Natural Capital Accounts Policy Implications Presentation by Tshepo Setlhogile, Centre for Applied Research www.car.org.bw Natural Capital Accounting Stakeholder Workshop 24.05.18 Majestic Five Hotel, Palapye

Structure NCA objectives, SEEA framework and use for policy; NCA policy priorities for Botswana and examples from specific NCA; Conclusions & recommendations

UN SEEA as global standard for NCA Objectives Use Development of data sets Used as a tool towards informed policies: Development planning Resource planning Policy performance reviews (M&E of NDPs and Vision 2036; SDGs) International comparisons Show trend in resource availability; Measure the economic benefits per resource unit (efficiency); Show the supply costs, revenues and subsidies; Development of indicators to inform policy analysis.

Figure 1: The information pyramid Deriving policy information from NCA Figure 1: The information pyramid Information Information users Data Accounts Indicators Decision makers & wider public Managers and analysts Researchers Source: UNSD, 2014

NCA Policy priorities in Botswana Water Accounts:  Assess water scarcity/availability, uses and their efficiency. Mineral Accounts:  Determine country’s economic benefits of each mineral (‘rent’), lifetime of mineral stocks, support decisions regarding the investment of non-renewable mineral revenues. Energy Accounts:  Assess electricity scarcity and security (imports and domestic generation) and emissions associated with coal fired electricity generation. Macroeconomic indicators of sustainable development:  to assess the prospects for long-term, sustainable growth.

Examples of NCA indicators and policy implications

1. Water Figure 1: Policy indicators for water resource availability

Table 1: Policy indicators for water use efficiency: value added and employment creation per m3 Variable Sub variable Units 2010/11 2011/12 2012/13 2013/14 2014/15 Value added Value added all abstracted water BP constant 2006/m3 355.73 382.84 400.45 420.06 458.79   Value added all consumed water 408.87 435.98 437.26 483.44 516.79

2. Energy Figure 2: Electricity use and contributions to GDP by sector (2014/15)

Figure 3: Electricity consumption (% of total consumption, 2014/15)

Figure 4: Trend in domestic electricity generation, imports and consumption (2010/11-2014/15; MWh)

3. Minerals Resource rent: On average 19% of GDP over period 1994-2014 Varies enormously by mineral (Econsult, 2016); mostly from diamonds. Diamonds: P17.4 billion Copper-nickel: P 0.6 billion Coal: -P 0.6 billion Gold: P 0.0 billion Soda ash: P 0.5 billion

4. Macro economic indicators: savings Botswana does much better than many mineral rich countries (WB’s Changing Wealth of Nations 2018) Positive and high Adjusted Net National Savings (ANNS) (30-40% of net adjusted income (1995-2014; Econsult, 2016)

Macro economic indicators: assets Growth in assets 1994-2014 Change in asset composition: rise in produced cap. (as %) decline in mineral cap. (as %)

Conclusions and recommendations NCA are tools for better informed sustainable development planning and resource management; Policy priorities need to determine which accounts and which components need to be developed first (and next); Policy analysis and stakeholder outreach must follow the account construction; NCA should be used in modelling & evaluation of future development planning scenarios; Need for regular high level policy engagement to discuss NCA results and priorities for further development.

Contacts: Tshepo Setlhogile tsetlhogile@car.org.bw or info@car.org.bw