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Written on 24 May 2021

Why policymakers need to learn about Natural Capital Accounting

UN DESA launches new e-learning module on environmental economic accounting including research by Bennett Institute economists.

The United Nations Department of Economic and Social Affairs (UN DESA) has launched a new e-learning module for policymakers on the use of natural capital accounts, aiming to embed consideration of natural resources in economic policy decision.

UN Secretary-General António Guterres welcomed the adoption of the new SEEA-Ecosystem Accounting framework in March 2021. “This is a historic step forward towards transforming how we view and value nature.  We will no longer be heedlessly allowing environmental destruction and degradation to be considered economic progress.”

Developed in collaboration with global experts including Bennett Institute researchers, the new course provides an overview of the applications of the System of Environmental-Economic Accounting (SEEA) and how this approach to measurement can be used for sustainable policy decisions. It includes modules on biodiversity, climate change and macroeconomic uses of the SEEA to inspire policymakers to look ‘beyond GDP’.

“This training complements the System of Environmental-Economic Accounting (SEEA) statistical publications but takes the perspective of the user community. It explains Natural Capital Accounting (NCA) and the SEEA in non-technical terms and why it's so essential that policymakers invest in and demand a multi-purpose system like the SEEA.  It will help statisticians to make the case for the SEEA and policy makers to understand how NCA help in policy and decision-making,” says Alessandra Alfieri, Chief, Environmental Economic Account Section, UN DESA.

One of the e-learning modules is based on a paper by Dr Matthew Agarwala and Dimitri Zengehlis, Bennett Institute, on Natural Capital Accounts for Sustainable Macroeconomic Strategies. They describe the conceptual basis for focusing on wealth; introduce the role of the SEEA in the macroeconomic policy context; show how SEEA accounts can be used in practice; and explain how natural capital accounting metrics are likely to become key to the management of risks and opportunities facing investors.

Work on the papers implementing the SEEA included a live-streamed discussion between the University of Cambridge’s Diane Coyle, Bennett Professor of Public Policy and Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics, with Elliott Harris, UN Chief Economist, and Bert Kroese, Statistics Netherlands and Chair of the United Nations Committee of Experts on Environmental-Economic Accounting, in December on the importance of Building back better: Natural capital accounting for a green recovery. They called for the UN General Assembly to adopt the SEEA framework as a global standard for measuring how the natural world underpins national economies, which happened in March 2021.

“Natural capital is essential to support economic activity and generate wellbeing. Yet whereas we continue to invest in growing our stock of physical, human and knowledge capital, natural capital is perhaps the only global asset that is in decline worldwide. In the case of renewable natural capital—fish, forests, biodiversity and a safe climate—we are close to reaching irreversible thresholds from which stocks may never recover. This will have potentially catastrophic effects on livelihoods. Our ability to accurately measure and better manage the stock of natural capital will determine whether we prosper and thrive in the twenty-first century,” says Zenghelis.