Accounting Methods that Capture Value of Nature Can Lead to Smarter Decisions on Sustainable Development, Speaker Tells Economic and Social Council

2 July 2014

Accounting Methods that Capture Value of Nature Can Lead to Smarter Decisions on Sustainable Development, Speaker Tells Economic and Social Council

2 July 2014
Economic and Social Council
Department of Public Information • News and Media Division • New York

Economic and Social Council

High-Level Political Forum

AM & PM Meetings

Accounting Methods that Capture Value of Nature Can Lead to Smarter Decisions

on Sustainable Development, Speaker Tells Economic and Social Council


A new accounting method aimed at capturing the value of nature could help Governments make smarter decisions on sustainable development, the Economic and Social Council high-level political forum heard today.

“Natural capital accounting can capture total wealth of a country,” said Valerie Hickey, Sector Manager, Agriculture and Environment Services, World Bank, stressing that the method could reveal intangible values of natural resources and could help States chart sustainable economic growth paths.

Though a relatively new concept, she said, it had been endorsed by about 70 countries, including 40 low- and middle-income countries.  It had helped diversify Botswana’s water-constrained economy, better manage Guatemala’s forests, and revitalize the largest lake in the Philippines.  Natural capital accounting must be weaved into the DNA of Governments.

Following her presentation, the forum held two panel discussions, titled, respectively, “From silos to integrated policy making” and “Reviewing progress and implementation:  making the most of the high-level political forum reviews after 2015.”

The first dialogue explored ways to move towards integrated policies addressing the economic, social and environmental dimensions of sustainable development, while the second addressed how the national reviews of implementation under the forum could be organized to help accelerate progress on sustainable development goals.


VALERIE HICKEY, Sector Manager, Agriculture and Environment Services, World Bank, in her presentation on “Natural Capital Accounting for sustainable development”, noted each day 842 million people went hungry and there was a need to grow twice as much food as today to feed 9 billion people by 2050.  The world could no longer depend on boom-bust economic growth.  Natural capital accounting was a helpful tool for smarter decision-making.  It could capture total wealth of a country.  Countries could use it not only to overcome poverty but also to stay out of poverty.

She said natural capital accounting was a relatively new concept.  Since the establishment of the high-level political forum at the 2012 United Nations Conference on Sustainable Development, or Rio+20, natural capital accounting had helped many Governments make better decisions.  Natural capital accounting spoke the language of finance and development.  It could be integrated into economic and social programmes.  Values related to natural resources were intangible and hidden, but natural capital accounting had finally revealed such values.  With many countries dependent on natural resources, the method could help better manage the economy.  It could provide information to steer green growth.  It helped Governments to chart a long-term growth path.

Referring to WAVES (Wealth Accounting and Valuation of Ecosystem Services), a World Bank-led partnership that helped countries incorporate the value of nature in development, she noted that natural capital accounting had been endorsed by about 70 countries, including 40 low- and middle-income countries.  It had helped the Government of Botswana to diversify its water-constrained economy.  It had helped Guatemala to draw up a strategy to better manage forests.  It had helped the Philippines to revitalize a lake area that provided ecosystem services and produced 60 per cent of the country’s gross domestic product.

Natural capital accounting must be weaved into institutional DNA.  Leadership must be established within the ministries of finance and development, with all ministries involved.  There was a need for better communication strategies among the public and private sectors, as well as more technical support and capacity-building.  Natural capital accounting could contribute to the data revolution and the development of indicators that could measure implementation of goals on the three dimensions of sustainable development.

Panel I

Moderated by David Nabarro, Special Representative of the Secretary-General on Food Security and Nutrition, and Coordinator of the Scaling Up Nutrition Movement, the dialogue titled “From silos to integrated policy making” featured presentations by the following panellists:  Joel Khathutshelo Netshitenzhe, Executive Director, Mapungubwe Institute for Strategic Reflection, and member of the National Planning Commission, South Africa; Vladimir Drobnjak, Permanent Representative of Croatia to the United Nations, and Vice-President of the Economic and Social Council; and Indoomatee Ramma, Chief, Resource Management Division, Food and Agricultural Research and Extension Institute, Mauritius.

Lead discussants were Ferit Hoxha, Permanent Representative of Albania to the United Nations; Ousainou Ngum, Executive Director, Agency for Cooperation and Research in Development (ACORD) International, Nairobi; and Maria Ivanova, Co-Director, Center for Governance and Sustainability, McCormack Graduate School of Policy and Global Studies, University of Massachusetts, Boston, on behalf of the scientific and technological community major group.

Mr. NABARRO said the shift from silos to integrated policymaking was critical for the post-2015 development agenda and the secret of successful governance.  The dialogue would focus on the way in which institutions operated and how political processes interacted with Government and called institutions to account.  It would shed light on how to involve more stakeholders in policymaking.

Mr. NETSHITENZHE said integrated planning should be the default mode of governance, with a central pilot agency coordinating the activities of other agencies and all agencies aligning their planning cycles.  Clustering should also inform systems of accountability.  The key performance agreements of Directors General and Permanent Secretaries should also include an integrative function, not just the bodies for which they were responsible.  The sustainable development paradigm could not ignore the issue of economic inclusivity.  Cooperation must be pursued among all economic role players, and the scientific, business and academic communities.  Integration, not just coordination, was needed across disciplines.  The private sector and the scientific community had been brought together to see how the country’s vast platinum resources could be used for electricity generation, particularly in remote villages.  Recent strikes in South Africa’s platinum mines provided important lessons about the need for social integration.

Mr. DROBNJAK noted that the Council’s recent Integration Segment focused on sustainable urbanization.  Urbanization could be transformation only if the economic, environmental and geographic pillars were integrated.  Adaptation and mitigation could reduce society’s vulnerability to climate change.  While cities were becoming centres of mitigating climate change, they still needed the support of national Governments.  There was a gap between formulated national policies and their implementation on the ground.  Institutional mechanisms should aim at effective governance, integrated processes and capacity-building.  Robust monitoring assessment and reporting was vital for success.  A different approach to the same data from various angles could provide a more integrated result.  Encouraging the participation of key stakeholders was essential.

Ms. RAMMA, presenting the outcome of a study conducted in Mauritius in 2010 with the help of International Atomic Energy Agency (IAEA), said that country’s main industry was sugarcane production and its exports and its main water source was rainfall.  It was vulnerable to external shocks, such as global economic, food and energy crisis.  The study considered alternative growth models under a future climate change scenario, including a shift from sugarcane cultivation to ethanol production.  The so-called CLEW (Climate, Land, Energy and Water) approach was effective to understanding the interlinkage of climate, land, energy and water.  The approach could address fragmentations in recourse planning and policymaking related to those areas.  Political leadership must support the science-policy interface.  There was a need for more cross-cutting research and exchange of best practices.  Modellers and policymakers must improve their communication.

Mr. HOXHA, the first discussant, said that sustainable development had been talked about for more than 20 years and it was time for practical implementation.  To that end, there was a need to address fragmentations.  Both Governments and the United Nations system must review institutional arrangements to enable a shift from silos to integrated policymaking.  The United Nations architecture was not set up under one umbrella.  The Organization must send a single message and adopt a common reporting mechanism with a set of indicators.  The impact of United Nations activities on sustainable development had not been fully grasped.  The question was whether the Organization was doing enough.

Mr. NGUM said the transformational shift in seeking to achieve the Millennium Development Goals and put into place the post-2015 framework was making integration work.  But the global architecture itself was sectoral.  Governments needed visionary leadership to deal with trade-offs in a practical way.  Sustainable development could only happen if national Governments had clear policies so that institutions understood that they were working within an integrated policy framework.  Such transformations were happening in many places in Africa.  The United Nations was willing to take on a facilitative role to allow national Governments to take charge.  The educational architecture must foster creativity and build citizens that had the confidence to transform society.

Ms. IVANOVA said the scientific community was defined by “hyper specialization”.  To change that, the University of Massachusetts had created a doctorate programme in global governance and human security designed to cross silos and foster integration.  The scientific community had the ability to analyse, bravery to speak truth to power, and the determination to change the world.  The programme at her university brought together the environmental, scientific and business communities, among other areas.  It crossed geographies, focusing on training people in landlocked Ethiopia, the Horn of Africa, and Boston harbour, in Massachusetts.  The United States National Science Foundation had awarded the programme $3.1 million to focus on integrated programming in communities.

In the ensuing interactive dialogue, the representative of Kenya said stakeholder participation was essential to combat the silo mentality.  Basic social and economic rights had been incorporated into Kenya’s Constitution.  Effective decentralization was one way of ensuring all stakeholders were involved.

The representative of Zambia asked about strategies to harmonize planning language and terminology across policies in order to avoid confusion.

The representative of South Africa pointed to her Government’s national development plan, which sought to replace short-term strategies often for political gain with long-term strategies to eradicate poverty and inequality.  She called on the United Nations to support that integrated plan and those of other Governments.

A representative of non-governmental organizations cited local sustainable development plans in Brazil.  Technical efforts should be focused on making data available in local formats and building space for local participation.  He asked how to address powerful economic interests that preferred to maintain the silos.

A representative of business and industry supported the call for greater engagement with the private sector and civil society.  They should be directly engaged in programme design from the outset.

The representative of Norway cited two approaches in Norwegian policy integration in which the Government had used comprehensive planning to balance different interests.  For example, in the 1980s it balanced hydropower development and environmental values, creating peace in a conflict-ridden field.  Through green taxes, it had integrated environmental and economic interests and raised billions of Norwegian crowns in revenue.  On 27 June, Norway’s Minister of Finance announced the appointment of a Green Tax Commission, which would present its findings by 2015.

The representative of Côte d’Ivoire said his Government had created a chart to analyse sustainable development indicators in the Francophonie area and set up a peer review with other countries in order to learn lessons from other Governments’ experiences.

Ms. RAMMA, noting the lack of long-term planning on climate change, stressed the need to more deeply involve the science community in policymaking.

Mr. NETSHITENZHE said in order to ensure integrated planning individuals could not live in silos.  Governments must relate to and communicate with the public in an integrated way, particularly concerning scientific advances that benefitted communities at large.  A glossary of integrated planning language and terms was needed, as was an institution that monitored its use.  The environmental, social and economic pillars of sustainable development were important, but so were the political and informational aspects.

Mr. DROBNJAK pointed to the important role of good governance, human rights and the rule of law in sustainable development.  Stronger cooperation within a given sector would close capacity gaps.  He agreed with the need to fully harmonize integrated planning language and terms.

Mr. HOXHA said Governments must make changes in planning to achieve sustainable development, in partnership with civil society actors.  The United Nations must present a toolkit to help Governments implement the sustainable development goals, and it must plan, create, implement and monitor as one.

Mr. NGUM said integration was already happening.  He endorsed the notion of “centres of excellence”, but cautioned against setting up a bureaucratic agency for integration.  A more nimble, simple process was needed instead, in which things that had worked were shared and used collectively.

Ms. IVANOVA agreed that policies, which were statements of intent, should be bolder and that policymakers should engage with academia in a more sustainable, systematic way.  Baselines were needed within and across sectors, which could help create a common terminology for integrated planning.

Panel II

Moderated by Masood Khan, Permanent Representative of Pakistan to the United Nations, the dialogue titled “Reviewing progress and implementation:  making the most of the HLPF (high-level political forum) reviews after 2015” featured presentations by the following panellists:  Fatuma Nyirakobwa Ndangiza, Chair of the Panel of Eminent Persons, African Peer Review Mechanism; Christian Wenaweser, Permanent Representative of Liechtenstein; Christian Avérous, Economist, Head of the Division of Environmental Performance and Information, Organization for Economic Cooperation and Development (OECD) Environment Directorate; and Marianne Beisheim, Senior Researcher at the German Institute for International and Security Affairs.  Lead discussants were Baba Dramée, Technical Adviser on Sustainable Development, Directorate of Environment, Ministry of Environment and Sustainable Development, Senegal, and Daniel Angelim, Coordinator of Labour and Environment Work, Trade Union Confederation of the Americas (CSA-TUCA).

MARÍA EMMA MEJÍA VÉLEZ (Colombia), Vice-President of the Economic and Social Council, who chaired the meeting, said that General Assembly resolution 67/290 stipulated that the high-level political forum would conduct regular reviews starting in 2016.  Those reviews would be voluntary and State-led and provide a platform for partnerships, including through the participation of major groups and other relevant stakeholders.  The reviews would replace the national voluntary presentations held under the annual ministerial review of the Economic and Social Council.  The monitoring and review functions of the high-level forum would be situated in the context of the accountability framework on the post-2015 development agenda, expected to be adopted by the Assembly in September 2015.

Mr. KHAN emphasized that the post-2015 development framework must be properly implemented, building on lessons learned from the process of achieving the Millennium Development Goals.  All States must participate in the new review mechanism.  Today’s dialogue would address questions as to how the forum could learn from other review mechanisms to design and conduct its reviews to help accelerate achieving sustainable development objectives; how the reviews could contribute to strengthening partnerships; and how accountability could be made relevant to all countries and actors in the context of the post-2015 development agenda.

Mr. WENAWESER said that one of the problems in Millennium Development Goals was a lack of accountability and a lack of a review mechanism.  The national review mechanism under the forum should give States incentive to present national experiences and challenges they faced.  The review was not an exercise to point fingers at other States, but an opportunity to review what had happened and what had not.  States were accountable to their citizenry.  Yet, big questions remained regarding the scope of review.  The question was whether it should cover all 17 goals and targets under those Goals or should the scope be limited to certain areas.  The basis of the review and whether the forum had the capacity to conduct a review of 193 United Nations Member States was also asked.  There was a wealth of mechanisms, including the universal periodic review of the Human Rights Council and regional peer reviews, from which the review of the forum could learn.  His country was among seven States that had launched an initiative to set parameters for the design of the new review mechanism.

Ms. NDANGIZA said that the African Peer Review Mechanism came into being in 2003 at the initiative of the continent’s Heads of States.  Development could not be achieved without the promotion of good governance.  The review was voluntary, open, inclusive, participatory and constructive.  It was a forum for sharing best practices in four thematic areas of governance.  As present, 34 countries had acceded to the mechanism and 17 had already undertaken the process of peer review.  Revealed were cross-cutting issues, such as corruption, gender inequality, youth unemployment and mismanagement of natural resources.  Memorandums of understanding must be signed by Heads of States to show accountability at the highest level.  Every two years, those leaders would meet face to face.  They were not allowed to send their delegates.  Questionnaires had been revised in 2006 to better guide the review, consisting of five steps.  The mechanism was paying dividends.  Next year, Côte d’Ivoire would join the mechanism, bringing the total number of members to 35.

Mr. AVÉROUS shed light on lessons from the OECD peer review process.  Reviews by the Forum and the Council could improve international cooperation and national progress on sustainable development.  In the United Nations several review processes existed, including in the International Monetary Fund (IMF) and OECD.  The latter organization’s longstanding process reviewed aid, financing and environmental performance.  Since 1991, the OECD had conducted more than 80 reviews covering 41 countries.  Reviews could enhance existing capacities and performance.  Evidence was central to the process.  The point was to see how sustainable development goals were translated into national objectives.  Action did not guarantee results necessarily.  The influence of the reviews on Government policies in such areas as climate change and development were crucial.  There had been a reduction of inequalities in the IMF, OECD and Oxfam as a means to improve equity and trust in governance and to contribute to economic growth.  Partnerships must focus on creating jobs for youth in particular and reducing inequalities.

Ms. BEISHEIM said reviewing the post-2015 period should begin with implementation of goals at the national level, followed by support to regional groups, building on regional peer review mechanisms.  Beginning in 2016, there should be thematic reviews with a focus on the forum’s annual theme and building on existing sectoral reviews.  Reviews should assess a country’s own commitments and whether they were realistic and contributed to the global cause.  The third cycle should review progress in implementation during the first two cycles.  Donor countries should agree to a review of their respective commitments.  Partnerships should also be reviewed.  Member States must agree on how to build the review process, pool Secretariat services, integrate existing reviews and reports from other organizations, and provide funding for financial and technical assistance to collect necessary data and prepare reports and the review.

Mr. DRAMÉE said Senegal’s first review of the Millennium Development Goals in 2002 was not conducted with the proper tools.  Support from the Francophonie had enabled the Government to improve peer reviews.  The Francophonie peer review had allowed countries to help each other.  A guide for creating national sustainable development strategies had aided Senegal in carrying out a national strategy in 2012.  That country’s third review had focused on economic planning, based on an analysis grid developed by the Francophonie.  The point was not to reinvent the wheel, but improve what had been achieved in the field of sustainable development. 

Mr. ANGELIM said the full and genuine participation of key stakeholders for development was vital in the review process.  They should be held to account.  The sustainable development goals should be legally binding, as were labour and human rights standards.  The International Labour Organization’s (ILO) supervision mechanism could be used to guide such processes.  The system should include technical support to Member States and provide periodic reports of activities.  Reviews must be in-depth, not superficial.  Social dialogue must be based on the freedom of association.  All stakeholders should be involved on an equal footing.  The labour and human rights standards of the ILO should be a guiding point and reference at all levels.

A representative of the children and youth major group said that political commitment was essential for the forum to be an accountability mechanism for the implementation of sustainable development.  The mechanism would also need Secretariat support and the review system under the forum could be a hybrid of elements from other review mechanisms.  Inclusion of civil society was vital as it could contribute to the core work of the Economic and Social Council.

Following those interventions, Mr. Khan posed additional questions to panellists.

Asked about the atmosphere of the African Peer Review and the design of reports, Ms. NDANGIZA said there was excitement, enthusiasm and a sense of ownership.  States could be sensitive to some issues, such as the separation of power and corruption, but all points raised would be included in the reports. 

Asked if having less diversity in membership would make its peer review more cohesive from that of the United Nations, Mr. AVÉROUS said both OECD and the United Nations were intergovernmental organizations based on consensus decisions.  Recommendations must be approved by all.  On the characteristic of the review, it might appear technical because of its emphasis on economic dimensions.

Ms. BEISHEIM, responding to a question about whether the review should be conducted in New York or at regional commissions, said it should eventually go global as otherwise efforts would be lost.

A representative of Chile said his country joined the OECD Peer Review.  As a result, it could make improvements and adjustments to public policy.

A representative of the Russian Federation said the review mechanism under the forum should not become an instrument of political pressure.  It should adhere to the mandate given by General Assembly resolution 67/690 and respect the principle of State sovereignty and non-interference.

Mr. AVÉROUS said he was not initially sure how many OECD member States would volunteer to participate in the review.  But after seven or eight years, countries queued up based on mutual trust.

Ms. NDANGIZA said the “voluntary” nature was important.  If it had been mandatory, many States would not have made a commitment.  The African Peer Review killed two birds with one stone because it helped States implement international agreements, including the Beijing Platform for Action for women’s empowerment.  The review under the forum should not imitate African Peer Review although it could learn from it.  The African Peer Review had its secretariat to provide technical support and monitoring.  Advocacy was vital to raise awareness and there was a need to connect with the people.

Ms. BEISHEIM, responding on the issue about sovereignty, said the universal periodic review of the Human Rights Council was designed to treat each country fairly.

Representatives of Chile, Kenya, Finland, Zambia, Russian Federation and Liberia also participated in the discussion.

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For information media • not an official record
For information media. Not an official record.