Natural Capital Accounting Research Articles

How regulating and cultural services of ecosystems have changed over time in Italy

In this experimental study, different components are computed for three different ecosystem services (ES). Specifically, supply, demand and use are estimated for pollination service, flood risk regulation service and nature-based tourism. These are analysed and assessed in 2012 and 2018 for the Italian context, in order to estimate the evolution over this period and to allow a significant comparison of results. The same methodology and models are applied for the selected accounting years and accounting tables and tend to reflect as closely as possible the System of Environmental-Economic Accounting-Ecosystem Accounting (SEEA EA), which is the international standard endorsed by the United Nations to compile Natural Capital Accounting in 2021. Both biophysical and monetary assessments are performed using the ARIES technology, an integrated modelling platform providing automatic and flexible integration of data and models, via its semantic modelling nature. Models have been run adjusting the components of the global modelling approach to the Italian context and, whenever available, prioritising the use of local data to carry out the study. This approach is particularly useful to analyse trends over time, as potentially biased components of models and data are substantially mitigated when the same biases is constant over time. This study finds an increase in benefits over the period analysed for the ES examined. The main contribution of this pioneering work is to support the idea that ES accounting or Natural Capital Accounting can provide a very useful tool to improve economic and environmental information at national and regional level. This can support processes to provide the necessary incentives to steer policy-making towards preventative rather than corrective actions, which are usually much less effective and more costly, both at environmental and economic levels. Nevertheless, particular attention must be paid to the meaning of the estimates and the drivers of these values to derive a direct or indirect relationship between the benefits observable and the actual Italian ecosystems condition.

The Integrated system for Natural Capital Accounting (INCA) in Europe: twelve lessons learned from empirical ecosystem service accounting

The Integrated system for Natural Capital Accounting (INCA) was developed and supported by the European Commission to test and implement the System of integrated Environmental and Economic Accounting – Ecosystem Accounting (SEEA EA). Through the compilation of nine Ecosystem Services (ES) accounts, INCA can make available to any interested ecosystem accountant a number of lessons learned. Amongst the conceptual lessons learned, we can mention: (i) for accounting purposes, ES should be clustered according to the existence (or not) of a sustainability threshold; (ii) the assessment of ES flow results from the interaction of an ES potential and an ES demand; (iii) the ES demand can be spatially identified, but for an overarching environmental target, this is not possible; ES potential and ES demand could mis-match; (iv) because the demand remains unsatisfied; (v) because the ES is used above its sustainability threshold or (vi) because part of the potential flow is missed; (vii) there can be a cause-and-effect relationship between ecosystem condition and ES flow; (viii) ES accounts can complement the SEEA Central Framework accounts without overlapping or double counting. Amongst the methodological lessons learned, we can mention: (ix) already exiting ES assessments do not directly provide ES accounts, but will likely need some additional processing; (x) ES cannot be defined by default as intermediate; (xi) the ES remaining within ecosystems cannot be reported as final; (xii) the assessment and accounting of ES can be undertaken throughout a fast track approach or more demanding modelling procedures.

Progress on ecosystem accounting in Europe

Research on methods and applications on the integration of ecosystem services flow accounts into economic reporting systems has increased in the last decades. Along with Natural Capital Accounting (NCA), Ecosystem Accounting (EA) has been increasingly considered and has been integrated into research, policy and decision-making. Following the System of Environmental Economic Accounting – Ecosystem Accounting (SEEA-EA) distinction of core and thematic accounts, this study presents a short overview of the EA progress in European countries. Based on the review of scientific and grey literature, the ecosystem accounting progress from 29 European countries was identified (EU27 countries, the United Kingdom and Norway). Overall, the largest share (more than 50%) of finalized accounts at a national scale were recorded for the ecosystem extent accounts. Besides, the review revealed that for monetary ecosystem service accounts, the relatively largest proportion of accounts was developed only at the local scale. Generally, the accounting progress has been found to be distributed rather heterogeneously throughout the different countries. The most intensive ecosystem accounting progresses were identified for the United Kingdom and the Netherlands. The most frequently developed thematic account was the carbon account. Within this study, we only considered finalized ecosystem accounts. Nevertheless, in the process of the review, we came across a vast amount of further ongoing accounting initiatives. In combination with the growing relevance and increasing awareness of ecosystem accounting in policy- and decision-making in the countries and within supranational bodies like the UN and the EU, we expect a significant increase in completed ecosystem accounts in the foreseeable future.

From COVID-19 to Green Recovery with natural capital accounting

The COVID-19 pandemic and related social and economic emergencies induced massive public spending and increased global debt. Economic recovery is now an opportunity to rebuild natural capital alongside financial, physical, social and human capital, for long-term societal benefit. Yet, current decision-making is dominated by economic imperatives and information systems that do not consider society’s dependence on natural capital and the ecosystem services it provides. New international standards for natural capital accounting (NCA) are now available to integrate environmental information into government decision-making. By revealing the effects of policies that influence natural capital, NCA supports identification, implementation and monitoring of Green Recovery pathways, including where environment and economy are most positively interlinked.

Urban residents value multi-functional urban greenspaces

Urban greenspaces are multifunctional spaces, providing services to people and biodiversity. With space in urban areas being limited creation and maintenance of urban greenspaces relies on understanding the preferences of urban residents for their characteristics. Such preferences are expected to vary with current availability, and the availability of alternatives to greenspaces such as gardens or gyms. We carried out a nationwide discrete choice experiment with Scottish urban residents to estimate values associated with greenspace attributes of: recreational features; plants and natural features; trees; accessibility; time to walk from home and size, to test the hypotheses that: (i) people are willing to pay to maintain greenspace, (ii) people have willingness to pay for greenspaces with multiple functions, including features for direct use (e.g. play equipment) and biodiversity (e.g. wildflowers), (iii) willingness to pay for individual greenspace will vary according to socioeconomic characteristics and (iv) vary with the amount of greenspace or substitute facilities available. We find a positive willingness to pay to maintain greenspace in general, and higher willingness to pay for larger greenspaces closer to home, which are multifunctional and contain both direct use features (e.g. children’s play park) and biodiversity features. Although we find significant heterogeneity in willingness to pay for maintaining greenspace, this is not well explained by either socioeconomic characteristics or the availability of substitute facilities. Our results have relevance for urban natural capital accounting, and demonstrate to urban planners the importance of the design and maintenance of multi-functional greenspaces for urban populations and would benefit from future research that further explores heterogeneity, including perceptions of greenspace access and substitutes, and greenspace quality.

Подходы к измерению экосистемных услуг на территории лесопользования

Analysis of methodological techniques and examples of assessing ecosystem services as elements of natural capital has been the subject of the research. Identification of acceptable approaches for assessing key ecosystem services for the Komi Republic forest management area has been the purpose of the study. The forest sector is extremely important for the economic well-being of the region. In this regard, indicators of key services of forest ecosystems are considered and determined – biodiversity conservation, water protection and water regulation functions, and carbon dioxide absorption capacity. Two approaches are proposed for the measuring: regional (by forestry and districts) and corporate (by small river basins). The regional approach uses information from the Red Book of Russia and the Komi Republic, statistics, information on the forest management of forestries and the state of the environment in the region. The corporate one is based on more detailed indicators: the area of forests of high environmental value and key biotopes; quality characteristics of forests of small river basins on a rental area. The natural capital accounting should be the basis for the effective use of natural assets and for responsible and sustainable forest management.

Древесные ресурсы региона в системе учета природного капитала

Forest resources of the Komi Republic play a basic role in the economy of the region, however, excessive felling in the traditional "forest" areas of the republic in recent decades, as well as an inefficient reforestation system, have led to significant degradation of forest ecosystems, in which the proportion of high-quality wood has significantly decreased, primarily sawmill and plywood raw materials. The relevance of the topic lies in the fact that traditional domestic approaches to assessing the natural capital of forests are not able to adequately indicate the structural state of forests and the degree of degradation of forest ecosystems. In this article, the system of natural capital accounting is considered in terms of accounting features of wood resources for the territory of a forest-sufficient region. Methodological schemes of wood resources accounting are analyzed on the example of some countries and enterprises for which the spatial aspect is important. The possibilities and limitations of using foreign approaches for testing in practice of the Komi Republic are revealed. A scheme for assessing the wood resources of the region is proposed, the choice of parameters and indicators for such an assessment is substantiated, considering the existing domestic information base.

Under the influence of nature: The contribution of natural capital to tourism spend.

Tourism and outdoor leisure is an important economic sector for many countries, and has a substantial reliance on natural capital. Natural capital may be the primary purpose for tourism, or it may be a secondary factor, where the choice of location for a leisure activity is influenced by natural capital. Typically, when valuing tourism and outdoor leisure, all expenditure associated with the activity is assigned to the ecosystem it occurs in. However, this value illustrates the dependency on natural capital, rather than the contribution of natural capital. In natural capital accounting, a major challenge is to separately identify the contribution of natural capital from that of other forms of capital. In this study we develop a transparent and repeatable method that is able to attribute the contribution of natural capital (here defined as ecosystems) to the output of multiple tourism and outdoor leisure activities. Using national statistics from Great Britain, we calculate the natural capital contribution to tourism spend by activity at a national and regional scale, and for a case study map and value the contributing ecosystems. We estimated that, out of a total £36 billion spent on tourism and leisure activities in 2017, £22.5 billion was attributable to natural capital. This equates to 0.9% of the UK GDP. The Gross Value Added component of this attributable was £10.5 billion, equivalent to 0.4% of the UK GDP. Regions with the highest natural capital contribution in Great Britain were Scotland and Wales, with the lowest being Greater London and the West Midlands in England. For the case study, the ecosystems with the greatest contribution to terrestrial activities were marine and enclosed farmland. These methods can be applied worldwide for anywhere with aggregate economic statistics on expenditure associated with tourism and outdoor leisure, with the aid of open source GIS datasets.

Improving acceptance of natural capital accounting in land use decision making: Barriers and opportunities

Environmental issues are becoming more urgent. Biodiversity loss, climate change, extreme events and global pressures on resources place increasing importance on decision making about how natural resources should be managed. Natural capital accounting (NCA) is gaining popularity as a systematic approach to recognise the full value of natural resources such as soil, vegetation, animals, water, and biodiversity. To understand perceptions and opportunities for awareness and behaviour change relating to the use of NCA, we conducted a discourse analysis of 57 interviews with stakeholders across Australia. Our aim is to promote discussion and reflection about perceptions of natural resources as forms of capital, and the role of NCA to underpin management practice change and support sustainability. We identify four key areas of contestation that relate to values, complexity, digital technology, and the desired future vision of NCA in society. Findings include conflicting views around whether NCA should have a diversity of tailored approaches or a consistent approach for all and that digital technology has and will continue to shape the way NCA is conducted. To our knowledge, this is the first paper to take a discourse analysis approach to perceptions of natural capital accounting.

Restoration as world-making and repair: A pragmatist agenda

The UN’s Decade of Ecosystem Restoration commenced in June 2021, with the expectation that ecological restoration will be vastly scaled-up internationally. Millions of hectares of the earth’s surface is projected to be restored, from forests and peatland to rivers, reefs and grasslands. This will transform restoration from a predominantly localized, community-driven field to a highly capitalized, professional activity. As the renowned biologist E. O. Wilson proposed, the twenty-first century certainly does look likely to be characterized by restoration. And yet, thus far, the still emerging field of ecological restoration has been dominated by the natural sciences, in both theory and practice, neglecting broader questions of how to live in and with restored landscapes. This paper contends that if restoration is to be significantly expanded over the next decade, the social sciences and humanities must be involved to ensure its purpose is given adequate scrutiny, by engaging wider publics of interest in scheme planning, design and implementation. This is crucial given the dominance of natural capital accounting in restoration, which privileges economic reasoning over alternative, more radical forms. Pragmatism, which has a substantive philosophical interest in the relationship between humans and their environment, can offer a distinctive orientation to inquiry conducive to collaboration between the natural and social disciplines. Focusing on waterway restoration in the United Kingdom, and drawing on social and natural science literature, this paper outlines a pragmatist research agenda that recognizes multiplicity in nature, advocates experimentation in human-environment relations, and foregrounds community in democratic renewal. The paper considers not only ways that pragmatism can inform restoration but how restoration can advance a pragmatist agenda for invigorating public life. This encourages scholars to think with not only against restoration, attending to composition as well as critique, as part of a political urban ecology.

Climate Impacts on Natural Capital: Consequences for the Social Cost of Carbon

The effects of climate change on natural systems will be substantial, widespread, and likely irreversible. Warmer temperatures and changing precipitation patterns have already contributed to forest dieback and pushed some species toward extinction. Natural systems contribute to human welfare both as an input to the production of consumption goods and through the provision of nonuse values (i.e., existence and bequest values). But because they are often unpriced, it can be difficult to constrain these benefits. Understanding how climate change effects on the natural capital stock affect human well-being, and therefore the social cost of carbon (SCC), requires understanding not just the biophysical effects of climate change but also the particular role they play in supporting human welfare. This article reviews a range of topics from natural capital accounting through climate change economics important for quantifying the ecological costs of climate change and integrating these costs into SCC calculations.

Ecosystem condition underpins the generation of ecosystem services: an accounting perspective

There is a linkage between the condition of ecosystems and the services they provide. In the accounting framework set by the United Nations System of integrated Environmental Economic Accounting – Ecosystem Accounts (SEEA EA), two different sets of accounts assess and monitor ecosystem condition and ecosystem services, respectively. The former are reported as indicators in an asset account format, while the latter are reported as supply and use tables. Without a concrete linkage, the two sets of accounts run in parallel: only an ex-post correlation analysis could confirm (or not) a common path. On the other hand, a clear linkage could create a sequence that justifies and supports the statement that any change in ecosystem condition will affect services and, in turn, the benefits provided to economy and society. Concrete applications undertaken under the project “Integrated system for Natural Capital Accounts” demonstrate at which stage a direct connection can occur between ecosystem condition and ecosystem services accounting. The paper starts with a theoretical background meant to set the basic concepts underlying the transition from condition to services. Next, the accounting framework for condition accounts is briefly presented: the specific ecosystem services case studies concern flood control and crop pollination. In the discussion, a simple proposal is drafted to facilitate a possible procedure for those practitioners interested in having condition and ES accounts operationally linked.

A natural capital accounting framework to communicate the environmental credentials of individual wool-producing businesses

PurposeThis paper aims to demonstrate methods that sustainability-conscious brands can use to include their primary producers in the measurement and reporting of the environment and sustainability performance of their supply chains. It explores three questions: How can farm businesses provide information required in sustainability reporting? What are the challenges and opportunities experienced in preparing and presenting the information? What future research and policy instruments might be needed to resolve these issues.Design/methodology/approachThis study identifies and describes methods to provide the farm-level information needed for environmental performance and sustainability reporting frameworks. It demonstrates them by compiling natural capital accounts and environmental performance information for two wool producers in the grassy woodland biome of Eastern Australia; the contrasting history and management of these producers would be expected to result in different environmental performances.FindingsThe authors demonstrated an approach to NC accounting that is suitable for including primary producers in environmental performance reporting of supply chains and that can communicate whether individual producers are sustaining, improving or degrading their NC. Measurements suitable for informing farm management and for the estimation of supply chain performance can simultaneously produce information useful for aggregation to regional and national assessments.Practical implicationsThe methods used should assist sustainability-conscious supply chains to more accurately assess the environmental performance of their primary producers and to use these assessments in selective sourcing strategies to improve supply chain performance. Empirical measures of environmental performance and natural capital have the potential to enable evaluation of the effectiveness of sustainability accounting frameworks in inducing businesses to reduce their environmental impacts and improve the condition of the natural capital they depend on.Social implicationsTwo significant social implications exist for the inclusion of primary producers in the sustainability and environmental performance reporting of supply chains. Firstly, it presently takes considerable time and expense for producers to prepare this information. Governments and members of the supply chain should acknowledge the value of this information to their organisations and consider sharing some of the cost of its preparation with primary producers. Secondly, the “additionality” requirement commonly present in existing frameworks may perversely exclude already high-performing producers from being recognised. The methods proposed in this paper provide a way to resolve this.Originality/valueTo the best of the authors’ knowledge, this research is the first to describe detailed methods of collecting data for natural capital accounting and environmental performance reporting for individual farms and the first to compile the information and present it in a manner coherent with the Kering EP&L and the UN SEEA EA. The authors believe that this will make a significant contribution to the development of fair and standardised ways of measuring individual farm performance and the performance of food, beverage and apparel supply chains.

Meeting decision support requirements through natural capital accounts: a case study in England’s National Nature Reserves

ABSTRACT Natural Capital Accounts extend traditional balance sheets to include valuation of non-market environmental benefits and asset values. They aim to bring the often-overlooked value of nature into decision-making, thus providing an effective decision-support tool. We compare Natural Capital Accounts to UK decision-support guidance, which leads us to three innovations that we apply to a case study of the National Nature Reserves in England. First, we use a reporting format, which explicitly reports gaps in quantification and valuation. Second, we provide ‘traffic-light’, confidence level information for our value results. Third, we report on the ecological state of assets and incorporate this evidence into the headline results. These innovations address common weaknesses whereby partial monetary values may mislead decision-makers and confidence levels are highly variable, yet often ignored. Information on the ecological state of assets is often only partial, non-systematic and not presented with the summary results. Producing this account required ecological and economic evidence to be treated as equally important. These three innovations produce an account that is transparent and provides a useful snapshot of the condition of natural capital assets.

Applying ecosystem accounting to develop a risk register for peatlands and inform restoration targets at catchment scale: a case study from the European region

Combining natural capital accounting tools and ecosystem restoration approaches builds on existing frameworks to track changes in ecosystem stocks and flows of services and benefits as a result of restoration. This approach highlights policy‐relevant benefits that arise due to restoration efforts and helps to maximize opportunities for return on investment. Aligning the System of Environmental Economic Accounting–Ecosystem Accounting (SEEA EA) framework with risk assessment tools, we developed a risk register for peatlands in two contrasting catchments in Ireland, based on available information relating to peatland stocks (extent and condition) and flows (services and benefits), as well as knowledge of pressures. This approach allowed for identification of areas to target peatland restoration, by highlighting the potential to reduce and reverse negative trends in relation to provisioning, regulating, and cultural services, flows relating to non‐use values, as well as abiotic flows. We also highlighted ways to reduce and reverse the effects of historical and ongoing pressures through restoration measures, aligning our approach with that outlined in the SER International Principles and Standards for the Practice of Ecological Restoration. Building on the synergies between the SEEA EA and the SER Standards is highlighted as a means to develop transdisciplinary collaboration, to assist in setting and achieving targets set out under the UN Decade on Ecosystem Restoration as well as integrating regional policy targets set under the EU Biodiversity Strategy for 2030, and the related EU Habitats and EU Water Framework Directives.

Shelterbelt species composition and age determine structure: Consequences for ecosystem services

Shelterbelts are a popular form of agroforestry, providing a wide range of ecosystem services (e.g. wind speed reduction and wood production) which deliver farm-scale benefits. Variation in species composition and planting density drives structural differences in shelterbelts which directly influence the provision of ecosystem services and consequently the range of benefits received by farmers. Although specific structural characteristics of shelterbelts that determine provision of these services have been identified, little is known about how these characteristics vary with shelterbelt species composition and age, and how such variation may affect provision of a range of key services and benefits. This study explores the effects of shelterbelt composition and age on structural characteristics that determine ecosystem service provision. Structural characteristics (including vegetation height and porosity) were measured and compared across shelterbelts with three common species compositions (Eucalyptus nitens, Pinus radiata, mixed native) and three age classes (2–5 years, 6–14 years, 15–30 years) in the Midlands region of Tasmania, Australia. Species composition and age were key determinants of structural characteristics. For example, height, carbon sequestration, and stand basal area increased and porosity decreased with shelterbelt age, with rates of increase/decrease varying significantly between species compositions. We outlined how these structural characteristics affect provision of ecosystem services and showed that fine scale benefits are likely to be highly dependent on the species composition of the shelterbelt. These findings can assist agroforestry practitioners in designing shelterbelts that maximise benefits to their enterprise. There is value in expanding the approach used in this study to develop decision-making tools for practitioners, and to facilitate more meaningful application of natural capital accounting to agroforestry at the farm scale.

English

This paper discusses how rosewood as a common-pool resource is managed and utilized at the local community level in the wake of aggravated exploitation of the resource for export to feed external markets. Non-probability sampling technique coupled with focus group discussion was used to collect primary data from two administrative districts in the transitional zone between the savannah and high forest in Ghana. In all, researchers interacted with 96 respondents in a survey and 77 participants in focus group discussions in 6 communities. The results indicate that the governance structure and management strategy for the sustainable use of rosewood and other forest commons are ineffective in the studied communities. Illegal rosewood harvesting thrived due to weak institutional structures, poor community knowledge of the value of rosewood logs in the international market and poor public knowledge about a ban on the harvesting and export of rosewood. Sustainable management and utilization of rosewood and other forest commons on village lands (lands outsider protected areas) could be improved if local communities are empowered and given technical support to manage forest resources on their lands. The conduct of natural capital accounting in forest resources and communicating the result to local communities could help residents appreciate the true value of forest resources and probably aspire for a greater quota of benefits. With a better understanding of the value of a forest, residents may be motivated to protect it from unsustainable use.   Key words: Institutional structures, natural resource use, sustainable management, illegal logging.

Prospects for Valuation in Marine Decision Making in Europe

There is now high-level recognition that the UN Sustainable Development Goals can only be achieved if the decline of ecosystems and biodiversity can be halted and reversed. This will require effective control of ongoing pressures, meaningful protection and enforcement of protected areas, and significant investments in ecosystem restoration. This paper explores the possible use of economic valuation and appraisal in achieving these goals in marine systems and discusses the European marine policy instruments where they should have an important role The paper first briefly reviews the tools of economic valuation and appraisal for marine ecosystem management. A critique of the use of economic valuation and appraisal in marine conservation and restoration is then presented. The paper argues that while progress has been made there remains a pressing need for better integration of marine environmental values in policy processes. It also highlights the fact that the focus on natural capital accounting, and more generally on green/blue growth and market instruments, could create a reliance on exchange values at the expense of welfare values required for policy appraisal.

Assessing impacts to biodiversity and ecosystems: understanding and exploiting synergies between Life Cycle Assessment and Natural Capital Accounting

All economic activity depends on natural capital, i.e., the stock of both renewable and non-renewable resources (including biodiversity) providing a flow of ecosystem services (ES) to society. However, as also highlighted in the European Green Deal and follow-up policy initiatives of the European Commission, unsustainable practices of production and consumption of human beings have put nature in crisis, which has negative effects on different aspects of human wellbeing as retro-feedback. The need for action is urgent, and this calls for the availability of appropriate methods and tools that can be used to assess and guide the mitigation and reversion of the impacts of human activities on biodiversity and ES. In this context, we describe a conceptual framework that aims to show how Life Cycle Assessments (LCA) and Natural Capital Accounting (NCA) can be integrated and used for a more comprehensive understanding of the biodiversity and ES quality footprint, i.e., pressures and impacts, associated with product value chains, organizations and territories. First, an in-depth and separate description of LCA and NCA is provided, including ongoing progress, complexities, and challenges of each field. Second, integration options are presented that could be followed and further developed to link LCA and NCA, thus helping to overcome the shortages of the two fields and providing a more holistic and interdisciplinary approach to address the current environmental crisis.

Ecosystem natural capital accounting: The landscape approach at a territorial watershed scale

Most approaches to estimate ecological value use monetary valuation. Here, we propose a different framework accounting ecological value in biophysical terms. More specifically, we are implementing the ecosystem natural capital accounting framework as an operational adaptation and extension of the UN System of Economic and Environmental Accounting/Ecosystem Accounting. The proof-of-concept study was carried out at the Rhône river watershed scale (France). Four core accounts evaluate land use, water and river condition, bio-carbon content of various stocks of biomass and its uses, and the state of ecosystem infrastructure. Integration of the various indicators allows measuring ecosystems overall capability and their degradation. The 12-year results are based on spatial-temporal geographic information and local statistics. Increasing levels of intensity of use are registered over time, that is, the extraction of resources surpasses renewal. We find that agriculture and land artificialisation are the main drivers of natural capital degradation.