In case you missed it Vol 25, No. 02 - February 2021

India moves beyond GDP to make nature count

How can the world take nature into account in the decision-making process, moving beyond GDP? At a recent Forum on the benefits of natural capital accounting, the Indian Government demonstrated how a new statistical framework is helping them combat environmental degradation and promote sustainability.

India is one of around 90 countries that have successfully adopted the System of Environmental Economic Accounting (SEEA) including the new framework, SEEA – Ecosystem Accounting. This framework provides policy makers with the information that makes nature and the ecosystem services it provides visible in the decision-making process. The new framework for ecosystem accounting is expected to be adopted as statistical standard by the UN Statistical Commission in March.

The forum, the Natural Capital Accounting and Valuation of Ecosystem Services (NCAVES) India Forum 2021, was organized by the Government of India, the United Nations and the European Union with three sessions on 14, 21 and 28 of January.

“We need an integrated information system that covers all pillars of sustainability, economic, social and environmental,” said UN Chief Economist Elliott Harris, while stressing to participants how the new framework is essential for sustainable development. “The SEEA is an important step toward being able to measure these interconnections.”

The Indian Union Minister of Environment, Forest and Climate Change, Shri Prakash Javadekar, highlighted that the Government of India is firmly proceeding to guide the country on the path of sustainable development and looks forward to evolving a comprehensive view of the natural resources and ecosystems.

“For far too long, we have grown at the expense of nature, treating it as a resource with no limits,” said   Inger Andersen, Executive Director of the UN Environment Programme. “2020 was the year nature sent us a message – reminding us through pandemics, droughts, wildfires, hurricanes, melting glaciers, and rising temperatures – that we can no longer afford its invoices.”

Ms. Andersen underscored that it is crucial that Natural Capital Accounting be factored into monitoring frameworks for the post-2020 global biodiversity targets: “Natural Capital Accounting has an important role to play in recalibrating our relationship with nature,” she said.

While the complexity and sophistication of the framework was highlighted during the Forum, India’s experience showed that implementation is by no means insurmountable.

“India has shown us today that it does not take decades to break down information siloes. SEEA implementation can be achieved in a short period of time, and India is a shining example of this,” said Stefan Schweinfest, Director of UN DESA’s Statistics Division. It is expected that even more countries will begin to implement this new system after the new framework is adopted in March.

To learn more about the project, visit this website.  Access India’s final project report here.

Photo by Vivek Doshi on Unsplash

Economic statistics alone paint an inadequate picture of development, experts warn

Leading experts, speaking at an event hosted by the UN Department of Economic and Social Affairs, the Bennett Institute for Public Policy at the University of Cambridge and the Federal Ministry for Economic Cooperation and Development of Germany, warned that present economic statistics omit critical information about the state of ecosystems and societies that underpin the economy.

“After the Second World war, we assumed that if we got the economics right, everything else would fall into place,” said UN Chief Economist Elliott Harris. “We’ve seen that that is simply not true. The measure of economic prosperity that we’ve been using doesn’t allow us to understand how we’re doing on the social and environmental dimensions.”

Until now, the economy and the environment have been regarded as being in different spheres, said Diane Coyle, Bennett Professor of Public Policy at the University of Cambridge. But the imperative for sustainability “is that you have to think about the future.  We have to embed sustainability in decision-making.”

The experts warn that while a statistic such as GDP does a good job of showing the value of produced goods and services, it does not show the true value of assets that will be handed to the next generation. GDP does not reflect the degradation of natural capital, such as the deterioration of air quality or the loss of a forest. Economists call these unaccounted for spillover effects externalities.

It is estimated that human activity has severely altered 75 per cent of the planet’s terrestrial – and 66 per cent of its marine environment, leading to a 47 per cent decrease in ecosystem extent and condition indicators, compared to their natural baselines.

“Externalities are so perfidious because they are hidden,” said UN Chief Economist Elliott Harris. “This system exposes them to clear scrutiny.  It is a major step in the right direction.”

“Policy makers are used to the well-established accounts behind GDP which focus on flows of economic activity rather than stocks or assets,” said Sir Partha Dasgupta, Professor at Cambridge University. “It is absolutely essential to have accounts for natural capital assets. The entire future is reflected in the assets you’ve got.”

Already, more than 30 countries have tried this new system. Most recently, Brazil, China, India, Mexico and South Africa have tested this new method of accounting under the EU‑funded project Natural Capital Accounting and Valuation of Ecosystem Services.

For further information, see:

How Natural Capital Accounting Contributes to Integrated Policies for Sustainability and associated reports (United Nations, 2020); and

Building Forward: Investments in a Resilient Recovery (Agarwala, et al 2020).

The Dasgupta Review on the Economics of Biodiversity (HM Treasury, 2020).

Follow Us