initial observations from the australian regional environmental asset condition accounts trials

Initial Observations from the Australian Regional Environmental Asset Condition Accounts Trials

November 2013

Australian Regional Proof of Concept Trials Environmental Asset Condition Accounts

Peter Cosier and Carla Sbrocchi Wentworth Group of Concerned Scientists

Sydney, Australia.

Initial Observations on the Australian Regional Environmental Asset Condition Trials, 2013

NOVEMBER 2013 PAGE 2

Acknowledgements This paper is a synthesis of the work of the many people who have contributed to the development of the regional proof of concept accounts listed in the Appendix, and draws on two primary sources: Accounting for Nature: A Model for Building the National Environmental Accounts of Australia, 2008,1 and A Common Currency for Building Environmental (Ecosystem) Accounts, 2010,2 and the interim results from Regional Proof of Concept Accounts.3

We gratefully acknowledge the financial support of the Purves Environmental Fund and the Ian Potter Foundation. The authors also acknowledge the assistance of Carley Bartlett, Dr Celine Steinfeld, Dr Ian Ball, Professor Bruce Thom AM, and Jane McDonald in the preparation of material for this paper.



1. Introduction The industrial revolution has led to dramatic improvements in living standards for many people across many parts of the world, but it has also resulted in the depletion of natural capital at a scale that is approaching, and in many cases has already exceeded, the ability of biophysical systems to meet future demands on them.4

Our challenge is that “economic activity may degrade environmental assets such that they are not able to deliver the same range, quantity or quality of ecosystem services on an ongoing basis.”5

It is not possible to make decisions that will lead to a healthy and productive environment unless we have a system of environmental accounts that measures the condition of environmental assets (rivers, soil, native vegetation, groundwater, etc) appropriate to the scales at which economic and policy decisions are made.6

In 2008, the Wentworth Group of Concerned Scientists and other experts in science, economics, statistics and public policy in Australia, developed the Accounting for Nature model to place scientific information about the condition of our environment into an accounting framework.7

The purpose of the Accounting for Nature model is to provide a consistent framework for tracking the change in condition of assets through time, at any scale, using a single unit of measure. This ‘common currency’ enables policy makers to synthesise disparate sources of information so that it is possible to compare the condition of different assets, in different locations, at all scales at which policy and investment decisions are made. We call this common unit of measure an Econd.

Over the past three years, Australia’s Regional Natural Resource Management authorities, in cooperation with scientists, economists and statisticians in universities, Commonwealth and State government agencies have undertaken an Australia-‐wide trial to test the practical application of the Accounting for Nature model. The ten regions that took part in the proof of concept trials reflect different landscapes (forests, savannahs, rangelands, woodlands, urban), they are subject to different environmental pressures, and have different levels of resourcing and access to information. These trials are now in the process of formal evaluation and peer review.

In this paper we describe how the Accounting for Nature model uses the disciplines of science and statistics to create a common unit of measure for environmental asset condition accounting, we present some initial results from these trials, and describe how these accounts can be used to make policy and investment decisions at a landscape (catchment) scale.

Whilst there are still questions to be resolved, they serve to demonstrate that it is practical and feasible to create asset condition accounts using a common environmental currency to simplify nature’s complexity without reducing the rigour of scientific measurement, and to then use these accounts to inform the cost-‐effectiveness of policy and investment decisions.



2. Environmental assets “The first step towards the integration of sustainability into economic development is the establishment of better measurement of the crucial role of the environment as a source of natural capital and as a sink for by-‐products generated during the production of man-‐made capital and other human activities.”8

The environmental asset approach to measuring degradation to the environment is a practical way of describing, understanding and making better decisions in managing the environment.9

It is an accepted measure internationally (e.g. the System of Environmental Economic Accounts (SEEA) Central Framework10, the Convention on Biological Diversity11), and nationally in Australia (e.g. regional natural resource management plans12,13 national and state government investment programs,14,15 and state and national State of the Environment reports16).

In this paper we define environmental assets as biophysical features in the landscape that are measurable in time and space,17 and condition as a scientific measure of the capacity of an environmental asset to continue to provide benefits to society.18 It must incorporate elements of both the quantity of an asset (for example, the area of a forest) and the quality of that asset (for example, the diversity of plant and animal species that inhabit that forest).

An environmental asset can be an ecosystem such as a forest or a river or an estuary, it can be an individual species of mammal or bird, or it can be any other feature in nature, such as a fishery, agricultural soil, or a groundwater resource. This is consistent with the SEEA Central Framework which defines environmental assets as the naturally occurring living and non-‐living components of the Earth, together comprising the biophysical environment that may provide benefits to humanity.19

The SEEA Central Framework also describes the relationship between environmental assets and ecosystem services as “the interactions between different environmental assets within a given area that generate ecosystem services”.20 To illustrate this relationship, the following diagram (Figure 1) shows that an environmental asset, such as an estuary, provide some services and goods to people (blue) and but also produce services by maintaining themselves through regulating processes (green).

Figure 1: Environmental Assets comprise the physical form of both ecosystems and other natural

resources which provide goods and ecosystem services. (Adapted from CSIRO, 2001)21



3. A common currency for measuring the condition of environmental assets

The SEEA Central Framework provides methods for accounting for those environmental assets which produce market-‐based goods and services. It identifies the need to measure the quality of environmental assets to fully address degradation.22

The Accounting for Nature model is underpinned by two important concepts: 1. Environmental asset condition needs to be measured both at scales where biophysical

processes operate, and at scales where economic and policy decisions are made; and 2. Asset condition accounts need to be constructed using a common unit of measure -‐ a

common currency -‐ so that the relative condition of different assets can be compared: in different places, at different scales, at any time, and when using different indicators.

This common currency is called an Econd. An Econd is a scientific measure of the condition of an environmental asset. It does not imply a monetary value, nor does it describe a desired state.

An Econd describes the condition of an environmental asset against a scientific estimate of the condition of that asset in the absence of significant post-‐industrial human alteration (the reference benchmark. An Econd is a number between 0 and 100, where 100 indicates the asset is in the same condition as it was prior to significant post-‐industrial human alteration, and 0 indicates system function is absent.23

The reference benchmark acts as a normalising factor by setting the upper boundary for the measurement of an environmental asset. Its purpose is to provide a reference point, or baseline, by which both past and future changes in the condition of any environmental asset can be measured and the relative condition of the asset can be compared with other assets across time and space. This reference benchmark does not have to mean a pre-‐industrial date, although that is often the most convenient way to describe it. Another option is to measure an asset that is known to be in an undisturbed condition -‐ what science calls a reference site. Another option is for science to estimate this biophysical condition using models. For more information on the science behind reference benchmarking see Cosier and McDonald (2010)24.

The benefit of using this reference benchmark method is that it creates a standardised numerical unit that is capable of comparison and aggregation, at any scale where policy and economic decisions that affect the environment are being made.

The Econd is calculated by combining a number of individual indicator condition scores (e.g. pH and salinity in rivers or organic carbon and erosion measures in soils) to produce a scientific measure of the condition of the asset as a whole.25

The Econd is calculated for the categories within the asset (eg. for each subcatchment in the rivers asset, for each native vegetation type in the native vegetation asset, for each land management unit within the soils asset). These are then assembled to generate an overall Econd for each asset in a region (e.g. for rivers, for native vegetation, for soils).



4. Application of the common currency In this section we take you through the structure of the regional asset condition accounts and then present examples of the application of the Accounting for Nature model in the regional proof of concept trials across Australia.

First some background. These asset condition accounting trials were led by the Chairs of Australia’s 54 regional natural resource management bodies, in partnership with the Wentworth Group and assisted by other scientists, economists, and statisticians from the Australian Bureau of Statistics, the Australian Bureau of Meteorology, Australia's premier scientific research agency -‐ CSIRO, the Ian Potter Foundation (a major philanthropic institution in Australia), and experts in a number of state government agencies (see Appendix 1).

The trials were conducted to test whether it is practical and affordable to apply a scientifically robust measure of the condition of any environmental asset, using the common currency at a regional (landscape) scale, with the objective of then aggregating this information to form a set of national environmental asset condition accounts.

Part of these trials is to see what is feasible using existing information, with limited resources. For this reason, no new funds were sought from government to conduct the trials.

The ten regions participating in the trials were selected because they reflect different landscapes (forests, savannahs, rangelands, woodlands, urban), they are subject to different environmental pressures, and have different levels of resourcing and access to information.

This has enabled us to test the practical application of the model: whether those regions with the least data, in the remotest locations, with the fewest resources, have the capability to create a set of accounts that still satisfy high scientific standards.

Figure 2 displays the assets that were tested in each of the regions.

Environmental AssetsSelected for the Australian

Regional Proof of Concept Trials

Coast

Native VegNative Fauna Soil Rivers Wetlands

Ground-‐water Floodplains Estuaries Fauna Other

Central West

Corangamite

EPSouthern

Right Whales

NACC Birds

Namoi

North Central

Northern Gulf

NRM North

QMDC

SEQ Dugongs Moreton Bay

Region

Land Freshwater Marine

Figure 2

One asset common to all regions (native vegetation) was chosen so that we could test whether different measures of the same asset could be aggregated to create national accounts.

A range of other assets across the regions were also tested so that we could evaluate the practical and technical implications for constructing a holistic set of assets across the continent.



Whilst there are still many questions to be resolved, the initial results from these trials demonstrate the potential for this common currency (an Econd) to help policy makers set measurable policy standards, and then inform the cost-‐effectiveness of investments aimed at meeting those policy standards.

The Accounting for Nature model requires any environmental account, at any scale, to be accredited by an independent scientific body, against national accounting standards. This is important, because scientific accreditation is essential to the credibility of the accounts so that community and policy makers can have confidence in the data when making policy and investment decisions.26 These accounts that have been created in these regional trials are now being assessed by our Scientific Standards and Accreditation Committee.

Structure of the Environmental Condition Accounts:

Environmental assets are categorised into what we call Asset Classes: Land, Freshwater, Coasts, Marine and Atmosphere (Figure 3).

Structure of Environmental Asset Condition Accounts

Figure 3

2006 2013 2018Native Vegetation 54 50

Soils 60Native Fauna 72

Rivers 60 65Wetlands 54FloodplainsGroundwater 68 52Estuaries 61 61Beaches 81Dunes 57Reefs 38 42

Fisheries 45 45Marine Fauna

Air quality in citiesGreenhouse emissions

MARINE

ATMOSPHERE

Environmental Asset Class

Examples of Environmental Assets

Environmental Asset Condition (Econd)

LAND

FRESHWATER

COASTS

Each asset class comprises a range of environmental assets. An environmental asset is a biophysical feature in the landscape that is measurable in time and space.27 It can be any biophysical feature in nature that society considers to be an asset. It can be an ecosystem such as a forest or a river or an estuary, it can be an individual species of mammal or bird, or it can be any other feature in nature, such as a fishery, agricultural soil, or a groundwater resource.

The most basic structure of an environmental asset condition account is a summary table, which describes the asset classes, each environmental asset, and the Econds for each asset at a particular time and over different time periods to establish trend.

A series of tables that sit underneath the summary tables show the number and types of assets in the region, the individual indicator condition scores and the calculated Econds for each asset.



Figure 4 is an example of a section of the Native Vegetation Account for the Eyre Peninsula region in South Australia.

Eyre Peninsula, South AustraliaNative Vegetation Condition Account 2012

Regional Area

(hectares)

Regional Indicator Condition Score (Extent)

Regional Indicator Condition Score

(Compos ition)

Regional Indicator Condition Score

(Configuration)

Regional Econd Extent x

(Comp+Config/2)

5,130,353 47 60 47 25.0

Condition Measure

Indicator Condition Score

Econd

Eyre Peninsula Region 5,130,353 25.062

Extent (Ha) 186,558 3.6 165246 89Composition (index) 100 66.30 66Configuration (index) 100 73.62 74

11Extent (Ha) 23,320 0.5 5013 21Composition (index) 100 59.67 60Configuration (index) 100 46.67 47




NATIVE VEGETATION ASSET ACCOUNT -‐ EYRE PENINSULA, SOUTH AUSTRALIA -‐ 2012

Asset Category

Indicator of Asset Condition (unit of measure)

Reference Benchmark % Total Area

2012

Arid & semi-‐arid acacia low open woodlands & shrublands with

Arid & semi-‐arid hummock grasslands

Callitris forests & woodlands

Casuarina & Allocasuarina forests & woodlands

Chenopod shrublands

Figure 4

It shows how the asset condition accounts measure the quality of an asset, not just its quantity.

This is essential if they are to be of any value in addressing the degradation of an asset,28 and the impact of this degradation on the services those assets provide to people.29

In this example, the quality of the native vegetation asset measures both the extent (i.e. what proportion of the area of the original vegetation remains), and the composition (i.e. the structural integrity of the vegetation, such as species richness and weediness). If possible, it should also measure the configuration of that asset (i.e. where the remaining vegetation is located in the landscape).30

Presentation of the Condition Measures:

One of the great powers of an accounting system using the Econd (the common environmental currency) is that it allows information for all assets, irrespective of the indicators used or the scale of measure, to be presented graphically.

Figure 5 is a summary of the relative condition of all of the assets that have been submitted from each of the regions as part of the proof of concept trials. It displays the relative condition of every asset in every region, across the continent.



Condition of Environmental Assetsin each Region (Econds)

0

20

40

60

80

100

Native Fauna

Econ

d

Central West CMANew South Wales

0

20

40

60

80

100

Native Vegetation Wetlands

Corangamite CMAVictoria

020406080100

Native Vegetation Whales

Eyre Peninsula NRM BoardSouth Australia

020406080100

Native Vegetation Native Fauna (birds)

Econ

d

Northern AgriculturalWestern Australia

020406080100

Native Vegetation (Partial)

Namoi CMANew South Wales

0

20

40

60

80

100

Native Vegetation Rivers Wetlands

North Central CMA Victoria

0

20

40

60

80

100

Rivers Estuaries

Econ

d

NRM North Tasmania

020406080100

Native Vegetation Rivers Wetlands

Queensland Murray Darling Queensland

020406080100

NativeVegetation

Rivers MoretonBay (Novel)

Estuaries Dugongs

SEQ Catchments Queensland

Figure 5

It shows, for example, that native vegetation in the Northern Agricultural Catchments region of Western Australia is in a better condition than native vegetation in the North Central region in Victoria, and that the regional population of Dugongs in the Ramsar-‐listed Moreton Bay estuary in Queensland are in a relatively poorer condition than the population of Southern Right Whales in the Great Australian Bight of South Australia.

Figure 6 shows the relative condition of native vegetation in seven regions which completed or partially completed a full condition based Econd.

Condition of Native Vegetationacross 7 Trial Regions

0

10

20

30

40

50

60

70

80

90

100

Namoi QMDB NACC SEQ Eyre Peninsula Corangamite North Central

Econ

d

Region

Figure 6



Figure 7 shows the level of detail that sits behind each of the regional native vegetation condition accounts, using the Northern Agricultural Catchments of Western Australia as one example.

0

10

20

30

40

50

60

70

80

90

100

Halosarcia open chenopod shrubland

Acacia sparse shrubland

Eucalyptus open mallee shrubland / Beaufortia m

ixed shrubland / Spinifex mixed open tussock grassland

Atriplex mixed open chenopod shrubland

Melaleuca m

ixed heath / Baeckea mixed heath

Atriplex mixed sparse chenopod shrubland

Melaleuca isolated trees

Dryandra shrubland / Eucalyptus woodland / Eucalyptus w

oodland

Spinifex mixed open tussock grassland / Calocephalus m

ixed open forbland / Acacia open shrubland / Melaleuca closed shrubland / Acacia…

Acacia mixed shrubland

Acacia mixed open shrubland / Banksia m

ixed open shrubland / Calytrix mixed heath

Acacia open shrubland / Spinifex mixed open tussock grassland / Spinifex m

ixed open tussock grassland / Myoporum

mixed open shrubland…

Acacia closed shrubland

Dodonaea open shrubland

Banksia woodland / Banksia m

ixed shrubland / Melaleuca isolated trees

Allocasuarina mixed closed shrubland

Eucalyptus open woodland / Acacia shrubland / M

elaleuca shrubland

Atriplex open chenopod shrubland

Actinostrobus mixed open shrubland

Acacia mixed shrubland / Eucalyptus open w

oodland

Allocasuarina open shrubland / Allocasuarina shrubland

Halosarcia open sam

phire shrubland

Hakea open shrubland

Verticordia mixed heath / Acacia open shrubland

Melaleuca open forest

Dryandra shrubland

Allocasuarina mixed shrubland

Hakea heath / M

elaleuca mixed open shrubland

Verticordia heath / Acacia shrubland / Allocasuarina closed shrubland / Acacia isolated trees

Hakea m

ixed closed shrubland / Melaleuca closed shrubland

Banksia open woodland

Acacia mixed open forest

Acacia closed shrubland / Eucalyptus sparse mallee shrubland / M

elaleuca closed shrubland

Acacia open shrubland / Allocasuarina shrubland

Allocasuarina open shrubland

Eucalyptus woodland

Gastrolobium

mixed shrubland / Allocasuarina m

ixed shrubland

Dryandra closed shrubland

Halosarcia m

ixed open samphire shrubland

Agonis mixed open shrubland

Allocasuarina closed shrubland

Acacia mixed shrubland / Allocasuarina m

ixed shrubland / Eucalyptus open mallee shrubland / Acacia closed shrubland

Actinostrobus mixed open shrubland / Allocasuarina closed shrubland

Econ

d

Northern Agricultural Catchments, Western AustraliaCondition of Native Vegetation, 2012

Regional Econd = 27

Figure 7

It shows that the overall condition of native vegetation in this region has an Econd of 27. It also shows that there are 22 vegetation types with an Econd of less than 10.

This means that the quality of this vegetation: how much there is (extent), combined with its functional and structural integrity (composition) and how it is configured across the landscape (configuration), is less than 10 per cent of what it would have been prior to the clearing of the native vegetation and the damage to the vegetation that remains by the introduction of weeds and feral animals.

Figure 8 shows the same information for native vegetation in six regions across the continent.

0

20

40

60

80

100

Halosarcia open…

Acacia shrubland /…Atriplex m

ixed sparse…Dryandra m

ixed open…Acacia m

ixed open…Acacia open shrublandAllocasuarina m

ixed…Eucalyptus m

ixed open…Allocasuarina open…Eucalyptus m

ixed open…Dryandra shrubland

Melaleuca shrubland

Banksia open woodland

Halosarcia open…

Eucalyptus woodland

Allocasuarina shrublandAllocasuarina closed…Banksia m

ixed open forest

0

20

40

60

80

100

Eucalypt Open Forests

Other G

rasslands, Herblands, Sedgelands

and Rushlands

Callitris Forests and Woodlands

Other Shrublands

Mallee W

oodlands and Shrublands

Tussock Grasslands

Eucalypt Woodlands

Chenopod Shrublands, Samphire

Shrublands and Forblands

Low Closed Forests and Tall Closed

Shrublands

Eucalypt Open W

oodlands

Casuarina Forests and Woodlands

Mallee O

pen Woodlands and Sparse

Mallee Shrublands

0

20

40

60

80

100

Other open w

oodlands (MVG

31)

Mangroves (M

VG23)

Low closed forests &

tall closed…

Melaleuca forests &

woodlands (M

VG09)

Other grasslands, herblands,…

Heathlands (M

VG18)

Tussock grasslands (MVG

19)

Casuarina foests & woodlands (M

VG08)

Inland aquatic -‐ fringing vegetation…

Eucalypt tall open forests (MVG02)

Rainforests & vine thickets (M

VG01)

Eucalypt open woodlands (M

VG11)

Eucalypt open forests (MVG

03)

Eucalypt woodlands (M

VG05)

Acacia forests and woodlands (M

VG06)

0

20

40

60

80

100

Chenopod shrublands, samphire…

Naturally bare -‐ sand, rock, claypan,…

Acacia shrublands (MVG

16)

Other grasslands, herblands,…

Eucalypt tall open forests (MVG02)

Other shrublands (M

VG17)

Heathlands (M

VG18)

Acacia open woodlands (M

VG13)

Tussock grasslands (MVG

19)

Eucalypt open woodlands (M

VG11)

Hum

mock grasslands (M

VG20)

Other open w

oodlands (MVG

31)

Callitris forests & woodlands (M

VG07)

Eucalypt open forests (MVG

03)

Eucalypt woodlands (M

VG05)

Rainforests & vine thickets (M

VG01)

Acacia forests and woodlands (M

VG06)

Melaleuca forests &

woodlands (M

VG09)

Casuarina foests & woodlands (M

VG08)

Econ

d

0

20

40

60

80

100

Rainforests and Vine Thickets

Chenopod Shrublands, Samphire…

Casuarina Forests and Woodlands

Mangroves

Eucalypt Open Forests

Acacia Forests and Woodlands

Other Shrublands

Eucalypt Woodlands

Other Forests and W

oodlands

Other G

rasslands, Herblands,…

Heathlands

Low Closed Forests and Tall Closed…

Eucalypt Open W

oodlands

Tussock Grasslands

0

20

40

60

80

100

Arid & sem

i-‐arid acacia low open…

Chenopod shrublandsOther shrublands

Other Acacia tall open shrublands

Melaleuca shrublands &

open…Tem

perate tussock grasslandsMixed chenopod, sam

phire or…Callitris forests &

woodlands

Mallee w

ith an open shrubby…Mallee heath &

shrublandsWet tussock grassland, herbland,…

Mallee w

ith tussock grass…Eucalyptus w

oodlands with…

Arid & sem

i-‐arid hummock…

Mallee w

ith hummock grass

Eucalyptus forests & woodlands…

Casuarina & Allocasuarina forests…

Mangroves

Melaleuca open forests &

…Other forests &

woodlands

Heath

Eucalyptus low open w

oodlands…

Econ

d

Native Vegetation Assets

Eyre Peninsula, South Australia Corangamite CMA, Victoria Northern Agricultural, WA

Queensland Murray-‐Darling SEQ Catchments, Queensland North Central, Victoria

Figure 8



Figure 9 is the same information described in Figure 8, combined with geographic imagery to show the spatial distribution of the condition of the remaining native vegetation in those same six regions.

Condition of Remaining Vegetation

Eyre Peninsula, South Australia Corangamite CMA, Victoria

Queensland Murray Darling Basin SEQ Catchments, Queensland North Central, Victoria

Northern Agricultural, WA

Figure 9

Figure 10 shows the level of detail that imagery can provide to show the condition of native vegetation across the Murray Darling region in Queensland.

Queensland Murray Darling BasinCondition of Remaining Native Vegetation

Figure 10

Because the information was organised in an agreed accounting framework these graphics and the following maps were produced within a matter of days, notwithstanding this trial was run without any additional funding from government, using existing data where possible and filling data gaps with the assistance of experts and in a few instances by direct survey,.



Figure 11 presents a further level of detail in one of the regional vegetation accounts. It shows not only the Econd for each of the 23 major vegetation groups described in Figure 8 (the red bars); it also shows the main pressures that are affecting the condition of the vegetation.

How much has been cleared -‐ the extent of the remaining vegetation (the green bars), the composition of the remaining vegetation in each of these vegetation groups (the orange bars), and the configuration of the remaining vegetation across the landscape (the blue bars).

0

10

20

30

40

50

60

70

80

90

100

Eucalyptus low open w

oodlands with tussock grass

Heath

Low closed forest or tall closed shrublands

Other forests &

woodlands

Melaleuca open forests &

woodlands

Mangroves

Casuarina & Allocasuarina forests &

woodlands

Eucalyptus forests & woodlands w

ith grassy understorey

Mallee w

ith hummock grass

Arid & sem

i-‐arid hummock grasslands

Eucalyptus woodlands w

ith shrubby understorey

Mallee w

ith tussock grass understorey

Wet tussock grassland, herbland, sedgeland or rushland

Mallee heath &

shrublands

Mallee w

ith an open shrubby understorey

Callitris forests & woodlands

Mixed chenopod, sam

phire or forblands

Temperate tussock grasslands

Melaleuca shrublands &

open shrublands

Other Acacia tall open shrublands

Other shrublands

Chenopod shrublands

Arid & sem

i-‐arid acacia low open w

oodlands & shrublands

with chenopods

Cond

ition

Score

Regional Econd = 25

Econd Configuration Composition Extent

Major Vegetation Groups

Eyre Peninsula, South AustraliaNative Vegetation

Asset Condition Scores

Figure 11

For example, the left hand side of the graph shows that five vegetation groups have an Econd of less than 1, and that the primary reason for this is that they have been reduced in area to less than 1 per cent of their original extent. In comparison, the extent of Temperate tussock grasslands (fifth from the right) is high (with an indicator condition score of 93), but it has an Econd of less than 50 because the composition of that vegetation score is only 53. The Econd for this asset is calculated by multiplying the quantity (extent) by the quality (average of composition and configuration indicator scores).



Figure 12 maps one of the measures of the composition indicator.

This is possible because the survey undertaken to produce the composition indicator also recorded the level of weeds that affect each vegetation type.

This figure shows where weeds are having the greatest impact on the condition of native vegetation across the region: the darker the colour, the greater the impact of weeds. If this measure was used in all regions across Australia, we would have, almost as a by-‐product of the accounts, a map of the impact of weeds across the entire country.

This is made possible because all the underpinning information on each indicator is now organised in this single common accounting framework, using the common environmental currency.

Measuring Trend:

Understanding the health of an environmental asset requires an understanding of the condition of an asset at a particular point in time. Of equal importance to policy makers and investors is the ability to monitor the direction and rate of change in the condition of those assets.

Collecting trend data takes time, and in landscapes with high climate variability such as Australia, it can be many years before sufficient data can be assembled to give useful trend information.

We have however discovered that quite often there is a vast amount of existing data that can be used to measure the condition of environmental assets that dates back, in some cases, decades. For example, many regions across Australia have long time series data for rivers and estuaries.



South East Queensland’s environmental account (Figure 13) includes data from 2003 to 2011 for the condition of estuaries around Brisbane.

0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2007 2008 2009 2010 2011

Econ

dAll Estuaries

Albert River estuaryBremer River estuaryBrisbane River estuaryCabbage Tree Creek estuaryCaboolture River estuaryCoomera River estuaryCurrumbin Creek estuaryEprapah Creek estuaryLogan River estuaryMaroochy River estuaryMooloolah River estuaryNerang River estuaryNorth Pine River estuaryOxley Creek estuaryPimpama River estuaryTallebudgera Creek estuaryTingalpa Creek estuaryNoosa River estuary

0102030405060708090100

2003 2004 2005 2006 2007 2008 2009 2010 2011

Econ

d

Moreton Bay Ramsar siteBramble Bay

Broadwater

Central Bay

Deception Bay

Eastern Banks

Eastern Bay

Pumicestone Passage

Southern Bay

Waterloo Bay

South East Queensland Catchments Trend in Estuary Condition

Figure 13

It also shows in more detail, the condition of various parts of the Ramsar-‐listed Moreton Bay estuary – a marine estuary of international conservation significance.

In this next example (Figure 14), we use Landsat data (which dates back to the 1970s) acquired for the National Carbon Accounting System used to measure Australia’s greenhouse emissions from land use change.

Central West, NSWTrend in Native Vegetation Extent

0

10

20

30

40

50

60

70

80

90

100

1970 1975 1980 1985 1990 1995 2000 2005 2010

Extent (%

of referen

ce)

Dry sclerophyll forests (Shrubby subformation) Dry sclerophyll forests (Shrub/grass subformation)

Semi-‐arid woodlands (Shrubby subformation) Wet sclerophyll forests (Grassy subformation)

Forested wetlands Grassy woodlands

Grasslands Freshwater wetlands

Semi-‐arid woodlands (Grassy subformation) Arid shrublands (Acacia subformation)

Arid shrublands (Chenopod subformation) TOTAL EXTENT

Figure 14

The former national Department of Industry and Climate Change used this same dataset to hindcast trend in the change in extent of the various vegetation groups. It shows that the total extent of native vegetation (one major indicator of condition) in the Central West region of NSW



is very low (< 20%). It also shows that there has been a noticeable change around 1998 and 1999, particularly in two vegetation groups: the ‘Dry sclerophyll forests’ and the ‘Arid shrublands”.

Another innovation to overcome the lack of historical data is to combine oral history, local knowledge and expert opinion to construct a long term trend graph (Figure 15)31 which sets past and current management into context against the condition of the asset and documents changes to the asset over time.

Wooroonooran Nature RefugeNorth Queensland

Benefits of Trend Information

Source: Richard Thackway, VAST

Limited land management by Ngadyan people

Figure 15



5. Using asset condition accounts for policy and investment decisions

The purpose of creating a system of environmental accounts is to link the maintenance of our natural capital into everyday economic decisions so that people can make informed decisions that lead to a healthy and productive environment.

Placing scientific information into an accounting framework does this by allowing policy makers and the community to:

1. Better understand complex scientific information; 2. Set and evaluate measurable standards and policy targets; 3. Estimate the cost of meeting those standards and targets; 4. Evaluate the cost-‐effectiveness of investment decisions; and then 5. Monitor progress over time.

The first step towards a healthy and productive society that is in harmony with nature – the promise the world’s leaders signed up to in Rio in 1992 -‐ is to understand how our natural systems operate, and the impact policies and economic decisions have on our natural capital.

Natural systems are complex, and when information is too complex, it makes effective decisions impossible.

Presenting complex information using different indicators for a range of different assets is confusing even to experts. Just imagine how impossible it is to non-‐experts who rely on this information to make judgements with all this complexity. The simple truth is they can’t, and so they are forced to resort to opinion, and as a result we have conflict when we should have agreement.

The creation of a common environmental currency provides the opportunity to simplify complexity without reducing scientific rigour. In doing so, environmental condition accounts can fundamentally change our understanding of development and environment.

It is important to emphasise that an Econd does not imply a monetary value, nor does it describe a desired state, but it does inform the setting of targets, provides for metrics to estimate the cost-‐effectiveness of investments aimed at reaching those targets, and then monitors the success of these interventions over time.

The condition of a river which provides safe drinking water may differ, for example, from that which flushes salt out of inland river systems, or provides habitat for a sustainable fishing industry, or provides opportunities for recreation.

The target condition for native vegetation might vary not only depending on the service that it is providing, but also where that service is located in the landscape. For example, a target condition may include protecting water quality in rivers, or controlling dryland salinity, or providing habitat for threatened species, or protecting agricultural soil from wind and water erosion.

One method of communicating this information, increasingly adopted by natural resource management agencies across the world, is to produce a Report Card. One example in Australia is the annual Report Card produced by the Healthy Waterways Partnership in South East Queensland32 (Figure 16).

This report card method has proven to be a very effective in communicating complex scientific knowledge in engaging multiple stakeholders (tourism, business, local government, communities) in the process and encouraging them to take ownership for the actions arising from the results of the monitoring program.



South East QueenslandHealthy Waterways Partnership

Freshwater Report Card 2011

Figure 16

The same accounts that describe the condition of our environmental assets can then be used to inform policy targets. For example, the information in Figure 17 was used to set policy targets for prioritising investments in native vegetation management. It shows the current extent of the 77 types of native vegetation in the Namoi Catchment Management Authority region of NSW.

This information informed their regional Catchment Plan, which concluded that the Namoi valley would be a more healthy and productive environment, if the 19 most depleted native vegetation assets were restored to a 30% level. This has become their policy target.33

Namoi Catchment Management Authority, New South Wales

Linking to Policy Outcomes

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It is possible to do this because we have an environmental condition account which connects asset condition (in this case using an extent measure only) to policy targets and policy targets to investment decisions.



By calculating the areas of restoration required to restore the under-‐represented vegetation types, it is now possible to establish:

• the area of restoration required to achieve the 30% target; • the cost of restoring each of those hectares based on previous project expenditure, to

produce an estimate of the a total cost of achieving their target; and • an estimate of the economic value of the carbon sequestration that would result from

achieving that restoration target.

A second example of the use of asset condition accounts, which can change the way we understand and manage our freshwater resources and inform policy and investment decisions to protect those waterways, is provided by the South East Queensland Healthy Waterways Partnership (Figure 18).

South East Queensland RegionFigure 18

Increased pollution caused by urban development is placing significant pressures on the condition of its waterways which flow into the Ramsar listed Moreton Bay estuary (Figure 19)34.



South East QueenslandMorton Bay Ramsar Site

Trends in Ecosystem Health

High rainfall after a decade of drought A decade's worth of sediment, nutrients and other contaminants was flushed downstream.

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Figure 19

Because of its long-‐term asset condition monitoring program, the SEQ Healthy Waterways Partnership can place 10 years of data into models (Figure 20), which incorporate hydrology, climate, and predicted population growth, and produce an estimate of the added pollution loads on river and estuary assets into the future.35

South East Queensland Indicators of Freshwater Condition

Source: SEQ Healthy Waterways Strategy 2007-‐2012

Figure 20

SEQ Catchments, the natural resources management body for this region, used these environmental accounts to produce an infrastructure investment plan for maintaining the condition of its freshwater assets, as the region grows by a projected 1 million people.

They then used the information in these accounts to evaluate the most cost-‐effective actions to achieve these abatement targets (Figure 21).36



South East QueenslandLong Term Annual Marginal Abatement Costs

Figure 21

This analysis concluded that the cost of keeping Moreton Bay estuary at a “B” is an annual cost of $25 million. This is less than 1% of the overall urban infrastructure budget for the region and an annual cost to ratepayers of $6.37

SEQ Catchments was able to show this because they had built a set of environmental accounts, based on scientific information that could be used to identify cost-‐effective investment decisions.

As part of the same process they found that sediment was a primary contributor to the decreased condition in the rivers and estuaries of South East Queensland. With this information they were able to locate areas across the landscape that are at high risk of losing sediment, and then prioritise investments into those areas (marked in red in Figure 22). 38

South East QueenslandLand Management Hot Spots

Figure 22



6. Conclusion In 1992, the world’s leaders convened the first Earth Summit in Rio, Brazil. This summit produced the Rio Declaration on Environment and Development, the first principle of which is that "human beings ... are entitled to a healthy and productive life in harmony with nature."39

Despite this declaration, we have failed to address the fundamental problem: internalising environmental degradation into everyday economic decision making.

We have suggested a place to start, by measuring the condition of our environmental assets.

Condition is a scientific measure of the capacity of an environmental asset to continue to deliver benefits to society. If such a measure is to have a meaningful impact in creating an economic system that creates a healthy and productive society in harmony with nature, this condition measure needs to incorporate both the quantity of an asset and the quality of that asset. In 2008, the Wentworth Group of Concerned Scientists and other experts in science, economics, statistics and public policy in Australia, developed the Accounting for Nature model. 40 This model placed scientific information about the condition of the environment into an accounting framework which allows policy makers and the community to:

1. Better understand complex scientific information; 2. Set and evaluate measurable standards and policy targets; 3. Estimate the cost of meeting those standards and targets; 4. Evaluate the cost-‐effectiveness of investment decisions; and then 5. Monitor progress over time.

Asset condition accounting using the Accounting for Nature model to create a common environmental currency has been tested across ten of Australia’s 54 Natural Resource Management regions.

The initial results from these trials demonstrate the potential for this common currency (an Econd) to help policy makers set measurable policy standards, and then inform the cost-‐effectiveness of investments aimed at meeting those policy standards.

These regional trials have now been completed, and the accounts and accompanying information statements are now being assessed by a Scientific Standards and Accreditation Committee. Once this is completed a formal evaluation of the trials will be completed and that evaluation will be internationally peer reviewed.

Whilst there are still many questions to be resolved, what these trials do demonstrate is the value of a common environmental currency to enable us to simplify nature’s complexity without reducing the rigour of scientific measurement.



Appendix 1: Contributors to the Australian Regional Environmental Accounts Trials

(organisation titles correct at time of the contributor’s involvement)

Andre Zerger, Bureau of Meteorology Andrew Baldwin, NRM North Andrew Biggs, QLD Department of Natural Resources and Mines Andrew Cadogan-‐Cowper, Australian Bureau of Statistics Andrew Houley, Reef Catchments Annelise Wiebkin, SA Department of Environment, Water and Natural Resources Annie Lane, Natural Resources Eyre Peninsula SA Department of Environment, Water and Natural Resources Anthony Greenhalgh, Central West Catchment Management Authority Ayesha Tulloch, University of Queensland Belinda Allison, Bureau of Meteorology Bill Allen, Australian Bureau of Statistics Brad Page, SA Department of Environment, Water and Natural Resources Brian Foster, Natural Resources Eyre Peninsula SA Department of Environment, Water and Natural Resources Bronwyn Cameron, Namoi Catchment Management Authority Bruce Brown, Namoi Catchment Management Authority Bruce Thom, Wentworth Group of Concerned Scientists Carley Bartlett, Wentworth Group of Concerned Scientists Caroline McFarlane, Wentworth Group of Concerned Scientists Carolyn Raine, Central West Catchment Management Authority Cecilia Woolford, Natural Resources Eyre Peninsula SA Department of Environment, Water and Natural Resources Chris King, Northern Agricultural Catchments Council Claire Parkes, Wentworth Group of Concerned Scientists Damian Wells, North Central Catchment Management Authority Danny O’Neill, National NRM Regions’ Working Group Dave Pongracz, WA Department of Parks and Wildlife David Karoly, Wentworth Group of Concerned Scientists David Manning, SEQ Catchments Denis Saunders, Wentworth Group of Concerned Scientists Donna Smithyman, Corangamite Catchment Management Authority Emma Jackson, Northern Agricultural Catchments Council Emma McIntosh, Wentworth Group of Concerned Scientists Eva Abal, University of Queensland Evelyn Poole, Natural Resources Eyre Peninsula SA Department of Environment, Water and Natural Resources Fiona McKenzie, Wentworth Group of Concerned Scientists Francesca Andreoni, Namoi Catchment Management Authority Gareth Smith, Corangamite Catchment Management Authority Garry Cook, CSIRO Gary Stoneham, Victorian Department of Treasury and Finance Geoff Penten, Queensland Murray Darling Committee George Truman, Namoi Catchment Management Authority Greg Keighery, WA Department of Parks and Wildlife Heather Baldock, Eyre Peninsula NRM Board Hugh Possingham, Wentworth Group of Concerned Scientists James McKee, NRM North James Shaddick, North Central Catchment Management Authority

Jane McDonald, University of Queensland Jen Shearing, Central West Catchment Management Authority Jessica Hasker Bowman, Victorian Department of Environment and Primary Industries Jim McDonald, Namoi Catchment Management Authority John Bethel, Northern Gulf Resource Management Group John Williams, Wentworth Group of Concerned Scientists Joselito Chua, Victorian Department of Environment and Primary Industries Judy Henderson, Northern Rivers Catchment Management Authority Kate Clarke, Natural Resources Eyre Peninsula SA Department of Environment, Water and Natural Resources Lesley Hughes, Wentworth Group of Concerned Scientists Marieke Jansen, Northern Agricultural Catchments Council Mark Eigenraam, Victorian Department of Environment and Primary Industries Mark Lound, Australian Bureau of Statistics Mark Silburn, QLD Department of Natural Resources and Mines Max Kitchell, NRM South Michael Vardon, Australian Bureau of Statistics Mike Grundy, CSIRO Neil Byron, Wentworth Group of Concerned Scientists Nick McCristal, Corangamite Catchment Management Authority Niilo Gobius, Northern Gulf Resource Management Group Noel Ainsworth, SEQ Catchments Pam Green, Southern Rivers Catchment Management Authority Paua Steyer, Wentworth Group of Concerned Scientists Peter Cosier, Wentworth Group of Concerned Scientists Peter Greig, Chair of Technical Accounting Committee Phil Tickle, CRC for Spatial Information Rebecca Kelly, NRM North Richard Davis, Wentworth Group of Concerned Scientists Richard Thackway, VAST Transformations Rob Purves, Wentworth Group of Concerned Scientists Rob Sturgiss, Department of Industry, Innovation, Climate Change, Science, Research and Tert Ed Ronnie Harding, Wentworth Group of Concerned Scientists Roxane Blackley, Queensland Murray Darling Committee Royce Bishop, Reef Catchments Shelley Spriggs, Northern Agricultural Catchments Council Simon Warner, SEQ Catchments Sophie Keen, Natural Resources Eyre Peninsula SA Department of Environment, Water and Natural Resources Terry Hillman, Wentworth Group of Concerned Scientists Tim Flannery, Wentworth Group of Concerned Scientists Tim Hoogwerf, Northern Gulf Resource Management Group Tim Stubbs, Wentworth Group of Concerned Scientists Tony Smith, CSIRO Tracey Macdonald, Central West Catchment Management Authority Warwick McDonald, Bureau of Meteorology



Notes and References 1 Wentworth Group of Concerned Scientists (2008). Accounting for Nature: A Model for Building the

National Environmental Accounts of Australia. http://www.wentworthgroup.org/blueprints. 2 Cosier P and J McDonald (2010). A Common Currency for Building Environmental (Ecosystem) Accounts,

Prepared for the 16th Meeting of the London Group on Environmental Accounting, Santiago, Chile, 25-‐28 October, 2010.

3 NRM Regions Australia (2013). Draft Regional Proof of Concept Accounts and Information Statements. Available at http://nrmregionsaustralia.com.au.

4 Millennium Ecosystem Assessment (2005). Ecosystems and Human Well-‐being: Synthesis, Island Press, Washington, DC.

5 United Nations, European Commission, Food and Agriculture Organisation, International Monetary Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework (white cover publication, pre-‐edited text subject to official editing), Section 2.2, para 2.23, p14. United Nations Statistical Division, New York.

6 United Nations, European Commission, Food and Agriculture Organisation, International Monetary Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework Section 5.1, para 5.2, p123.

7 Wentworth Group of Concerned Scientists (2008). Accounting for Nature: A Model for Building the National Environmental Accounts of Australia. http://www.wentworthgroup.org/blueprints

8 United Nations Conference on Environment and Development (UNCED) (1992). Agenda 21. Chapter 8. Rio Earth Summit.

9 For a description of degradation see United Nations, European Commission, Food and Agriculture Organisation, International Monetary Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework section 5.4.2, para 5.90, 5.91 and 5.92, p137.

10 United Nations, European Commission, Food and Agriculture Organisation, International Monetary Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework.

11 Convention on Biological Diversity (2010). Strategic Plan 2011-‐2020. Prepared in response to decision X/2, the tenth meeting of the Conference of the Parties, held from 18 to 29 October 2010, in Nagoya, Aichi Prefecture, Japan. http://www.cbd.int/sp/.

12 GHD (2012). Review of Regional Natural Resource Management Plans. Final Report prepared for the National NRM Working Group.

13 Murray–Darling Basin Authority (2011). Sustainable Rivers Audit 2: The ecological health of rivers in the Murray–Darling Basin at the end of the Millennium Drought (2008–2010). www.mdba.gov.au

14 For example, the Australian government’s Natural Heritage Trust, Caring for Our Country and National Landcare Programs.

15 Eigenraam, M., Chua, J. & Hasker, J. (2013). Environmental-‐Economic Accounting: Victorian Experimental Ecosystem Accounts, Version 1.0. Department of Sustainability and Environment, Victoria.

16 State of the Environment Committee (2011). Australia State of the Environment 2011. Independent report to the Australian Government Minister for Sustainability, Environment, Water, Population and Communities. Canberra: DSEWPaC, 2011.

17 NRM Regions Australia (2011). Australian Regional Environmental Accounts Trial 2011: Draft Guidelines for Constructing Regional Environmental Accounts.

18 Modified from NRM Regions Australia (2011) Australian Regional Environmental Accounts Trial 2011: Draft Guidelines for Constructing Regional Environmental Accounts for consistency with the SEEA Central Framework.



19 United Nations, European Commission, Food and Agriculture Organisation, International Monetary

Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework. Section 2.2, para 2.17 p13.

20 European Commission, Organisation for Economic Co-‐operation and Development, United Nations, World Bank (2013). System of Environmental-‐Economic Accounting Experimental Ecosystem Accounting. Section 5.6.6, para 5.316, p172.

21 CSIRO (2001). Natural assets: An Inventory of Ecosystem goods and services in the Goulburn Broken Catchment. p5.

22 United Nations, European Commission, Food and Agriculture Organisation, International Monetary Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework. Reference to the extent and quality of the soil asset para 5.160 p147, and paras 5.332 and 5.341 (Table 5.7.1), p174.

23 Cosier P and J McDonald (2010). A Common Currency for Building Environmental (Ecosystem) Accounts. 24 Cosier P and J McDonald (2010). A Common Currency for Building Environmental (Ecosystem) Accounts. 25 NRM Regions Australia (2011). Australian Regional Environmental Accounts Trial 2011: Draft Guidelines

for Constructing Regional Environmental Accounts. 26 European Commission, Organisation for Economic Co-‐operation and Development, United Nations,

World Bank (2013). System of Environmental-‐Economic Accounting Experimental Ecosystem Accounting. section 4.2.1, Para 4.11, p76.

27 NRM Regions Australia (2011). Australian Regional Environmental Accounts Trial 2011: Draft Guidelines for Constructing Regional Environmental Accounts.

28 United Nations, European Commission, Food and Agriculture Organisation, International Monetary Fund, Organisation of Economic Co-‐operation and Development, World Bank (2012). System of Environmental-‐Economic Accounting: Central Framework Section 5.4.2, para 5.92, p138.

29 Eigenraam, M., Chua, J., Hasker, J., (2012) Land based ecosystem services: measurement and accounting in practice. United National Expert Meeting on Ecosystem Accounts, Melbourne, Australia.

30 McIntosh E, et al (2013). Constructing a Native Vegetation Condition Account. Technical Paper #1: Australian Regional Environmental Accounts Trials. In preparation.

31 Thackway, R (2012) Transformation of Australia's vegetated Landscapes, Wooroonooran Nature Refuge, QLD. ACEAS. doi:10.4227/05/5088E97873585.http://dx.doi.org/10.4227/05/5088E97873585

32 Healthy Waterways (2012). Report Card for the waterways and catchments of South East Queensland. 33 Namoi CMA (2012). Namoi Catchment Action Plan 2010-‐2020. http://www.nrc.nsw.gov.au 34 Marsden Jacob Associates (2011). Future of our Bay: The business case for managing and enhancing

South East Queensland’s waterways (2012 -‐ 2015). Prepared for the QLD Department of Environment and Resource Management.

35 BMT WMB (2011) in Marsden Jacob Associates (2011). Future of our Bay: The business case for managing and enhancing South East Queensland’s waterways (2012 -‐ 2015).

36 Marsden Jacob Associates (2011). Future of our Bay: The business case for managing and enhancing South East Queensland’s waterways (2012 -‐ 2015).

37 MainStream Economics and Policy (2011). Sharing the load: A collaborative approach to investing in South East Queensland’s waterways. Table 9, p35.

38 MainStream Economics and Policy (2011). Sharing the load: A collaborative approach to investing in South East Queensland’s waterways.

39 United Nations (1992) Rio Declaration on Environment and Development, Annex 1. Rio de Janeiro, Brazil. 3-‐14 June 1992. A/CONF.151/26 (Vol. 1).

40 Wentworth Group of Concerned Scientists (2008) Accounting for Nature: A Model for Building the National Environmental Accounts of Australia. http://www.wentworthgroup.org/blueprints

initial observations from the australian regional environmental asset condition accounts trials

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