THE GLOBAL PARTNERSHIP ON
Wealth Accounting and the Valuation of Ecosystem Services
Technical Workshop on Tools and Measures
to Inform
Inclusive Green Economy Approaches
Beyond GDP Natural Capital Accounting for
Sustainable Development and Poverty
Eradication
Measuring and Managing Natural Resources for Development
John M. Matuszak
Agriculture and Environmental Services Department-SDN , World Bank
Sustainable Development and Wealth
We don’t judge a company solely on the basis of its income
statement—look at both income and balance sheet.
• Increasing assets (wealth) support long-term growth.
• In the short term, income can appear to grow by
liquidating assets, but this undermines long-term growth.
Why do we assess country economic progress on the basis
of national income, GDP alone? (J. Stiglitz, Nobel prize,
economics)
The source of income and well-being is wealth, broadly
defined to include
– Manufactured capital, Natural capital, ‘Intangible’ capital
(human capital and social capital)
Accounting for Natural Capital—
Are National Economic Accounts up to the Job?
Key information about natural capital is missing or
invisible in the System of National Accounts (GDP):
• Depletion of natural capital – minerals, forests
• Use of materials and energy not fully represented
• Environmental degradation – air & water pollution, loss of soil
productivity
• Ecosystem services – carbon storage, flood mitigation
Filling the information gap—SEEA, System of
Environmental and Economic Accounting
Why do Natural Capital Accounting ?
Better indicators for monitoring sustainable
development:
Wealth Accounting: is GDP growth sustainable or are we
just “living off our natural capital?”
Resource Productivity (water, energy, pollution)—
improving over time?
Better tools for managing natural capital to promote
growth and poverty reduction-- Detailed statistics to
• Designing development strategies that optimize scarce resources
• Weigh tradeoffs among competing users for water, forests, land use
• Prioritize investments in natural capital like water resources, protected
areas
• Impacts of resource pricing schemes; design sustainable financing
Where
Natural
Accounting
Where
has has
Natural
CapitalCapital
Accounting
been most been
useful?
most useful?
1. Indicators for monitoring sustainable development
2. Water accounting: managing a scarce resource
3. Energy and air pollution: cleaner, more efficient
production
4. Stocks of minerals & energy: fiscal rules, managing
mineral revenues for long term growth
5. Land and ecosystems: balancing the needs of
tourism, commercial and subsistence agriculture,
water supply, soil erosion, and other uses
WAVES Implementation and Funding
Partnership
• Core Implementing Country Partners: receiving substantial technical support from WAVES multidonor Trust Fund (5 countries so far)
• Contributing Donor Partners: UK, Japan, Norway, France, the Netherlands, Germany, EC, Denmark,
Switzerland
• Participating Partners: countries with other sources of funding who have endorsed the NCA
communique, UN & international organizations, NGOs, private sector, academics and others
Governance
• WAVES Secretariat and management in World Bank HQ
• Global Steering Committee: UNEP, UNDP, UNSD-UNCEEA, donors, WAVES-supported partner
countries
• Country work managed by National Steering Committees
2-phased approach
• 1-year preparation phase through June 2012
• 4-year implementation phase through 2016+
Funding
• $22 million hybrid MDTF, additional funds being raised for the ’50/50’ NCA campaign launched on the
basis of the Gaborone Declaration May 2012
What to expect from WAVES as
Participating Country Partners
• Regional training workshops to explain Natural Capital Accounting, how it can
be used to support decision-making, and the SEEA
• Diagnostic to assess readiness and priorities, and short term technical support
to assist countries implement the diagnostic paid for by WAVES Secretariat
• Training materials for Natural Capital Accounting including on-line resources
and e-learning courses (in preparation)
• Assistance in identifying resources for additional technical support through
WAVES Partnership, or programs of partners
• Join a global ‘community of practice’ to share experiences, report results,
learn from each other, and receive training on specialized topics
Current WAVES countries
Botswana:
Madagascar:
• work plan approved for water, minerals &
energy, land & tourism, indicators of
sustainability,
• first results on updated water accounts
presented to President at high-level economic
advisory council;
• work plan approved for minerals, forests &
protected areas, tourism, watershed pilot
accounts, mangroves, indicators of sustainability,
• work underway, mineral accounts expected end
of 2013, preliminary results for the rest of
accounts in 2014
Philippines:
Colombia:
• work plan approved for minerals,
mangroves, pilot land/ecosystem accounts
for 2 sites
• TORs being drafted for implementation
• work plan approved for watershed ecosystem
accounts for water, forests in 3 pilot
watersheds,
• TORs being drafted for implementation
Costa Rica:
• work plan for water and forests accounts
under final discussion
• water accounts under construction
How did the process work in Botswana?
• National Steering Committee, chaired by Ministry of Finance and
Development Planning
• 3 multi-stakeholder workshops on WAVES (July &Nov 2011, Jan
2012)
• Scoping out study commissioned,
• Policy priorities based on NDP10, EDD, other documents
• Review of data availability, gaps, lessons from earlier NRA
program
• Work plan adopted by Steering Committee, March 2012
• Presentation to BEAC (chaired by President), May 2012, endorsed
by BEAC
• Updated Water Accounts presented to BEAC, Nov 2012
• Country Coordinator hired, sits in MFDP
Botswana: achieving growth-diversification-poverty reduction
Optimizing natural resource use is the key…
…but the necessary economic information is often incomplete or missing.
NCA supports environmental accounting to fill that information gap and
improve economic decision-making in 2 ways:
1. Information to Optimize use of Botswana’s Natural Capital
• Water accounts
• Mineral and Energy accounts
• Land/Ecosystem accounts & the role of tourism
2. New macroeconomic indicators: a new way of measuring economic
growth—beyond GDP—that takes Natural Capital into account
Botswana NCA Work plan
Objective
Description
1. Managing water
resources
Contribute to integrated water resources management, water
sector reforms, identify constraints to economic diversification
strategies and ways to overcome them
2. Minerals & Energy
Contribute to development of a new fiscal rule for mineral
revenues. Addressing electricity shortages and the development
of coal resources
3. Land & ecosystems
Contribute to dialogue on best use of land to support long term
growth, balance competing land uses: tourism (increase local
benefits), commercial agr, subsistence agr, other ecosystem
services
4. Macro-economic
indicators
New macro-economic indicators (ANS, ANNI and comprehensive
wealth) to guide sustainable development and new fiscal rule for
mineral revenues
5. Capacity Building
Technical training built into all components, participation in
WAVES regional & global training programmes
BOSTWANA
Are scarce water resources allocated efficiently?
% share in GDP, employment & water use, 2011
50%
45%
40%
35%
30%
25%
20%
% of GDP
15%
% of formal employment
10%
% of water consumption
5%
0%
Source: DWA
Resource-rich economies: managing rents from
minerals and energy
• transform non-renewable resources into
other forms of capital
Natural resource rents –a major source of
income
(% of GDP, 2012
20
18
16
Percent of GDP
14
12
10
8
6
4
2
0
World
East Asia
E. Europe and
Central Asia
Latin America
Middle east/N.
Africa
South Asia
Subsaharan Africa
Indicators: Measuring country
sustainability through changes in wealth—
• Adjusted Net Savings
• ANS measures gross saving
adjusted for
• Depreciation of fixed capital
• Human capital investment,
• Resource depletion
• Pollution damages
System of Environmental-Economic Accounting
(SEEA)
• Agreed by the UN Statistical Commission 2012
•
•
•
The System of Environmental-Economic Accounting (SEEA) contains the
internationally agreed standard concepts, definitions, classifications, accounting
rules and tables for producing internationally comparable statistics on the
environment and its relationship with the economy.
The SEEA framework follows a similar accounting structure as the System of
National Accounts (SNA) and uses concepts, definitions and classifications
consistent with the SNA in order to facilitate the integration of environmental and
economic statistics.
The revised SEEA consists of three parts:
–
–
–
the Central Framework, which was adopted by the UN Statistical Commission as the first
international standard for environmental-economic accounting;
Experimental Ecosystem Accounting and Applications and Extensions of the SEEA.
Subsystems of the SEEA framework elaborate on specific resources or sectors, including: Energy,
Water, Fisheries, Land and Ecosystems, and Agriculture.
What is SEEA-Water?
• Analytical framework that provides information about the interactions
between the economy and water resources
• SEEA-Water is a subsystem of the System of Environmental-Economic
Accounting (SEEA), coherent with System of National Accounts (SNA)
• International Recommendations for Water Statistics (IRWS) designed to
assist countries in the implementation of SEEA-Water. Considered an
Interim Statistical standard (2007)
• Provides key indicators to respond to different policy demands. They are
comprehensive, consistent and comparable through time and space.
Structure of the accounts
1. Physical water supply and use tables (Chapter 3)
– Information of volumes of water exchanges between
economy and environment and within econony
– Improving water efficiency
2. Emission accounts (Chapter 4)
– Information on amounts of pollutants added to waste water as
result of economic activities
3. Hybrid supply and use tables (Chapter 5)
– Information on the economy of water in monetary terms
4. Asset accounts (Chapter 6)
– Information on physical stocks of water
What Do Policy-Makers Need from Water
Accounts?
Economic information to make decisions:
•
Allocation of water, water infrastructure among
competing users:
• economic users and water productivity
• ecological requirements
• international requirements for shared water resources
•
Water pricing and economic instruments:
•
Managing water pollution: sources, costs & benefits of reducing
•
Coordinating policy in related sectors: agriculture, rural
development, tourism, etc.
•
Planning for future water requirements, water demand
mgmt.
• Variation of water delivery costs/scarcity by region
• Impact of water tariffs on different industries and different social
groups, especially the poor
pollution
Water issues and policy objectives:
A broad grouping
Policy objectives
•
•
Limited access
Unequal distribution
I. Improving water
supply and sanitation
services
II. Managing water
supply and demand
Water
security
•
Reduced quality and
pollution
Allocating water among
competing users:
contribution to GDP,
employment, social
wellbeing
•
III. Improving the state of
the environment and
water resources
Adapting to extreme
hydro-meteorological
events
Managing for
increased
floods/droughts
NETHERLANDS
Water issues
NETHERLANDS: Policy demands
• Main users:
–
–
–
–
Ministry of infrastructure and environment,
water boards,
water companies,
Eurostat, other etc.
• European Union Water Framework Directive
• Marine Strategy Framework Directive
– Initial Assessment asks for ‘Economic analysis of marine waters’
• Climate change policies  expenditure for climate change
mitigation / adaptation
• Indicators for green growth
NETHERLANDS
Is there decoupling between water use and economic growth ?
Volume change GDP, employment and tap water used for production
Source: CBS
NETHERLANDS
Water Profiles: What are the most important users of water?
Is their water productivity improving between 2003 and 2010?
(liter/ euro of sector value-added)
Source: CBS
NETHERLANDS
Are there regional differences in emission intensity ?
Emission-intensity per river basin (only producers)
heavy metal equivalents
per million euro
nutrient equivalents per
million euro
0.35
70
0.30
60
0.25
50
0.20
40
0.15
30
0.10
20
0.05
10
0
0.00
Ems
Source: CBS
Meuse
Rhine Central Rhine North
Emission of heavy metals (left axis)
Rhine East
Rhine West
Emission of nutrients (right axis)
Scheldt
Australia:
Increasing water efficiency by sector, 2004 & 2008
14000
12000
10000
8000
6000
4000
2000
0
2004-05
Ho
us
eh
ol
d
try
th
er
ind
us
Percentage change 2004-05 to 2008-09
O
up
pl
y
W
at
er
s
El
ec
tri
ci t
y
M
an
uf
ac
tu
r
in
g
2008-09
M
in
ing
Ag
ri c
ul
tu
re
ML (1,000 m3)
Water consumption
-30%
-20%
-10%
Household
Other industry
Source: ABS
Water supply
Electricity
Manufacturing
Mining
Agriculture
0%
10%
20%
30%
40%
AUSTRALIA:
Who uses water and who pays for water?
Monetary vs. physical use of distributed water in key
sectors, 2008-9 (Australia)
Agriculture
Mining
Volume of water
Manufacturing
Water tariff paid
All other Industries
Households
Source: ABS
0%
10%
20%
30%
40%
50%
60%
BOSTWANA
Are scarce water resources allocated efficiently?
% share in GDP, employment & water use, 2011
50%
45%
40%
35%
30%
25%
20%
% of GDP
15%
% of formal employment
10%
% of water consumption
5%
0%
Source: DWA
International Trade & Water Use
Are water-scarce countries exporting water?
How does export promotion drive water demand in
Namibia, Botswana and South Africa?
How much can ‘virtual water’ in imports reduce
pressure on water demand?
Exports in these countries are dependent on
primary & processed primary commodities
especially agriculture, mining--water intensive
products
Water intensity of trade
(m3 per 1000 rands of imports or exports)
m3 water per 1000 rands
25
20
15
Exports
Imports
10
5
0
Botswana
Namibia
South Africa
South Africa is net exporter not only because volume of exports > imports, but also
because water intensity of exports > imports.
COLOMBIA
Identifying main water users
Water use by sector, 2009
Basic metal products (except…
Non-metallic mineral products
Rubber and plastic
Chemicals and chemical products
Products of petroleum refining,…
Publishing, printing and the like
Paper products, cardboard and products
Products of wood, cork, straw and…
Tanning and prepared leathers,…
Knitted and crocheted fabrics,…
Textile articles, except apparel
Yarn and thread, textile fabrics,…
Snuff products
beverages
Foodstuffs n.c.p.
Cocoa, chocolate and sugar…
Sugar and panela
Coffee products and threshing
Grain mill products, starches and…
milk products
Oils and animal and vegetable fats
Meat and fish
0
10
20
30
40
50
Million m3
60
70
80
GUATEMALA
Is water supply enough to population’s demands?
Population density, 2005
Water scarcity index, 2005 (rainy season)
Water scarcity index, 2005 (dry season)
Where to get started?
•
•
Policy
•
•
Who are the
stakeholders and
how can they
interact?
Who will lead the
process?
•
What are the main water issues?
What is the legal framework and
policies in place?
How can policy be better informed?
•
Institutions
Data
•
•
What are the relevant
components of water
accounts?
What are the data
needs, availability and
gaps?
What are the users
and producers?
Institutional arrangements
Stakeholders
Arrangements
•
•
•
National statistical offices
Government agencies (at the national,
state/provincial or local levels) responsible for:
–
–
–
–
–
–
–
–
–
•
•
•
Water
Meteorology and hydrology
Agriculture
Environment (including environment protection
authorities)
Energy (especially where there is significant use of
hydropower)
Central planning
Finance (or central banks)
Geology or geological survey
Land use and land planning
Water suppliers and sewerage service providers
(government and non-government)
Water research organizations (e.g., government
agencies, universities)
Non-governmental organizations (e.g., water
industry associations, farmer associations)
•
•
•
•
•
Responsibilities for water management
and water statistics are often divided by
economic activity (agriculture, energy,
etc.)
Official roles and responsibilities of the
agencies involved in water
management and the production of
water statistics vary between countries
The coordination mechanisms should
include regular meetings of
stakeholders.
an agency needs to take the lead in
water statistics.
However, in some countries there may
be no single lead agency but rather
several agencies
taking leadership in different areas of
water statistics or at different times
Data needs and issues
• Sometimes agencies are unwilling to share data because they fear it will
reveal information that may be used unfairly against them, or that it will
expose data gaps and deficiencies for which they could be criticized.
• Because of sensitivities about data confidentiality, arrangements need to
be formalized, usually by data-sharing agreements. Data-sharing
agreements should clearly define procedures for requesting, sharing and
attributing data.
• Sharing data between agencies has many benefits.
– For the collectors, cost may be eliminated or reduced compared to the cost of
initiating a new data collection, if the information can be obtained from existing
data sources.
– It eliminates the possibility of conflicting data being produced, and can reduce the
burden (i.e., data are collected only once and used by multiple agencies) of
respondents, in this case the establishments or households that are reporting the
data.
• Water statistics confidentiality can present a problem for the water supply
and sewerage industries (ISIC, Rev. 4, divs. 36 and 37), because in some
countries there are very few establishments engaged in these activities.
How to join WAVES, the ’50-50’ NCA
Initiative
Ministerial-level communication (email) expressing interest in
joining sent to:
World Bank Country Office
Glenn-Marie Lange (glange1@worldbank.org)
Yuvan Beejadhur (ybeejadhur@worldbank.org)
Thank you!
http://www.wavespartnership.org/waves/