UN adopts landmark framework to integrate natural capital in economic reporting
The United Nations has adopted a new framework that includes the contributions of nature when measuring economic prosperity and human well-being.
In a move that may reshape decision and policy-making towards sustainable development, the United Nations has adopted a new framework that includes the contributions of nature when measuring economic prosperity and human well-being.
The new framework — the System of Environmental-Economic Accounting—Ecosystem Accounting (SEEA EA) — was adopted by the UN Statistical Commission and marks a major step forward that goes beyond the commonly used statistic of gross domestic product (GDP) that has dominated economic reporting since the end of World War II. This measure would ensure that natural capital—forests, wetlands and other ecosystems—are recognized in economic reporting.
Experts emphasize that while a statistic such as GDP does a good job of showing the value of goods and services exchanged in markets, it does not reflect the dependency of the economy on nature, nor its impacts on nature, such as the deterioration of water quality or the loss of a forest.
UN Secretary-General António Guterres welcomed the adoption of the new economic and environmental framework. “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.”
The new framework can also underpin decision-making at two crucial conferences later this year—COP15 on Biodiversity in Kunming and the Glasgow Climate Conference, COP 26.
According to a new UNEP report, “Making Peace with Nature,” the global economy has grown nearly fivefold over the last 50 years, largely due to a tripling in extraction of natural resources and energy that has fuelled growth in production and consumption. Over the same time, the world population has increased by a factor of two, to 7.8 billion people, and though on average prosperity has also doubled, about 1.3 billion people still live in poverty and some 700 million are hungry.
“This is a major step forward,” said Inger Andersen, UNEP Executive Director. “The new framework can be a game changer in decision-making. By highlighting the contribution of nature, we now have a tool that allows us to properly view and value nature. It can help us bring about a rapid and lasting shift toward sustainability for both people and the environment.”
The new framework recognizes that ecosystems deliver important services that generate benefits for people. In essence, they are assets to be maintained, similar to economic assets. For example, forests play a role in providing communities with clean water, serving as natural water filters with trees, plants and other characteristics, such as soil depth, that help absorb nutrient pollution like nitrogen and phosphorous before it can ﬂow into streams, rivers and lakes.
More than 34 countries are compiling ecosystem accounts on an experimental basis. With the adoption of the new accounting recommendations, many more countries are expected to begin implementing the system, though a significant number of countries will require assistance and additional resources for statistical data collection.
Information on the new framework can be found here.