Environmental and natural resource accounting has evolved since the 1970s through the efforts of individual countries and practitioners, each developing their own frameworks and methodologies to represent their environmental priorities. Since the late 1980s, a concerted effort has been under way through the United Nations Statistics Division, Eurostat, OECD, the World Bank, national statistical offices and other organizations to standardize the framework and methodologies. The United Nations published an interim handbook on environmental accounting in 1993 and has recently completed a substantial revision, the System of Integrated Economic and Environmental Accounting 2003 (UN, et al., 2003).
This chapter begins with an overview of environmental accounts and advantages of SEEA as a tool for environmental economic policy. The structure of forest accounts is then developed, based on a mapping of forest goods and services into the four basic components of environmental accounts. The extent to which each country has implemented each component of forest accounts is briefly reviewed and will be examined in greater detail in Chapter 3. The chapter closes with a discussion of the most important policy issues driving forest accounting and how each component of forest accounts is used to address these issues.
As satellite accounts, SEEA has a similar structure to SNA. SEEA consists of stocks and flows of environmental goods and services. It provides a set of aggregate indicators to monitor environmental-economic performance at the sectoral and macroeconomic level, as well as a detailed set of statistics to guide resource managers towards policy decisions that will improve environmental-economic performance in the future. The definition of environmental goods and services in SEEA is much broader than in SNA, in principle attempting to measure total economic value, not just market transactions.
SEEA has four major components:
SEEA includes both physical accounts and, to the extent possible, monetary accounts. Valuation of some non-market goods and services can be difficult. However, there are a number of widely used economic valuation techniques that may be applied.
There are two features that distinguish SEEA from other databases about the environment: 1) integration of environmental data with economic accounts, and 2) comprehensive treatment of all important natural resources, linking them with the economic sectors that rely on them, directly and indirectly, and those sectors that affect them.
In contrast to other environmental databases, the purpose of SEEA is to link environmental data directly to economic accounts. SEEA achieves this by sharing structure, definitions and classifications with SNA. The advantage of this approach is that it provides a tool to overcome the tendency to divide issues along disciplinary lines, in which analyses of economic and environmental issues are carried out independently of one another.
For issues such as forest management, the advantage of the SEEA approach is clear. It is not possible to promote sustainable forestry purely from the narrow perspective of managing forests; rather, an economy-wide approach is needed that can identify benefits that forests provide to other sectors as well as threats to forests from non-forestry policies. SEEA makes possible joint analysis of economic policies and their impact on all relevant environmental variables.
For all resources, policy analysis and decision-making take place on three relatively distinct levels: the local or production level, the sectoral or industry level and the macroeconomic (national) or regional level. The contribution of SEEA to policy analysis has been primarily at the sectoral and macroeconomic levels. At the macroeconomic level, SEEA is useful as a planning tool to coordinate policies across different line ministries and assess cross-sectoral impacts, weighing alternatives and trade-offs among sectors. National forest accounts are often constructed from accounts for individual regions or forests. The regional or forest-level accounts provide additional opportunities for forestry management at the regional level, an issue discussed in Chapter 3.
SEEA accounts for the value of non-marketed goods and ecosystem services of forests, which show how many non-forestry sectors benefit from forest ecosystems. This information is critical in developing cross-sectoral policy, as well as the cross-sectoral institutions and alliances necessary for implementing sustainable forestry. Such institutions would involve stakeholders from all sectors that benefit from forestry, such as rural development, tourism, agriculture, fisheries, municipal water supply and others. Even though agriculture is a main competitor with forests for land use in many countries, agriculture also relies on forest ecosystems in ways that are not often included in policy analysis, such as watershed protection. Systematic accounting for forest inputs to agriculture will show what agriculture and others have to gain from forest conservation.
Forest accounts provide both improved forestry indicators as well as detailed statistics that can be used for improved management of forestry. Management applications include, for example, the assessment of trade-offs among competing forest users, the design of economic policy instruments (e.g. property rights, taxes and subsidies, creation of markets for non-market forest services, etc.) and modelling the economy-wide impact of non-forestry policies.
For cross-sectoral policy, forest managers need to establish the socio-economic contributions of forests in relation to the rest of the economy and to evaluate the impact of non-forestry policies on forests. While data collected about the contribution of forests are important in their own right, they are also often necessary for the cost-benefit analyses and modelling required for evaluating changes in non-forestry policy. Forest accounts help address issues such as:
A. Establish a value closest to the true socio-economic value of forests in relation to the rest of the economy
What is the total economic contrib ution of forests and what are the benefits from sustainable forest management?
Forest accounts ensure that all forest benefits, market and non-market, are accounted for in a manner consistent with national accounts. By identifying all forest contributions, the potential losses from changes in forest use can be identified.
What is the distribution of forest benefits among different groups in society?
The accounts indicate the benefits that accrue to commercial (large scale and artisanal) and subsistence forest users, direct and indirect beneficiaries. They can also distinguish local benefits from those that accrue to ‘downstream,’ non-local communities, including other beneficiaries in a watershed (e.g. hydroelectric power, municipalities, fisheries) and the global community (e.g. biodiversity and carbon storage). This information is necessary for optimizing forest management to achieve economic as well as social objectives (such as local community preservation or increased equity).
Is economic growth sustainable or is it based on the depletion of forests?
Forest accounts provide improved indicators of sustainability that include the full value of forest assets and the net cost of deforestation and land use change
B. Evaluate the impact of non-forestry policies
What are the trade-offs among competing users and how can forest utilization be optimized?
Optimization of infrastructure development, forestland use, assessment of trade-offs among competing users and the design of policy instruments can take into account total economic value of forests, market and non-market, including linkages to non-forestry sectors and impacts on all stakeholders.
What are the impacts of non-forestry policies on forest use?
Forest accounts provide detailed statistics that may be used in economy-wide models to anticipate impacts of non-forestry policies and design strategies for economic development that take into account all the goods and services, market and non-market, provided to all stakeholders.