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The WAVES Global Partnership Gunars Platais The World Bank 20 th Poverty and Environment Partnership Edinburgh, May 28, 2015

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What is Natural Capital Accounting? All countries rely on System of National Accounts, but some information is missing or invisible: Depletion and degradation of natural capital minerals, forests, Environmental degradation pollution, loss of agricultural productivity Ecosystem services carbon storage, flood mitigation or pollination Natural Capital Accounting Provides crucial information to manage natural resources. Builds this information as satellite accounts to the System of National Accounts to fill the gap

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Why do Natural Capital Accounting? Better indicators for monitoring sustainable development/long- term growth Is GDP growth sustainable or are we just living off our natural capital? Better management of natural capital for growth & poverty reduction What is the real contribution of Natural Capital to GDP and household livelihoods; how do the poor depend on natural capital? How do we weigh tradeoffs among competing users, for example water, forests or land use? How much should be invested in natural capital, such as protected areas? How can we optimize use of natural capital? How can we make ecotourism work for the poor? How do we balance land use for tourism, agriculture and other ecosystem services like carbon storage or water quality?

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A few possible indicators Value of natural resources wealth The contribution of nature to the wealth of the nation Allows analysis of the sharing of economic benefits from resource exploitation Volume index of natural resources Indicates whether natural resources are being exploited sustainably in physical terms Emissions of pollutants per unit of GDP Measures whether the economy is evolving sustainably Percentage of GDP aimed at environmental protection Measures the burden of environmental protection on the economy Net national savings adjusted for the depletion of natural capital Measures national savings adjusted for the environment

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Natural Resource Wealth Source: Statistics Canada, 2012, Human Activity and the Environment: Economy and Environment, Cat. No. 16-201-X, Ottawa (http://www.statcan.gc.ca/pub/16-201-x/16-201-x2011000-eng.pdf)

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Volume Index of Natural Resources, Australia

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Canadian GHG emissions per unit of GDP & per capita Source: Environment Canada, Canadian Environmental Sustainability Indicators (http://ec.gc.ca/indicateurs-indicators/default.asp?lang=en&n=79BA5699-1)

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Percent of EU GDP spent on environmental protection

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Depletion-adjusted net national savings, Venezuela Source: World Bank, 2012, Contribution to Beyond GDP Virtual Indicator Expo, Environment Department, Washington (http://ec.europa.eu/environment/beyond_gdp/download/bgdp-ve-ans.pdf)

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For further information on conepts and methods Briefing notes: Briefing note on SEEA Central Framework: http://unstats.un.org/unsd/envaccounting/Brochure.pdf Briefing note on SEEA Experimental Ecosystem Accounting: http://unstats.un.org/unsd/envaccounting/workshops/int_seminar/note.pdf http://unstats.un.org/unsd/envaccounting/Brochure.pdfhttp://unstats.un.org/unsd/envaccounting/workshops/int_seminar/note.pdf Methodological publications: SEEA Central Framework: http://unstats.un.org/unsd/envaccounting/White_cover.pdf SEEA Experimental Ecosystem Accounting: http://unstats.un.org/unsd/statcom/doc13/BG-SEEA-Ecosystem.pdf SEEA Applications and Extensions: http://unstats.un.org/unsd/statcom/doc13/BG-SEEA- AE.pdf http://unstats.un.org/unsd/envaccounting/White_cover.pdfhttp://unstats.un.org/unsd/statcom/doc13/BG-SEEA-Ecosystem.pdfhttp://unstats.un.org/unsd/statcom/doc13/BG-SEEA- AE.pdf Library searchable library of publications (e.g. country case studies, methodological publications, etc.): http://unstats.un.org/unsd/envaccounting/ceea/archive/http://unstats.un.org/unsd/envaccounting/ceea/archive/ Research agenda accompanying SEEA-Experimental Ecosystem Accounting: http://unstats.un.org/unsd/statcom/doc13/BG-SEEA-ResearchAgenda.pdf http://unstats.un.org/unsd/statcom/doc13/BG-SEEA-ResearchAgenda.pdf

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How we do Natural Capital Accounting? UNs System of Environmental and Economic Accounting (SEEA), developed over past 20+yrs. SEEA is a comprehensive accounting framework, like the System of National Accounts (SNA), that links the use of natural capital by the economy and the impact of the economy on natural capital SEEA Central Framework was adopted as an international statistical standard February 2012, like the SNA This establishes agreed methodology for material natural resources, but more work is needed for the more difficult to measure natural capitalecosystems.

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Natural Capital Accounting under WAVES AccountsImplement SEEA Central Framework and go beyond to ecosystem accounts Physical measures & monetary value of ecosystem services produced annually and cost of degradation Distribution of benefits from ecosystem services, and burden of degradation among different stakeholders Value of assetsdeveloped for alternative scenarios (Comprehensive Wealth accounts Issues for valuation: Scaling up from specific ecosystems to national level Valuing public lands, global commons Handling thresholds, irreversibilities Valuation techniques: Market prices and near market prices where available Ecological production functions for regulating services, drawing on local and international models such as InVest, ARIES and others

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WAVES Global Partnership aims to 1)Help countries implement natural capital accounting and use for policy (mainstream in National Development Plans); 2)Help develop international standards for ecosystem accounting (UN Statistical Commission); 3)Establish a global platform for training and knowledge sharing; and 4)Build international consensus to implement NCA by all countries

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WAVES countries

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Monitoring Sustainable Development Many WAVES countries plan to produce macroeconomic indicators to monitor sustainability of growth: Wealth accounts and Adjusted Net Savings Botswana Philippines Costa Rica Indonesia Guatemala Madagascar Colombia, possibly Scorekeeping

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Botswana Promoting economic growth and diversification with jobs and poverty reduction in a highly resource dependent/constrained economy Water: constraint to growth Mineral accounts: fiscal rule for managing mineral revenues to support long term growth Nature-based tourism and land: balancing competing uses for tourism, livestock and irrigation Energy accounts: serious electricity shortages, opportunities for solar power, develop coal?

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Botswana: Water Accounts

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Philippines Managing natural capital for resilient growth under climate change Mineral accounts: new rules for sharing revenues with local communities; monitoring environmental damage Mangrove forests: coastal protection in the cyclone belt Land and ecosystem accounts Palawan: managing land for competing uses: tourism, mining, forest/agriculture/oil palm, water supply, Lake LagunaManila, 25% of population & 40% of GDP Water accounts to inform water pricing Land cover/use accounts to address sedimentation of lake, impact on flooding, electricity, fisheries

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Land cover change in Laguna Lake Basin, 2003-2010 Land CoverArea 2003 (ha)Area 2010 (ha)Change in hectares (+,-) Annual Crop91,24552,291-38,953 Built-up30,46965,68735,218 Closed Forest4,3502,831-1,519 Fishpond -76 Fallow80-8 Grassland8,29216,4828,190 Inland Water89,51794,9245,407 Mangrove Forest941-93 Marshland/Swamp-44 Open Forest21,50420,768-736 Open/Barren1,152707-445 Perennial Crop57,70443,734-13,970 Shrubs65,04963,652-1,396 Wooded grassland18,62826,8538,225 Total388,011

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Colombia Growth, biodiversity and accession to OECD Water accounts to manage competing uses National level accounts Pilot accounts in 1 of the 5 major river basins 2 small catchments Forest accounts: timber, carbon, watershed protection National accounts and for pilot river basin Green Growth indicators of natural resource productivity for application to join OECD

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Costa Rica Carbon-neutral Growth Water accounts at national level and river basin Maintaining 80+% hydropower Forest accounts Marketing Carbon, Watershed protection for hydropower PES scheme for watershed protection, carbon, and biodiversity Nature-based tourism mapped to natural resource assets and condition

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Costa Rica

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New Countries: Indonesia, Rwanda, Guatemala Indonesia: building on existing program Mineral accounts Land accounts for land use planning Water accounts Rwanda: balancing land & water needs to intensify agricultural production Land accounts Water accounts Pilot w Wildlife Conservation Society to value national parks (tourism) and wetlands (water supply, hydro power, flood protection) Guatemala: using existing NCA for development planning Forest & land: understand deforestation Water accounts, energy accounts

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Guatemala: Forest Accounts Legal logging (registered): 4% Illegal logging: 96% FOREST ASSET USE BY SECTOR

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Other Countries: India, Morocco, Mauritania India, Himachal Pradesh state: forest accounts to manage sediment runoff and hydro power Morocco: Wealth accountsthe King of Morocco wants to know if Morocco has invested too much in infrastructure and not enough in human capital Mauritania: Wealth accounts including Minerals, Agricultural land, fisheries Vulnerability of macroeconomy to commodity price changes Fisheries accounts helped in renegotiation of fisheries access agreement with EU

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Methodology and Training Field testing ecosystem accounting Watershed ecosystem services (water flows, sediment control) Coastal protection services of mangroves & coral reefs Training and capacity development

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WAVES Global engagement Post-2015 Development Agenda, SDGs Working with partners Communities of Practice Working with the private sector

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Thank you! www.wavespartnership.org