Natural capital accounting is the process of calculating the total stocks and flows of natural resources and services in a given ecosystem or region. It is a methodology which enables governments, corporations and organisations to measure their environmental impacts and dependencies on natural capital in order to improve decision making to achieve better economic and environmental outcomes. A 2013 report[1] commissioned by “The Economics of Ecosystems and Biodiversity” (TEEB) estimated the cost of environmental externalities (damages from climate change, pollution, land conversion and depletion of natural resources) at US$7.3 trillion annually.
In 2012, the UN Statistical Commission (UNSC) approved the System of Environmental and Economic Accounts (SEEA), which contains the internationally agreed standard concepts, definitions, classifications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy. The SEEA framework follows a similar accounting structure as the System of National Accounts (SNA) in order to facilitate the integration of environmental and economic statistics. The SEEA covers asset and flow accounts, both monetary and physical. Many countries want to take natural capital accounting beyond the SEEA‐approved material resources to include ecosystem services and other natural resources that are not traded or marketed, and so are harder to measure. This is supported by different global, regional and national programmes.
[1] “Natural Capital at Risk: The Top 100 Externalities of Business”, which was prepared by TRUCOST.
