A South African national economic and environmental policyframework1

Gross domestic product (GDP) does not account for depreciation of natural capital stock as a result of economic exploitation and environmental degradation. In other words, GDP may increase even when the stock of natural capital, such as minerals, soils and forests, is being depleted. Depletion of natural and human capital is excluded from total national wealth of a nation, and hence, the measures of economic performance are wrong and misleading. Natural resources such as water, soil, air, forest and woodland, minerals are very important to mankind and needed to be explicitly considered both at the macro and micro planning levels. Therefore, the inclusion of the natural environment in national accounts is important as it provides information on the use of natural resources in economic activities. The traditional system of national accounts (SNA) has a number of well-known shortcomings regarding the treatment of the environment. Mining generates income, (which is included in the national accounts and economic indicators like gross domestic product (GDP)), but at the same time, the process of mining depletes national wealth by using up the limited supply of mineral assets. To correct this omission, the 1993 System of National Accounts (SNA) (United Nations 1993), proposed inclusion of minerals as a set of satellite accounts to the SNA in order to provide a more accurate picture of extent to which an economy relies on minerals. Based on the significant contribution of minerals to the development of a developing nation, this paper presents a basic overview of the mining sector in the Indian economy and its accounting prospect to ensure sustainable development in India. To enable proper accounting of mineral wealth in India, we have developed physical accounts for five minerals (bauxite, gold, iron ore, limestone, lead and zinc) in the format suggested by SEEA, 2003. The paper also points towards the direction of developing a concrete methodology for the construction of monetary accounts for minerals in India and rectifying the problem of data lags.

There is a new line of thinking in development and growth theory demonstrating that sustainable development requires non-declining per capita wealth (Hamilton K, Clemmens M. World Bank Econ Rev 13(2):336–356, 1999; Lange G-M. Environ Res Econ 29:257–283, 2004; Lange G-M. Introducing environmental sustainability into the Uganda system of national accounts. Draft Final Report, ENR Sector Working Group, 2005; World Bank. The International Bank for Reconstruction and Development. The World Bank, Washington, DC, 2006). In this conceptualization, wealth is defined in a very broad sense to include produced, natural and human (including social) capital. The challenge posed by this approach to growth and development is for economies to manage their asset portfolios so as to realize the objectives of sustainability (non-declining per capita wealth). This requires economies to have the ability to monitor total per capita wealth and analyse changes in this indicator (e.g. see Lange G-M. Environ Res Econ 29:257–283, 2004). It is well known that the current System of National Accounts (SNA) does not adequately represent natural (and human) capital stocks, and the consequences of this omission (neglect) have been well documented (e.g. see Hamilton K, Clemmens M. World Bank Econ Rev 13(2):336–356, 1999; Lange G-M. Environ Res Econ 29:257–283, 2004; Lange G-M. Introducing environmental sustainability into the Uganda system of national accounts. Draft Final Report, ENR Sector Working Group, 2005; World Bank. The International Bank for Reconstruction and Development. The World Bank, Washington, DC, 2006). However, there presently exists a standardized framework (and methodologies) for constructing environmental accounts, called the System of Integrated Environmental and Economic Accounts, or SEEA (United Nations, Commission of the European Communities, International Monetary Fund, Organisation for Economic Cooperation and Development, and World Bank (2003) Handbook for integrated environmental and economic accounting. United Nations, New York), which extends the asset boundary of the SNA to include all natural resources, recording asset values, depletion and improvements in the stock of natural capital (Lange G-M. Environ Res Econ 29:257–283, 2004). The results from implementing the SEEA could potentially be used to better represent natural assets in the SNA.

Mirrors of the Economy: National Accounts and International Norms in Russia and Beyond. By Yoshiko M. Herrera Ithaca, NY: Cornell University Press, 2010. 252 pp., $49.95 hardcover (ISBN 978-08014-4585-9). The collapse of the Soviet Union also saw the end of the particularly Soviet method of national economic accounting. The USSR did not account for its national economic development through the system of national accounts (SNA), the procedure for generating statistical pictures of national economic wealth and development standard in advanced liberal capitalist economies that we take for granted as the means of measuring economic activity. The USSR used the material product system (MPS) and its satellite states followed suit. MPS covered a different range of economic activity to SNA, divided the economy up into different sectors, and had a different headline statistics: where SNA calculates gross domestic product and its components, MPS was concerned with “net material product,” roughly the volume of what was produced, and the balances between economic sectors. The differences between the two systems of national accounting meant that moving from MPS to SNA after the end of communism was a major change both in how statistics were gathered, the use that they could be put to, and the operation and political importance of Goskomstat, the state statistical agency. Such deep-seated and far-reaching change is …

Gross domestic product (GDP) is the most important and the most common measure of production and its changes, estimated in the national accounts. Since the second half of the 20th century, the UN in cooperation with other international economic organizations has been working on new versions of rules for GDP estimation, known as the System of National Accounts (SNA) and its European version, the European System of National and Regional Accounts (ESA). The GDP concept has been criticised by economists, politicians and journalists mainly due to their disappointment that GDP does not measure social progress. This article aims at presenting issues and conventional solutions concerning GDP, which are the subject of criticism, as well as demands for changes in the methodology of computing this measure. This paper concludes that it is not possible to build a single indicator for measuring both economic growth and social development. The barrier to constructing a measure of social progress with features similar to GDP is the requirement for evaluative assumptions which are beyond the GDP concept. It was found that a separate system of indicators should be developed for statistical measurement of social aspects of development.

<abstract> <p>ISWGN (Inter-Secretariat Working Group on National Accounts) is revising 2008 SNA and is expected to publish the latest version of SNA in 2025. In this context, this paper observes SNA (System of National Accounts) from a new perspective of global public goods and further understands the public goods attributes of national accounts. The global public good is developed from the theory of public goods. According to its definition, classification, and supply rule, SNA is considered a global public good in essence. In terms of characteristics, SNA belongs to means-oriented and best shot supply-oriented global public goods. It has network effect and belongs to network global public goods. And it is also global institutional knowledge, belonging to knowledge-based global public goods. Although SNA serves as a global standard of national accounts, it is not mandatory for consumption. As a global public good, SNA can enhance a country's statistical ability, avoid and reduce the cost of developing the system of national accounts, and reduce transaction costs. At the same time, SNA has the problem of underprovision and underuse, which requires global cooperation in the revision process of SNA. The evolution of SNA demand determines the evolution of SNA supply. Therefore, even if SNA is a global public good, it does not mean that countries should copy SNA, but need to "localize" SNA and transform it from a global public good to a national or regional public good.</p> </abstract>

The paper builds on the Supply and Use Tables module within the System of integrated Environmental and Economic Accounts - Experimental Ecosystem Accounts (SEEA EEA) developed by the UN. We explore the evolution of Supply and Use Tables from the System of National Accounts (SNA) to the System of integrated Environmental and Economic Accounts - Central Framework (SEEA CF) and then to the SEEA EEA, and we propose a further extension: we propose that ecosystem types should be treated as accounting units able to produce, consume and exhibit changes in regeneration and absorption rates. The implications are first explained in the methodological section and then shown in the application where the water purification service is tested against two major policy issues: sustainability assessment (we show how to assess whether the ecosystem service is used sustainably by comparing the quantification of potential and actual flow) and causality nexus (we quantify the connection between the value of agricultural production and that of the ecosystem service used). The paper highlights how the overall outcomes change when considering different scales. A contrast emerges, for example, between the positive balance at the continental scale, where water purification services appear to be used sustainably (thanks to the high potential flow of Northern European countries) and the negative balance of almost all European countries when considered at a national scale. Taking advantage of the experimental opportunities offered by operating with external satellite accounts, we are able to show how the proposed complementary tables could support policy action.

INTRODUCTION TO SPECIAL SECTION ON INTANGIBLE CAPITAL

The questions related to cash flows deserve greater attention than the one devoted on this subject nowadays. The reasons for such a conclusion are at least two circumstances. On the one hand this is their complexity, but on the other - the fact that they are an integral part of any micro- and macro-economic activity. Studies show that these questions have long engaged for both theoreticians and practitioners. Today they are again relevant. The need for their resolution is even higher in today’s turbulent economic development. For this purpose, however, it is necessary to find a reliable tool for the presentation of cash flows. Expectations that this is possible by the information contained in more widely used national accounts (Generalised System of National Accounts - SNA 2008 and the European System of National Accounts - ESA 2010) found no practical application. This is due to the fact that there is not reliable definition nor reliable coverage of cash flows. It is obvious that in this situation there is a need to create another satellite account to the national accounts to cover this gap. This is the main objective of the proposed material. In its first part issues about the definition and presentation of cash flows in the national accounts are discussed. The second part is dedicated to the opportunities to establish new satellite account to the national accounts for cash flows. The content of the third part is about ideas how to use the new satellite account.

In the process of active globalization, an important task of the economic agenda of any country is to ensure mutual comparability of statistical indicators. This can be achieved through the implementation of internationally approved methodologies and modern standards. The System of National Accounts is at the top of the economic pyramid. The implementation of SNA 2008 was envisaged by the Association Agreement with the European Union. In 2008, the United Nations, European Commission, International Monetary Fund, World Bank and the Organization for Economic Co-operation and Development jointly released The System of National Accounts, 2008 (2008 SNA). This update better reflects the changing economic landscape and the advances in methodological research, data sources and compilation methods and provides clarification on a number of issues not clearly stated in the 1993 SNA. Timely, relevant and comprehensive national account information is a significant intellectual asset for any country, and serves important functions. Like any asset the national accounts depreciate with time. Therefore, periodic new investments are crucial, to ensure that they continue to provide high quality services to their users. Implementing 2008 SNA improved the relevance of a country’s national accounts information. In the new version of SNA, changes were introduced in various directions: updates in calculation methods, improvement of data sources, introduction of an international approach to the coverage of the economy and other methodological changes, which include the introduction of new classifications, the use of the accrual method for taxes, a change in the base period (instead of 2010, the base period 2015 is used instead of the period) and many others. Updated calculation methods were introduced in the following direction: Changes in the Financial Intermediation Services Indirectly Measured (FISIM); Improving the calculation of Imputed Rent of Own Occupied Dwellings; Capitalization of costs related to Research and Development (R&D) and others. The factor of improving the data source should also be emphasized. In this regard, it is worth noting: updating the structure of intermediate consumption on the basis of a special surveys; Special survey conducted in various sectors of economy, such as agriculture, construction, hotels and restaurants and ect. Other methodological changes include also the use of new classifications, change of the base year (2015 instead of 2010). During the implementation of new standards and methodologies, many countries face a number of challenges. In many ways, national accounts data represent an important part of a country's economic history. Of course, it is more acceptable for users to have a continuous and consistent time series, which simplifies its use in economic modeling. However, as already mentioned, this process is associated with certain difficulties, among which access to historical rows of updated data sources is noteworthy. In such cases, they need to develop models that put new concepts and methodologies into historical perspective. In order to harmonize with the indicators of the previous period, Georgia has recalculated the historical data series since 2010. The introduction of the new methodology and the above-mentioned updates caused changes in the total volume of GDP. During the implementation of new methodologies and standards, and therefore the recalculation of historical dynamic series, another important challenge is to inform users about all changes and how each change affected the main macroeconomic indicators. At the same time, users should understand that the change of methodologies and their implementation in practice is an ongoing process by which the country strives to comply with international standards. This is vitally necessary to ensure continuity of the country's integration into the world economic system and future sustainable development. Keywords: The System of National Accounts 2008, Financial Intermediate Service Indirectly Measured (FISIM), Non-observed economy, Research and Development (R&D).

Green accounting and economic policy

1. The origins of the System of National Accounts (SNA) trace back to the 1947 Report of the Sub-Committee on National Income Statistics of the League of Nations Committee of Statistical Experts under the leadership of Richard Stone1. At its first session in 1947, the United Nations Statistical Commission emphasized the need for international statistical standards for the compilation and updating of comparable statistics in support of a large array of policy needs. Specifically, the Commission recommended that the United Nations Statistical Office, in consultation with the interested specialized agencies, should work on guidelines for national accounts statistics (national income and expenditure), taking into consideration best practices and international comparability2. In view of the emphasis on international statistical standards, the first national accounts standard was produced and published in 1953. The SNA was subsequently revised and updated in 1960, 1964, 1968 and 1993. In 2003 the Statistical Commission called for an update of the 1993 SNA. The System of National Accounts 20083, (in short the 2008 SNA) was finalized in 2009. This chapter describes the concepts and definitions of the SNA as recommended by the 1993 SNA.

1. The origins of the System of National Accounts (SNA) trace back to the 1947 Report of the Sub-Committee on National Income Statistics of the League of Nations Committee of Statistical Experts under the leadership of Richard Stone. At its first session in 1947, the United Nations Statistical Commission emphasized the need for international statistical standards for the compilation and updating of comparable statistics in support of a large array of policy needs. Specifically, the Commission recommended that the United Nations Statistical Office, in consultation with the interested specialized agencies, should work on guidelines for national accounts statistics (national income and expenditure), taking into consideration best practices and international comparability. In view of the emphasis on international statistical standards, the first national accounts standard was produced and published in 1953. The SNA was subsequently revised and updated in 1960, 1964, 1968 and 1993. In 2003 the Statistical Commission called for an update of the 1993 SNA. The System of National Accounts 2008, (in short the 2008 SNA) was finalized in 2009. This chapter describes the concepts and definitions of the SNA as recommended by the 1993 SNA.

Methodological links between the Material Product System (MPS) and the System of National Accounts (SNA) facilitate international comparisons of national product and main economic aggregates. Conceptual frames for the linkage of the two national accounting systems have been prepared by the United Nations Statistical Office. These conceptual frames are being tested and further specified in a number of case studies. One of these studies was recently concluded between the Central Statistical Offices of Bulgaria and Finland. The type of problems arising in the linkage between SNA and MPS partly depends on the direction in which the related conversions are carried out. In moving from MPS to SNA, the main problems are encountered in the estimation of the production (and its subsequent consumption) from non-material industries. The main problem of SNA to MPS conversions resides in the separation of the material and non-material spheres.

This article extends the earlier work on capitalisation of R&D in response to the proposals in the new System of National Accounts (SNA). Major improvements include: R&D deflators, depreciation rate for non-market R&D, rate of return, and estimates of R&D capital stocks. In addition, the article highlights areas for future improvements and presents preliminary estimates for the impact of capitalisation on the UK National Accounts. R&D capitalisation raises the level of UK GDP by approximately 1.6 per cent and gross capital formation by about 9 per cent. These changes are due to capitalisation of R&D rather than an actual improvement to GDP growth, which is estimated to be minimal. These figures are preliminary, based on experimental methods, and should therefore be interpreted with caution. The authors welcome comments and complementary evidence that can be used to substantiate or revise the assumptions made throughout this article.

How did Gross domestic product (GDP) become the world's most influential indicator? Why does it still remain the primary measure of societal progress despite being widely criticised for not considering well-being or sustainability? Why have the many beyond-GDP alternatives not managed to effectively challenge GDP's dominance? The success of GDP and the failure of beyond-GDP lies in their underlying communities. The macro-economic community emerged in the aftermath of the Great Depression and WWII. This community formalised their 'language' in the System of National Accounts (SNA) which provided the global terminology with which to communicate. On the other hand, beyond-GDP is a heterogeneous community which speaks in many dialects, accents and languages. Unless this changes, the 'beyond-GDP cottage industry' will never beat the 'GDP-multinational'. This book proposes a new roadmap to 2030, detailing how to create a multidisciplinary Wellbeing and Sustainability Science (WSS) with a common language, the System of Global and National Accounts (SGNA).