System of Environmental Economic Accounts

SEEAThe measurement framework for the environment and its interactions with the economy

Peter HarperChair UNCEEA

Deputy Australian StatisticianAustralian Bureau of Statistics

What do we care about?… and do our targets reflect this?

‘What we measure affects what we do; and if our measurements are flawed, decisions may be distorted. Choices between promoting GDP and protecting the environment may be false choices once environmental degradation is appropriately included in our measurement of economic performance. So too, we often draw inferences about what are good policies by looking at what policies have promoted economic growth; but if our metrics of performance are flawed, so too may be the inferences that we draw.’

Stiglitz et al

‘A country could exhaust its mineral resources, cut down its forests, erode its soil, pollute its aquifers, and hunt its wildlife to extinction, but measured income would not be affected as these assets disappeared.’

Repetto et al `

Information

Data users

Audiences for information… Indicators and Accounts

Data items

SEEAStandard tables

Supplementary tables

Indicators

Decision makers & wider public

Managers and analysts

Researchers

Yes

Analysis

Research

Advice

Headline indicators

Indicators on specific subjects or industries

Is there an issue?

Information is vital…and it needs to be integrated

• The economy impacts on the environment and the environment impacts on the economy

• To understand these linkages we need to integrate environmental and economic information

• This is the explicit purpose of the SEEA framework

Problem: Information silos

Data developed to answer one particular question or problem

Difficult to figure out if all information is included

Not always easy to see the whole picture, or how it relates to other things

Solution: Integrated information

Help to make sense of the larger picture

Help to identify pieces that are missing

Can make connections to other statistics - especially economic statistics

Linking environmental and socio-economic data is essential for policymakers

• enables analysis of the impact of economic policies on the environment and vice versa

• provides a quantitative basis for policy design• identifies the socio-economic drivers, pressures, impacts and

responses affecting the environment• supports greater precision for environmental regulations and

resource management strategies• provides indicators that express the relationships between the

environment and the economy

Biophysical

Socio-economic

DPSIR framework

Using a standard is very important…

• Organising information within the SEEA framework ensures– Consistency (with existing standards eg SNA) – Completeness (no gaps, or at least known gaps)– Comparability (across time and space)– Accountability (industry, governments, h/holds)

The SEEA standardDeveloped by UNSD, NSOs, Eurostat, OECD, IMF, World Bank

1993 Handbook – satellite to SNA 2003 Updated SEEA handbook – manual of best practices2006 UNSC decided to elevate SEEA to an international standard

2012 SEEA – The Central Framework Chapter 1 – IntroductionChapter 2 – Accounting structureChapter 3 – Physical supply and use Chapter 4 – Monetary transactionsChapter 5 – Asset accountsChapter 6 – Sequence of accounts, aggregates and indicators

2013 SEEA – Experimental Ecosystem Accounts 2013 SEEA – Applications and Policy Uses

Subsystems: SEEA-Water, SEEA-Energy, SEEA-Material flows (MFA), SEEA-Agriculture

The SEEA central framework incorporates four types of accounts.

1. Flow accounts: supply and use tables for products, natural resources, ecosystem inputs and residuals or wastes from economic activities. – physical (e.g. GL of water) and/or monetary values

2. Stock accounts for environmental assets: natural resources, land and ecosystems. – physical and/or monetary values

3. Activity / purpose accounts that explicitly identify environmental transactions already existing in the SNA. – e.g. Environmental Protection Expenditure (EPE) accounts

4. Environmentally adjusted accounts that adjust SNA economic accounts to reflect the impact of economic activity on the environment.– e.g. for environmental depletion and degradation

Ecosystem servicesEcosystem services are “fundamental life-support services upon which human civilization depends”, and can be direct or indirect. Broad examples include:• Regulating (climate, floods, nutrient balance, water filtration)• Provisioning (food, medicine, fur, minerals)• Cultural (science, spiritual, ceremonial, recreation, aesthetic)• Supporting (nutrient cycling, photosynthesis, soil formation)

Take home messages…1. Integrating environmental and economic information

is vital for informed, sophisticated decision-making2. SEEA is an internationally recognised standard

explicitly designed for this purpose3. SEEA is an accounting standard, not an ideology4. SEEA enables a wide range of issues to be studied,

including sustainability, well-being and green growth