Overview of the System of Environmental-Economic Accounting (SEEA) Julian Chow United Nations Statistics Division

Natural Capital Accounting – balancing the book of natural capital Assets Services Waste & degradation Economy and well-being Regeneration

System of Environmental-Economic Accounting (SEEA) The SEEA Central Framework was adopted as an international statistical standard by the UN Statistical Commission in 2012 The SEEA Experimental Ecosystem Accounting complements the Central Framework and represents international efforts toward coherent ecosystem accounting

The SNA and SEEA: Systems of integrated information The SEEA has a number of different components. First there is the SEEA Central Framework which is an international statistical standard to measure the environment and its relationship to the economy. It is fully consistent with the SNA which is the standard to measure the economy, and is essentially a satellite account of the SNA o extend to the environmental dimension. The SEEA CF has various subsystems, which serve to provide more detailed guidance on accounting for specific environmental assets. Water is the most established, and energy is in the process of being finalized. FAO and UNSD have also developed a SEEA-AFF and is currently under global consultation. More will be developed in time. Other modules will be developed in due course depending on policy need. In addition, technical notes are being developed to provide more detailed guidance about accounting for specific topics. In addition, we have the SEEA EEA which is still in the experimental stage, and represents a synthesis of current knowledge on ecosystem accounting.

SEEA Environment Economy National wealth National Balance Sheet Resource life “Critical” Natural Capital Stocks (P & Q) Minerals & energy Land, Soil Timber Aquatic Other biological Water Ecosystems + conditions Environment Flows (P & Q) Materials Energy Water Ecosystem services Benefits/Costs SNA: Contribution of natural inputs to economy (rent) Depletion, degradation adjusted net savings Non-SNA: Contribution of natural inputs to well being Externalities (health, poverty) Economy Production Consumption Accumulation Imports Exports Mitigate & Manage (P) Protection $ Goods & Services Taxes & subsidies

One Environment: Two perspectives Individual environmental assets & resources: Timber Water Soil Fish Ecosystems: Biotic and abiotic elements functioning together: Forests Lakes Cropland Wetlands SEEA Central Framework (SEEA_CF) starts with economy and links to physical information on natural assets, flows and residuals SEEA Experimental Ecosystem Accounting (SEEA-EEA) starts with ecosystems and links their services to economic and other human activity Together, they provide the foundation for measuring the relationship between the environment, and economic and other human activity

SEEA SEEA-CF (Central Framework) Assets Physical flows Monetary flows Minerals & Energy, Land, Timber, Soil, Water, Aquatic, Other Biological Materials, Energy, Water, Emissions, Effluents, Wastes Protection expenditures, taxes & subsidies SEEA Water; SEEA Energy; SEEA Agriculture, Forestry and Fisheries Add sector detail As above for Water Energy Agricultural, Forestry and Fisheries SEEA-EEA (Experimental Ecosystem Accounting) Adds spatial detail and ecosystem perspective Extent, Condition, Ecosystem Services, Thematic: Carbon, Water, Biodiversity Different types of accounts Crucial !! Spatial underpinning of ecosystem accounts, that is what sets it apart from other approaches.

SEEA-CF – Asset accounts Assets (=stocks; physical and monetary) Opening balance; additions; removals. Closing balance Mineral and energy resources Land, Forest Soil Timber Aquatic resources Other biological resources Water Source: Statistics Canada

General structure of the physical account for environmental assets (physical units)   Mineral & energy resources Land (incl. forest land) Soil resources Timber resources Aquatic resources Water resources Cultivated Natural Opening stock of resources Yes Additions to stock of resources Growth in stock na Yes* Soil formation Growth Natural growth Precipitation Soil deposition Return flows Discoveries of new stock Upwards reappraisals Reclassifications Total additions to stock Reductions in stock of resources Extractions Soil extraction Removals Harvest Gross catch Abstraction Normal reductions in stock Erosion Natural losses Normal losses Evaporation Evapotranspiration Catastrophic losses Downwards reappraisals Total reductions in stock Closing stock of resources

SEEA-CF – Physical flow accounts Physical flows Supply/use of materials (extract  consume) Material flows (through economy) to final demand (e.g., GHGs) Water supply/use Energy supply/use Residuals Air emissions Water emissions Wastes (generated and used/recycled) Source: Statistics Denmark

SEEA-CF – Environmental activity accounts Environmental activities Expenditures on protection, management and regulation EPE: Environmental protection expenditures (demand side) EGSS: Environmental goods and services sector (supply side) Resource use and management Environmentally-related payments by & to government (fines, fees, taxes, subsidies, concession payments) EGSSs in Netherlands Source: Statistics Netherlands

Ecosystem Accounting model The SEEA EEA ecosystem accounting model has five main components that are reflected in diagram. Starting at the bottom, the model is based around accounting for an ecosystem asset (1) that is represented by a spatial area. The delineation of the area that defines an ecosystem asset is required for accounting purposes and should be considered a statistical representation of ecosystems, which by their nature are not discrete systems. Conceptually, ecosystem assets are represented by ecosystem units (EU). Each ecosystem asset has a range of relevant ecosystem characteristics and processes (2) that together describe the functioning of the ecosystem. The accounting model proposes that the stock and changes in stock of ecosystem assets is measured by considering the ecosystem asset’s extent and condition which can be done using indicators of the relevant ecosystem asset’s area, characteristics and processes. Each ecosystem asset generates a set or basket of ecosystem services (3) which, in turn, contribute to the production of benefits (4). Benefits may be goods or services (products) currently included in the economic production boundary of the SNA, referred to as SNA benefits; or they may be benefits received by individuals that are not produced by economic units (e.g. clean air). These are referred to as non-SNA benefits. Both SNA and non-SNA benefits contribute to individual and societal well-being (5). The chain of relationships from ecosystem assets to well-being is at the core of the SEEA EEA. While there remain some important issues of definition in terms of the boundaries between different components, and there are measurement challenges; the core model reflecting the relationships between ecosystem assets, ecosystem services, benefits and individual and societal well-being remains strong.

Broad steps in ecosystem accounting a. Physical Accounts Ecosystem thematic accounts: Land, Carbon, Water, Biodiversity Supporting information: Socio-economic conditions and activities, ecological production functions Tools: classifications, spatial units, scaling, aggregation, biophysical modelling Source: Official statistics, spatial data, remote sensing data b. Monetary Accounts The current slide describe the broad steps in ecosystem accounting. The use of Earth Observation data (remote sensing data) was highlighted to indicated that Big data is an important source data for the compilation of ecosystem accounts Supporting information: SNA accounts, I-O tables Tools: Valuation techniques

International bodies for SEEA United Nations Committee of Experts on Environmental Economic Accounting (UNCEEA) The governing body for the mainstreaming and implementation of the SEEA. Established by the UN Statistical Commission at its at its 36th Session in 2005. Chair: Bert Kroese, Statistics Netherlands || Secretariat: UNSD Technical Committee of the SEEA Central Framework Technical Committee of the SEEA Experimental Ecosystem Accounting London Group on Environmental Economic Accounting Forum of Experts on SEEA Experimental Ecosystem Accounting

Status of SEEA implementation Global Assessment on Environmental Economic Accounting 2014 84 countries responded 54 countries have an SEEA program Accounts most commonly compiled; Air Emissions, Material Flows, Energy (due to Eurostat legislation) Priorities accounts going forward; Developed Countries: Energy, EPEA and EGSS Developing Countries: Energy, Water and Environmental Taxes and Subsidies