1. Green GDP – Accounting for Ecosystem Services Mark Eigenraam, Jessica Bowman, Joey Chua 19 July 2013, Prepared for Eco-Forum Global Guiyang, China, 2013 Dialogue on Forestry in the context of Economic-Civilisation 1

2. A brief history… 2 Vegetation policy - “Net Gain” 20022013 2007 20052012 Native Vegetation Credit Register BushBroker OFFSETS BushTender INVESTMENT http://www.dse.vic.gov.au/land-management/victorias-native-vegetation-management-a-framework-for-action

3. A brief history… 3 Vegetation type, extent and condition mapping 20022013 2007 20052010 http://mapshare2.dse.vic.gov.au/MapShare2EXT/imf.jsp?site=bim

4. A brief history… 4 ecoMarkets Payments for multiple ecosystem services EnSym Environmental modelling 20022013 2007 20052012 https://ensym.dse.vic.gov.au/cms/

5. More recently… 5 Victorian Environmental Partnerships 20022013 2007 20052012 http://www.depi.vic.gov.au/environment-and-wildlife/environmental-partnerships

6. 6 Offset reform 20022013 2007 20052012 http://www.depi.vic.gov.au/environment-and-wildlife/biodiversity/native-vegetation

7. 7 Victorian Experimental- Ecosystem Accounts “establish internationally recognisable environmental accounts that improve the way we allocate resources” (Environmental Partnerships: Priority 8, 2012) 20022013 2007 20052012 https://ensym.dse.vic.gov.au/cms/index.php?option=com_content&view=article&id=60&Itemid=71

8. Current context What does it mean for business, government and the economy? –New ways to connect the economy with the environment! –Environmental markets – opportunities for investment –Environmental accounts – opportunities to understand ecosystem services natural capital provides and invest for the future 8

9. National Statistics Environment Economy System of Environmental-Economic Accounts (SEEA) SNA Society

10. ASSET SEEA Central Framework (CF) 1. 2. 3. http://unstats.un.org/unsd/envaccounting/seearev/

11. SEEA CF in practice http://www.abs.gov.au/ausstats/abs@.nsf/mf/4628.0.55.001

12. Spreadsheets & charts 7.16 Economic demonstrated stock of timber, Physical 7.17 Value of timber resources, Monetary

13. ASSET Services SEEA Ecosystem Accounts Services Victorian approach to Ecosystem Accounts

14. Victorian Ecosystem accounting concepts Inter Flows (input) Inter Flows (output) ECOSYSTEM Ecosystem Services (output) Inputs/Residuals ECOSYSTEM ECONOMY/ SOCIETY Intra flows Eigenraam et al., 2012

15. Gross Ecosystem Product (GEP) *) Eigenraam et al., 2012 StepGross Domestic Product (GDP)Gross Ecosystem Product (GEP)* 1 Estimate the Gross Output of various economic activities Estimate the Gross Ecosystem Output (clean air, water, etc) from an ecosystem asset (sum of ecosystem services and inter flows) 2 Determine the intermediate consumption, i.e., the cost of material, supplies and services used to produce goods or services Determine the inputs (inter-flows) to the asset, i.e., pollination, habitat, water, nutrients used to produce Gross Ecosystem Output 3 Deduct intermediate consumption from Gross Output to obtain the Gross Value Added (summed for all businesses is GDP) Deduct inputs from Gross Ecosystem Output to obtain the Gross Ecosystem Product 4 Deduct depreciation from Gross Value Add to obtain Net Value Added Deduct depreciation (degradation) from Gross Ecosystem Product to obtain Net Ecosystem Product

16. Gross Ecosystem Product 16 Inter flows (3.5 t/y nutrients) FOREST Inter flows (2.5 t/y nutrients) Intra flows Inter flows (3.5 t/y nutrients) FOREST Inter flows (1 t/y nutrients) Intra flows The ecosystem (FOREST) is improved to process more nutrients GEP = 2.5 t/y GEP = 1 t/y Change GEP = 1.5 t/y Ecosystem Service - Clean water

17. Green GDP Develop indices of GEP to inform Green GDP –Clean air, erosion control, habitat, nutrient processing, etc Link changes in GEP to: –Changes in income (Green GDP) –Changes in environmental and ecosystem asset condition (degradation, depreciation) –Other measures of social wellbeing Accounting for Ecosystem Services –Both the SEEA CF and SEEA EA provide a strong foundation to move forward 17