National Accounting and the Valuation of Ecosystem Assets and Their Services

Carl Obst*, Lars Hein, Bram Edens

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

59 Citations (Scopus)

Abstract

There has long been interest in integrating the value of environmental stocks and flows into standard measures of economic activity and wealth, in particular through the development of adjusted measures of GDP and extended measures of national wealth. This paper examines how the valuation of ecosystem services and ecosystem assets can be undertaken in an integrated national accounting setting. We clarify the relevant valuation principles, most significantly the need to apply the concept of exchange values, and explain why the integration of ecosystem services necessitates an extension of the standard production boundary used in economic measurement. The main implications of an accounting approach are discussed including the need to distinguish benefits from services, the need for valuation methods that exclude consumer surplus, and the importance of aligning measures of income and degradation. Remaining challenges include the treatment of low or negative rents, accounting for ecosystem disservices, and the derivation of values for ecosystem assets. Meeting these challenges and advancing work in this area should be the joint focus of economists, ecologists and accountants.

Original languageEnglish
Pages (from-to)1-23
JournalEnvironmental and Resource Economics
Volume64
Issue number1
DOIs
Publication statusPublished - 2016

Keywords

  • Degradation
  • Ecosystem accounting
  • Ecosystem services
  • Green accounting
  • National accounts
  • Valuation

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