Our wealth as a nation and our individual well-being depend critically upon the environment. It provides us with food, water and air and contributes to economic activity and human life by providing the minerals and raw materials - such as fossil fuels, timber and fish - for our industry and consumption. It also provides other critical ecosystem services such as recreation and comfort, improved local air quality and green spaces.
There are growing concerns that the current patterns and practices of economic activity are depleting and degrading the available environmental assets more quickly than they can regenerate themselves.
The Government’s 2011 White Paper on the Natural Environment, The Natural Choice, committed the UK to growing a green economy in which the benefits of nature are more clearly recognised. From rivers and marine habits to farmland and woodland, natural assets are part of the nation’s wealth. The Government and the Office for National Statistics have since begun working together to capture the value of these assets in the nation’s balance sheet.
By allocating a monetary value to natural assets and services, the Government will be better able to: assess levels of, and changes in, the natural wealth of our economy; identify the value of nature compared to conventional economic activities; develop policies that maintain and enhance the value of nature; help to prioritise certain habitats and target funding; and influence international and developing countries’ efforts to implement natural capital accounting.
Developing new Environmental Accounts to measure value
The UK Environmental Accounts are satellite accounts to the main UK National Accounts, and provide statistics on the impact economic activity has on the environment. They include natural asset accounts (e.g. oil and gas reserves, forestry and land), physical flow accounts (e.g. greenhouse gas emissions, air pollutants, energy consumption and consumption of raw materials) and monetary accounts (e.g. environmental taxes and environmental protection expenditure).
Now, on the back of the White Paper and a roadmap (786.5 Kb Pdf) published by ONS, the creation and development of natural capital accounts within the UK Environmental Accounts is underway. Three accounts, in particular, have been identified as a priority:
1. Fast-track work to improve the estimates of natural capital already published by the United Nations and World Bank within comprehensive wealth.
2. Cross-cutting accounts for widespread natural assets such as land, carbon and water.
3. Selective ecosystem accounts loosely built around the eight broad habitats covered by the National Ecosystem Assessment, but with a recognition that in practice it may be necessary to focus on particular elements within the broad habitat category (such as wetlands within the open water/wetlands/floodplain category).
ONS’s roadmap lays out the plans for developing each of these new accounts. It was produced in association with the Department for Environment, Food and Rural Affairs and in consultation with the Natural Capital Committee.
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