From COVID-19 to Green Recovery with natural capital accounting.

The COVID-19 pandemic and related social and economic emergencies induced massive public spending and increased global debt. Economic recovery is now an opportunity to rebuild natural capital alongside financial, physical, social and human capital, for long-term societal benefit. Yet, current decision-making is dominated by economic imperatives and information systems that do not consider society's dependence on natural capital and the ecosystem services it provides. New international standards for natural capital accounting (NCA) are now available to integrate environmental information into government decision-making. By revealing the effects of policies that influence natural capital, NCA supports identification, implementation and monitoring of Green Recovery pathways, including where environment and economy are most positively interlinked.

Evaluating nature-based solutions for climate mitigation and conservation requires comprehensive carbon accounting.

Nature-based solutions (NbS) can address climate change, biodiversity loss, human well-being and their interactions in an integrated way. A major barrier to achieving this is the lack of comprehensiveness in current carbon accounting which has focused on flows rather than stocks of carbon and led to perverse outcomes. We propose a new comprehensive approach to carbon accounting based on the whole carbon cycle, covering both stocks and flows, and linking changes due to human activities with responses in the biosphere and atmosphere. We identify enhancements to accounting, namely; inclusion of all carbon reservoirs, changes in their condition and stability, disaggregated flows, and coverage of all land areas. This comprehensive approach recognises that both carbon stocks (as storage) and carbon flows (as sequestration) contribute to the ecosystem service of global climate regulation. In contrast, current ecosystem services measurement and accounting commonly use only carbon sequestration measured as net flows, while greenhouse gas inventories use flows from sources to sinks. This flow-based accounting has incentivised planting and maintaining young forests with high carbon uptake rates, resulting, perversely, in failing to reveal the greater mitigation benefit from protecting larger, more stable and resilient carbon stocks in natural forests. We demonstrate the benefits of carbon storage and sequestration for climate mitigation, in theory as ecosystem services within an ecosystem accounting framework, and in practice using field data that reveals differences in results between accounting for stocks or flows. Our proposed holistic and comprehensive carbon accounting makes transparent the benefits, trade-offs and shortcomings of NbS actions for climate mitigation and sustainability outcomes. Adopting this approach is imperative for revision of ecosystem accounting systems under the System of Environmental-Economic Accounting and contributing to evidence-based decision-making for international conventions on climate (UNFCCC), biodiversity (CBD) and sustainability (SDGs).

Putting biodiversity into the national accounts: Creating a new paradigm for economic decisions.

Economics has long taken precedence over the environment in both governmental and business decision making, with the System of National Accounts and the indicator GDP coming to represent much that is wrong with the current environmental conditions. Increasing recognition of the environmental damage human activity causes and that human well-being depends on biodiversity and ecosystems means that new systems to measure and sustainably manage the world are needed. Integrating the environment into national accounts has been suggested as a way to improve information but so far impact on decision making is limited. This outlook needs to change. Using examples from Australia and Botswana, we show how integrating information on biodiversity, resource use and the economy via accounting can help create a new decision-making paradigm and enable a new policy framing with spending on biodiversity conservation and sustainability seen as an investment, not a cost.

Soil natural capital in europe; a framework for state and change assessment.

Soils underpin our existence through food production and represent the largest terrestrial carbon store. Understanding soil state-and-change in response to climate and land use change is a major challenge. Our aim is to bridge the science-policy interface by developing a natural capital accounting structure for soil, for example, attempting a mass balance between soil erosion and production, which indicates that barren land, and woody crop areas are most vulnerable to potential soil loss. We test out our approach using earth observation, modelling and ground based sample data from the European Union's Land Use/Cover Area frame statistical Survey (LUCAS) soil monitoring program. Using land cover change data for 2000-2012 we are able to identify land covers susceptible to change, and the soil resources most at risk. Tree covered soils are associated with the highest carbon stocks, and are on the increase, while areas of arable crops are declining, but artificial surfaces are increasing. The framework developed offers a substantial step forward, demonstrating the development of biophysical soil accounts that can be used in wider socio-economic and policy assessment; initiating the development of an integrated soil monitoring approach called for by the United Nations Intergovernmental Technical Panel on Soils.

Defining Ecosystem Assets for Natural Capital Accounting.

In natural capital accounting, ecosystems are assets that provide ecosystem services to people. Assets can be measured using both physical and monetary units. In the international System of Environmental-Economic Accounting, ecosystem assets are generally valued on the basis of the net present value of the expected flow of ecosystem services. In this paper we argue that several additional conceptualisations of ecosystem assets are needed to understand ecosystems as assets, in support of ecosystem assessments, ecosystem accounting and ecosystem management. In particular, we define ecosystems' capacity and capability to supply ecosystem services, as well as the potential supply of ecosystem services. Capacity relates to sustainable use levels of multiple ecosystem services, capability involves prioritising the use of one ecosystem service over a basket of services, and potential supply considers the ability of ecosystems to generate services regardless of demand for these services. We ground our definitions in the ecosystem services and accounting literature, and illustrate and compare the concepts of flow, capacity, capability, and potential supply with a range of conceptual and real-world examples drawn from case studies in Europe and North America. Our paper contributes to the development of measurement frameworks for natural capital to support environmental accounting and other assessment frameworks.