The third in our series of blogs by DR CATHERINE FARRELL on the background of the INCASE project outlines the role of the System of Environmental Economic Accounting method globally and the steps to its premlinary application in Ireland.
Natural Capital Accounting (NCA) has been widely adopted globally, specifically the SEEA method. The System of Environmental-Economic Accounting (SEEA) is a statistical system that brings together economic and environmental information into a common framework to measure the contribution of the environment to the economy, and the impact of the economy on the environment.
The SEEA contains an internationally agreed set of standard concepts, definitions, classifications, accounting rules and tables to produce internationally comparable statistics. The SEEA is essentially the main method used in Natural Capital Accounting globally, having three components –
The SEEA Central Framework (2012), which was adopted by the UN Statistical Commission as the first international standard for environmental-economic accounting in 2012.
The SEEA Experimental Ecosystem Accounting, which offers a synthesis of current knowledge in ecosystem accounting.
The SEEA Applications and Extensions, which illustrates to compilers and users of SEEA Central Framework based accounts how the information can be used in decision making, policy review and formulation, analysis and research.
Presently more than 80 countries worldwide have adopted the SEEA approach, with the SEEA-CF (Central Framework) in mainstream use and SEEA-EEA (Experimental Ecosystem Accounting) gathering wider use as the method is refined and becomes normalised. More of the applications and uses of the SEEA here.
In the EU, NCA has been well-developed in the UK and the Netherlands in the period 2010-2020, with work progressing under the EU KIP-INCA, MAES and MAIA (Mapping and Assessment for Integrated ecosystem Accounting) projects. Discussions at Eurostat are ongoing as to how NCA will be implemented across the European Union, and this is largely being informed by these projects, each of which are developing the best way to apply the SEEA methodology at national level. INCASE will link in with this network of EU projects to assist in developing clear and relevant approaches across the EU.
While work is ongoing globally in relation to NCA, Ireland has taken preliminary steps, though a clear strategy on how to apply NCA either at local or national scale is lacking, despite the policy drivers and frequent use of the term Natural Capital in governmental publications (National Planning Framework; Green Economy Initiative), policy documents and reports (SDG Voluntary Reporting) as well as EPA publications.
The INCASE Project will build on the work carried out on aspects of NCA and related topics to date in Ireland, bringing it together under the NCA framework, using the SEEA methodology. This will help to develop the best way forward for NCA in Ireland, and therefore avoid ad hoc staggered steps which may otherwise be unproductive. The SEEA-EEA will be extended to account for ecosystems, geosystems and atmospheric systems, testing the approach in four catchments before scaling up to national level. Essentially INCASE will serve to trouble shoot the approach at pilot scale while also determining the most effective and efficient way to classify assets, measure condition, identify flows of services and identify benefits and beneficiaries.
The work to date by the INCASE Project Team has established that developing natural capital accounts at catchment and national scale is feasible. Critical steps include a review and assessment of the wide array and quality of data available in terms of outlining the basic requirements for NCA in Ireland and potential data gaps. Establishing the process steps to gather, collate, assess and align these data in a standardised way is a key output of INCASE. Determining how available data can be used for various accounts will follow from the data review.
The project will establish the necessary ‘learning by doing’ platform and framework from which NCA can be implemented using the SEEA methods at catchment scale, and inform the basis for national scale NCA, either during or beyond the lifetime of the INCASE project as set out in national and EU targets. A number of challenges will be addressed, in terms of high-level concepts about NCA and how it can align with (replace?) GDP to develop truer reflections of prosperity, valuation, the efficacy of the approach in general and basic aspects such as data share and data quality.
You can discover more in our INCASE Feasibility Report.
READ Pt1/4 in our Sustainable Development series: how natural capital accounting can be used as a tool to track pressures and identify solutions in working towards sustainable development in Ireland.
READ Pt2/4 highlighting policy drivers for Natural Capital Accounting, from both an EU/global and national perspective.