UN Adopts Environmental-Ecosystem Economic Accounting Approach

Not Just GDP As Measure Of Prosperity

18 Mar 2021 by The Water Diplomat
NEW YORK NY, United States

Karin Kemper
Karen Kemper

The United Nations has adopted a new System of Environmental-Economic Accounting – Ecosystem Accounting (SEEA EA) to replace GDP as a measure of economic prosperity, ensuring that natural assets, such as wetlands and water filtration ecosystems, are included in value calculations that impact policy and decision-making at every level.

The framework was adopted at the 52nd session of the UN Statistical Commission earlier this month following a decade-long development process involving nearly 600 experts.

Welcoming the adoption as a historic step, UN secretary-general António Guterres said: “We will no longer be heedlessly allowing environmental destruction and degradation to be considered economic progress.”

Described by Karin Kemper, global director, environment, natural resources and blue economy global practice at the World Bank as “a giant leap towards measuring nature’s contributions to the economy”, the new framework recognizes that ecosystems deliver important services that generate benefits for people and are assets that must be maintained.

Kemper cites an example from Cambodia, where the World Bank used ecosystem accounting to quantify the services offered by its forests – water, agriculture and hydropower, ecotourism and carbon storage – for the Pursat River Basin in the Cardamom Mountains.

“The analysis revealed that economic gains from preserving the forests was five times higher than cutting them down for charcoal production or agriculture,” she writes, continuing: “It also found that the benefits to other economic sectors derived from forest ecosystems are 20 times higher than the cost of maintaining them.”

Other examples cited by the UN include one in South Africa, where ecosystem extent and condition accounts for rivers have informed the National Water and Sanitation Master Plan.

The SEEA EA is built on five core accounts derived from the functions of ecosystem assets and the services they produce. The first measures the extent of the ecosystem over time, the second tracks its condition, the third and fourth are so-called “service flow accounts” (physical and monetary) that record supply and use by economic units such as households, businesses and governments, and the fifth, called the monetary ecosystem asset, holds information on stocks and changes in the stocks of ecosystem assets, including degradation and enhancement.

The system also supports something called “thematic accounting” organised around environmental themes such as climate change, biodiversity, oceans and wetlands.

The adoption of the SEEA EA comes just one month after publication of the Dasgupta Review commissioned by the UK Treasury. Its examination of “The Economics of Biodiversity” concludes that there is a need for a radical move away from economic thinking that measures progress in terms of GDP.