biodiversity and

ecosystem value into national accounts – World Bank’s WAVES Global Partnership for “Green Accounting” and Ecosystem Valuation– References to environmental accounts for measuring progress in Green Economy, Green

Growth, Resource Efficiency…• Initiative(s) in preparation for Rio+20• In Europe, new Regulation on Environmental Accounts: Eurostat (the economy-

environment interface) and the EEA (ecosystem capital accounts)

Page 4: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

UN manual for environmental-economic accounting: SEEA2003Enlargement of the System of National Accounts

Natural resources EcosystemsEconomic

assets (SNA) Non-economic

assets

Openingstocks

Opening stocks Opening State

SNAtransactions

and otherflows

Changes instocks

Changesin stocks

Economicactivities,

naturalprocesses,

etc.

Changesin state

Closing stocks Closing stocks

Closing state

Described in SNA

RM HASSAN - UN The System of Environmental and Economic Accounting (UN 2003) - RANESA Workshop June 12-16, 2005 Maputo

Volume 1

The SNA satellite accounts for the

environment

expenditure, taxes, hybrid accounts, physical flows,

sub-soil, energy, water, land,economic assets depletion

Volume 2

Ecosystem capital accounts

Ecosystem stocks and quality, ecosystem services, benefits and maintenance

costs…

Revision SEEA2012/13

Negative feedbacks of ecosystem degradation on production and wellbeing

Impacts on ecosystem capacity of delivering services/benefits

Page 5: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Products &

economic assets

Fossil energy & materials

Biomass/carbon

Water

Land functional services

Economy performance

Economic growthTradeValue-added, income, profit… ConsumptionInvestment Wealth (non-financial and financial assets)

Economic health(net savings, assets and debt quality, accountability, prices, well-being, knowledge)

Ecosystem potential (capacity to deliver services)

Ecosystem productivityFlowsAccumulation Stocks

Ecosystem health (biodiversity, integrity, resilience, interdependence)

Capital maintenance(to remediate degradation)

Accounting for the performance(s) of 2 co-evolving systems: resources, productivity and health

Economic systemEc

osys

tem

Use of natural

resources

Page 6: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

The narrative behind Ecosystem Capital Accounts: 1- Ecosystems deliver altogether multiple services

Source: Gilbert Long, 1972 A propos du diagnostic écologique appliqué au milieu de vie de l'homme. Options Méditerranéennes, 13 , CHIEAM, Montpellier, Juin 1972

Page 7: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

The narrative behind Ecosystem Capital Accounts: 2- Only a surplus is accessible for human use

Ecoproduct (of cycling and reproductive systems/ capital) are produced by means of other ecoproducts. The ecosystem production function includes a surplus ecoproduct that can be used by the economy. (from Anthony Friend 2004)

Economy

Basic eco-product

Non-basic eco-product

Sources: Kling/U Michigan_2005 & Friend/ISEE_2004

Necessary for ecosystem reproduction (conservation of ecosystem health, integrity, functions & services)

Surplus accessible for harvest/abstraction

Page 8: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

The narrative behind Ecosystem Capital Accounts: 2- Only a surplus is accessible for human use

Basic eco-product

Non-basic eco-product

Sources: Kling/U Michigan_2005 & Friend/ISEE_2004

Possible compensation = artificial input (irrigation,

energy, fertilizers, infrastructures…)

Challenge = maximise yields while maintaining natural functions and biodiversity

Necessary for ecosystem reproduction (conservation of ecosystem health, integrity, functions & services)

Surplus accessible for harvest/abstraction

Non-sustainable harvest/abstraction Economy

Page 9: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Natural resource: availability, appropriation, accessibility

• Available resource: the total resource (actual stocks and flows) which can be used in principle (but should to be shared between economy and nature…).

• Appropriated resource: the share of the total potential resource flows (flows which would be available in an ecosystem in the absence of human activities or flows from managed ecosystems) which is used (abstracted, harvested or destroyed during harvest). N.B.: Once used, the resource is considered as appropriated in total, even though one part is returned to the ecosystem.

• Accessible resource: the surplus (actual stocks and flows) which can be used considering 1) physical constraints (timeliness and location, cyclical risks, bio-chemical quality) & 2) the amount to be left to nature for ecosystem reproduction. N.B.: When returned to the ecosystem (leftovers in agriculture or forestry, water returns…) the resource destroyed or modified during the production process becomes accessible again.

Ecosystem capital accounts refer to accessible resource and intensity of use.

Page 10: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Accessible resource: carbon/biomass, freshwater, functional services

Accessible resource =Stocks (soil, forests, aquifers, reservoirs, landscapes…)Plus/minus change in stocks (from the previous year)Minus inaccessible stocks

Physical inaccessibility (deep aquifers …)Inappropriate quality (salted or polluted water, non arable land…)

Plus flows (NPP, effective rainfall…)Minus inaccessible flows

Physical inaccessibility (most of flood water, distance, non transportable resource, timeliness issues, water evaporated by irrigation…)

Inappropriate quality (polluted water)Maintenance of stocks (soil carbon, forests, aquifer level, dilution of

pollutants in rivers…)

Plus/minus adjustment for stress, risk

Page 11: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Example of accessible water adjustment: occurrence of soil water stressNumber of days when no water was available for plants in 2001, 1 km^2 grid

Provisional re

sults

Source: Blaz Kurnik, EEA, 2011

Page 12: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

The narrative behind Ecosystem Capital Accounts: 3 – Ecosystem capital produces altogether 3 broad types of services between which there is no compensation nor tradeoff: biomass/carbon AND freshwater AND functional services. Ecosystem capital potential (& degradation) can be measured by combining measurements of these 3 broad services (accessible resources).

Accessible carbon surplus

Accessible water surplus

Accessibleecosystem functional services

Total Ecosystem Capital Potential

&

Ecosystem Capital Degradation

Ecosystem Capital Depreciation (€)

Page 13: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

GDP,National Income,

Final Consumption at Purchasers’ price

Healthy ecosystem deliver services to the economy

& to the public well-being

Ecosystem assets/capital () Ecosystem assets/capital ()

The narrative behind Ecosystem Capital Accounts:4 – The simplified ecosystem capital accounting circuit

The narrative behind Ecosystem Capital Accounts:4 – The simplified ecosystem capital accounting circuit

Adjusted macro economic aggregates

Adjusted capital consumptionFinal demand at full price

Adjusted net domestic product (or net national income)

ES based economic

benefits (€)

ES based economic benefits (€)

ES based economic

benefits (€)

ES based economic benefits (€)

ES based economic benefits (€) ES based economic benefits (€)

Ecosystem degraded

by over-use ()

Economic system(including natural assets & ecosystem services

Economic system(including natural assets & ecosystem services (and €)

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Non-paid costs needed to remediate ecosystem

degradation (€)

Page 14: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Physical accounts of E-services Physical accounts

of E-services

t1

t2

()

t2 t1

Degradation of ecosystem capital

…based on remediation costs

…based on assets values

&

addition

€t2 t1 €

Valuation of E-services

Valuation of E-services

€ €Assessment of

remediation costs by issues

Asse

ts

Flow

s

()

Estimation of ecosystem capital depreciation: 2 possible ways

NPV & addition

NPV & addition

Asse

ts €

Calculation

of unit costs

Account of pressures

responsible of degradation

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Page 15: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

From theory to statistics and accountsTheoretical background (very incomplete…):

– Georgescu-Roegen (The Entropy Law and the Economic Process (1971), – Odum (emergy) – Resource depletion: Hotelling, El Serafy– System approach : Joel de Rosnay (The macroscope, 1975)– Dissipative structures: Prigogine (The New Alliance, 1986)– L'économique et le vivant: René Passet (1977)– Natural resource economy: Naredo (1987)– Urban metabolism: Duvignaud– Global biotic regulation: Gorshkov– Co-evolving systems: Norgaard– Ecosystem services: Long (1972), Costanza and De Groot, Millennium Ecosystem Assessment

(2003)– Interaction between scales: Hollin (“panarchy”)– Landscape ecology (UK)– Ecosystem units: socio-ecological systems (Gallopin, Carpenter, Rockström, MA2003…)– Ecosystem health (D. J. Rapport), resilience (the Resilience Alliance)

from economic-ecological theory to statistical practice and accounts : statistical units and classifications

Page 16: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

From economic-ecological theory to statistical practice and accounts

statistical units& classifications

Source: Joel de Rosnay, The Macroscope http://pespmc1.vub.ac.be/MACRBOOK.html

Page 17: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Main relations between classifications & statistical units in the revised SEEA

(from UNCEEA 2009 – EEA & FAO)

Monetary Statistics of Products

Physical Statistics of Products

Land Use: productive land

functions

Land Cover: biophysical land units

Ecosystems:Socio-ecological landscape units (SELU)

(terrestrial, marine & atmospheric)

Land Functions & Ecosystem Services

Institutional & Production Units

(sectors & industries)

Land Ownership(private & public)

Page 18: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

SNA & SEEA: economic and ecosystem assets

Dw

ellin

gs &

oth

er

build

ings

and

st

ruct

ures

Mac

hine

ry a

nd

equi

pmen

t

Cul

tivat

ed b

iolo

gica

l re

sour

ces

Inve

ntor

ies

Oth

er p

rodu

cts

Land

Min

eral

and

ene

rgy

rese

rves

Non

culti

vate

d bi

olog

ical

res

ourc

es

Wat

er a

nd o

ther

na

tura

l res

ourc

es

Inta

ngib

le a

sset

s (c

ontr

acts

, lic

ence

s…)

Land x xLand cover systems x x O x xBiomass/carbon x x O x OWater O xBiodiversity O O O O OSelf regulating capacity O O O O OHealth, overall regenerative capacity N N N N

x explicitly recorded as economic assetO partly or indirectly recorded as economic assetN not recorded, externality

Assets hold by ecosystem units (forests, agro-systems,

wetlands…)

Non produced assetsProduced assetsAssets hold by economic units (enterprises, government bodies, households…)

Adapted from Ivo Havinga and Daniel Clarke, 2011

Page 19: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Common International Classification of Ecosystem Services (draft EEA, UNEP & UNSD)

Theme Class GroupTerrestrial plant and animal foodstuffs

Freshwater plant and animal foodstuffs

Marine plant and animal foodstuffs

Potable water

Biotic materials

Abiotic materials

Renewable biofuels

Renewable abiotic energy sources

Bioremediation

Dilution and sequestration

Air flow regulation

Water flow regulation

Mass flow regulation

Atmospheric regulation

Water quality regulation

Pedogenesis and soil quality regulation

Lifecycle maintenance & habitat protection

Pest and disease control

Gene pool protection

Aesthetic, Heritage

Religious and spiritual

Recreation and community activities

Information & knowledge

Symbolic

Intellectual and Experiential

Provisioning

Regulation and Maintenance

Cultural

Nutrition

Materials

Energy

Regulation of wastes

Flow regulation

Regulation of physical environment

Regulation of biotic environment

CICES: Table E.2: Proposed Thematic, Class and Group Structure – source: EEA & Roy Haines-Young, Presented at UNCEEA 2010

Page 20: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011sampling, questionnaires

Land cover classification based on FAO LCCS3Land Cover Types (SEEA vol. 1)

zoning

and derived Land Cover Functional Units (SEEA vol.2)

Code Title 01 Artificial surfaces (including urban and associated areas) 01.a Artificial surfaces from 10 to 50 % 01.b Artificial surfaces from 51 to 100 % 02 Herbaceous crops 02.a Small size fields of herbaceous crops rainfed 02.b Small size fields of herbaceous crops irrigated or aquatic (rice) 02.c Medium to large fields of herbaceous crops rainfed 02.d Medium to large fields of herbaceous crops irrigated or aquatic (rice) 03 Woody crops 03.a Small size fields of woody crops 03.b Medium to large fields of woody crops 04 Multiple or layered crops 05 Grassland 05.a Natural grassland 05.b Improved grassland 06 Tree covered area 06.a Tree covered area from 10 to 30-40 % 06.b Tree covered area from 30-40 to 70 % 06.c Tree covered area from 70 to 100 % 07 Mangroves 08 Shrub covered area 08.a Shrub covered area from 10 to 60 % (open) 08.b Shrub covered area from 60 to 100 % (closed) 09 Shrubs and/or herbaceous vegetation aquatic or regularly flooded 09.a From 2 to 4 months 09.b More than 4 months 10 Sparsely natural vegetated areas 11 Terrestrial barren land 11.a Loose and shifting sand and/or dunes 11.b Bare soil, gravels and rocks 12 Permanent snow and glaciers 13 Inland water bodies 14 Coastal water bodies and inter-tidal areas 14.a Coastal water bodies (lagoons and/or estuaries) 14.b Inter-tidal areas (coastal flats and coral reefs)

01 Urban and associated developed areas 02 Medium to large fields rainfed herbaceous cropland 03 Medium to large fields irrigated herbaceous cropland 04 Permanent crops, agriculture plantations 05 Agriculture associations and mosaics 06 Pastures and natural grassland 07 Forest tree cover 08 Shrubland, bushland, heathland 09 Sparsely vegetated areas 10 Natural vegetation associations and mosaics 11 Barren land 12 Permanent snow and glaciers 13 Open wetlands 14 Inland water bodies 15 Coastal water bodies 16 Sea (pro memory)

Source: FAO (DiGregorio and Ramaschielo) & EEA (Steenmans & Weber) 2011

provisional

Page 21: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Ecosystem accounting and statistical units (continued)

SNA’s statistical units don’t record ecosystem degradation need for other units…

Theoretical units vs. observation units (proxies for collecting data)

• Theoretical units: characteristic systems into which natural and socioeconomic elements interact to transform ecosystem functions into goods and services:

– Functional units producing elementary services

– “Socio-ecological systems”, “socio ecosystems” or “Socio-ecological production landscapes” (the Japanese satoyama and satoumi)

• Observation units: – For which we can collect data in a systematic

way– Mostly surface units: “geo-systems”, land

cover units, functional administrative units, ownership units…

Japan Satoyama Satoumi Assessment, 2010.Satoyama-Satoumi Ecosystems and Human Well-being: Socio-ecological Production Landscapes of Japan – Summary for Decision Makers.United Nations University, Tokyo, Japan.

Japan Satoyama Satoumi Assessment, 2010.Satoyama-Satoumi Ecosystems and Human Well-being: Socio-ecological Production Landscapes of Japan – Summary for Decision Makers.United Nations University, Tokyo, Japan.

Page 22: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Land cover functional units (LCFU) & Socio-ecological landscape units (SELU)

Ecosystem statistical units for land: LCFU and SELU

Page 23: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

ZOOM: SELU in Central Europe

Page 24: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

ZOOM: Land cover functional units by SELU

Page 25: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Ecosystem-Economy integrated accounts

Stock

Natural production

Natural consumption

Storage/Accumulation

Stock

Extraction/ harvesting

Returns/ Formation (sectors)

Final Consumption (sectors)

Extraction/ harvesting

Returns/ Formation

Final Consumption

PHYSICAL BALANCES

QUALITY/HEALTH INDEXESQUALITY/HEALTH INDEXES

LINKAGE TABLESLINKAGE TABLES

USE OF ECOSYSTEM RESOURCE

…USE OF FOSSIL RESOURCE

…USE OF FOSSIL RESOURCE

EMISSIONS, RESIDUALS

From resource

From fossil resource

EMISSIONS, RESIDUALS

From resource

From fossil resource

EXPENDITURES

IMPORTS-EXPORTS

Actual

Virtual (embedded)

IMPORTS-EXPORTSIMPORTS-EXPORTS

Actual

Virtual (embedded)

To land accounts

To water accounts

To biodiversity indexes

VigourStability, integrity Resilience Taxes, voluntary payments

Ecosystems Economy

SEEA Part 2SEEA Part 1

Page 26: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

The draft framework

Tables by Ecosystem Units Tables by Economic Units

Countries and biophysical geographical breakdowns or administrative regions

Countries and administrative regions or biophysical

geographical breakdowns

Ecosystem statistical and accouting units: socio-ecological landscape units, elementary functional units

(land cover, river reaches…), ecosystem assets, ecosystem service units

Economic statistical and accouting units:

institutional units, establishments, economic assets, commodities

[A] Land cover stocks and flows basic account: Gross and Net Land Cover Change

Land use statistics

[B] Ecosystem Capital Carbon/biomass Account: Net Ecosystem Carbon Balance (NECB)

& Net Ecosystem Accessible Carbon Surplus (NEACS)

Physical supply and use tables & economic assets accounts. Agriculture, forestry & fishery statistics

[C] Ecosystem Capital Water Account: Total Ecosystem Accessible Fresh Water (TEAW)

& Net Ecosystem Accessible Fresh Water Surplus (NEAWS)

Physical supply and use tables & economic assets accounts. Water use statistics

[D] Landscape green infrastructure accounts: Landscape Ecosystem Potential (LEP),

Green Accessible Landscape Infrastructure (GALI) & Rivers Ecosystem Potential (REP)

[E] Ecosystem Capital Biodiversity Account: Biodiversity Infrastructure Integrity (BII) & Ecosystem's Biodiversity Rating (EBR)

[F1] Ecosystem Total Potential Account, Net Change & Ecosystem Capital Degradation (ECD),

in Ecosystem Potential Unit Equivalents (EPUE)

[F2] Account of Territorial Ecosystem Capital Degradation (TECD) by Stress Factors (in EPUE)

[G] Demand and Accessibility to Ecosystem Services: Ecosystem Carbon/biomass per capita,

Ecosystem Fresh Water per capita, Green Infrastructure Neighbourhood Ecosystem Services (GINES)

[I] Estimation of unit costs of ecosystem capital restoration by Stress Factors

Environmental protection and management expenditure (part)

[J] Ecosystem Capital Depreciation: Territorial Consumption of Ecosystem Capital in money

[K] Account of Ecosystem Capital Degradation & Depreciation Embedded into Imports and Exports,

in EPUE & in money

[M] Economic aggregates and additional adjustments for CEC, in money: Gross Domestic Consumption of Ecosystem Capital

(GDCEC), GDCEC Adjusted Net Domestic Product, Final Consumption at Full Price (including GDCEC)

Jean-Louis Weber 22 September 2011

Ecos

yste

m T

otal

Po

tenti

alEc

osys

tem

D

epre

ciati

on

[H] Ecosystem Physical Balance Sheet: Stocks and Change of Physical Assets & Physical Liabilities, in EPUE

[L] Account of Macro-economic Benefits induced by Sustainable Ecosystem Services: Degradation-Adjusted Total Induced Value Added (by SELU & ISIC)

[N] Ecosystem Financial Balance Sheet: Change of Financial Assets and Stocks and Change of Financial Liabilities

Ana

lyti

cal a

nd

repo

rting

uni

ts,

clas

sific

ation

sBa

sic

acco

unts

Polluting emissions and waste generation by sectorsAgriculture, forestry & forestry statistics, Land use accounts

Basic accounts

Synthesis tables in physical units

Monetary accounts

Page 27: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

The basic accounts

by ecosystem units by economic sectors

Page 28: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

The synthesis tables

by ecosystem units by economic sectors

Page 29: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

The monetary accounts

by ecosystem units by economic sectors

N

Page 30: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

About ecological debts…

• Territorial CEC is a debt to national future generations, it is not transferable• CEC Embedded into imports and exports are both debts and should not be consolidated• Gross Domestic CEC = Territorial CEC + Imported CEC [meaning: CEC of Production]• Net Domestic CEC = Gross Domestic CEC – Exported CEC [meaning: CEC of Final Consumption]• Physical Debts and Monetary Debts are recorded separately• Consolidation rules for debts:

– Physical debts are not transferable– When created by physical debts, monetary debts are not mechanically extinguished by repayment but

by the extinction (remediation) of the physical debt itself;– Because physical ecosystem capital assets are not valued, monetary debts cannot be consolidated with

monetary ecosystem non-financial assets; – Monetary debts can be consolidated with financial ecosystem capital assets in the context of

international mitigation systems if they include initial allocations of (non transferable) ecosystem capital rights and/or recording systems for ecosystem improvement and consolidation rules.

– The physical counterparts (units: Ecosystem Potential Unit-Equivalents) of approved allocations and improvement s are not transferable. However they can be leased to ecological debtors (countries, business…)

Bertrand de Jouvenel 1968: “Because National Accounts are based on financial transactions, they account nothing for Nature, to which we don’t owe anything in terms of payments but to which we owe everything in terms of livelihood.”

Page 31: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Simplified ecosystem capital accounts in Europe • Make it feasible NOW – keep it simple• Don’t miss important issues: need a good checklist• All ecosystems: land/sea/atmosphere, and for land: urban,

agriculture, forest, other natural and soil.• 6 accounts/indexes for 1 diagnosis:

– 1-Biomass-Carbon // 2-Water // 3-Land-landscape // 4-Biodiversity // 5-Dependency // 6-Disease prevalence

– Diagnosis (instead of mere additions) and quantification: the “ecosystem distress syndrome” approach combined with basic balances…

• Physical accounts first, followed by valuation of selected flows and of ecosystem depreciation (on the basis of physical degradation and restoration costs – no valuation of stocks)

• Annual accounts (t-1 and time series) to meet the policy agenda• For EU27…

Page 32: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Tiered approach to ecosystem capital accounting

Impacts assessments, costs & benefitsLocal government, Agencies assessment Corporate accounting results, rating, tradeMarkets of specific ecosystem services, PES

Accounting guidelines, norms

Action level:

Local scale, management,

Site level, case studies,

Projects,

Business

Beyond GDP AccountingMeasurement of progress towards Green Economy/ Green Growth/ Sustainable Development/ Resource efficiencySector accountsGreen taxes

SEEA 2012/13SEEA 2012/13

FrameworkFramework

National & regional government: Ministries of economy,Environmental agencies,Strategic planning, Statistical offices, Courts

Global trade of ecosystem permits Programmes assessment (e.g. REDD+)International financial standards (for loans, SDR…)Contribution to international organisations

Simplified accountsGlobal scale:

International Conventionsmonitoring

International comparisons

Markets framing & regulation

Scales Methodologies Expected outcomesScales Methodologies Expected outcomes

Page 33: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

t0

Total ecosystem capital potential & change

t1

Improvement

Degradation

Page 34: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Ecosystem physical degradation, sustainable benefits from ecosystem services and non-paid maintenance costs

Consumption of ecosystem capital (non-paid costs)

Sustainable benefits

(income from key ecosystem services)

Sustainable use

coefficients

Economic statistics & national accounts

Mean restoration

prices Improvement

Degradation

Sustainable benefits

(Value Added from key ecosystem

services)

Page 35: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Integration of resource efficiency indicators, ecosystem capital accounts & national accounts

GDP

Fossil energy

Sand, gravel…

Biomass/ carbon

Freshwater

Land/ Landscape

Biodiversity

Atmosphere/ carbon assimilation

Biomass/ carbon

Sea/ carbon assimilation

CO2

DMISand/gravel

DMIWater

Metals,chemicalsDMI/ other

1st decoupling: from material/energy inputs

2nd decoupling: from environmental impacts

Sea/fisheries

Inland Ecosystems

DM

I Car

bon

Integrated Carbon

Accounts

Water Integrated

water accounts

Page 36: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Final Consumption at

Full Price of Commodities

Adjsuted Net Domestic Product // Adjusted Net National

Income

Adjustment of National Accountsfrom Consumption of Ecosystem Capital

• Adjusted Net Domestic Product // Adjusted Net National Income

• Final Consumption at Full Price

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Page 37: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

or

Is there a Green Multiplier for Green Growth/Green Economy?

Progress must be measured anyway…

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Page 38: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Key Indicators and Aggregates from Ecosystem Capital Accounts• Net Ecosystem Accessible Carbon Surplus (Use/NEACS reflects intensity of use; it

integrates resource efficiency and ecosystem)• Net Ecosystem Accessible Fresh Water Surplus• Green Accessible Landscape Infrastructure (and demand of services in the

Neighbourhood of human settlement (GINES))

• Net Total Ecosystem Capital Potential and Ecosystem Capital Degradation (integrates accessible carbon, water and landscape and biodiversity rating ; ECD is decomposed by stress factors basis to calculate Consumption of Ecosystem Capital in €)

• Final Consumption at Full Price (the full cost of commodities in € integrates purchasers’ prices and non-paid domestic consumption of ecosystem capital (CEC), and relates to unfair trade and ecological debts)

• Imports at Full Price (total of imports at CIF price and Ecosystem capital depreciation virtually embedded into imports)

• GDCEC Adjusted Net Domestic Product (or/and Net National Income, or/and Net Savings) (complete adjustment of Net Product, Net Income or Savings includes in addition the depletion of subsoil resource.

Page 39: Ecosystem Capital Accounts for Measuring Progress Towards Green Economy & Green Growth Jean-Louis Weber Special Adviser on Economic-Environmental Accounting.

Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011

Thank you!

Jean-Louis [email protected]@gmail.com