Ecosystem Accounts
An ecosystem is a community of plants, animals (including people), and microorganisms interacting with one another and their non-living environment. Healthy ecosystems improve our wellbeing and contribute to our economy. This contribution is not always clear – and can be invisible to decision-makers.
Ecosystem accounts track how changes in the environment affect our wellbeing and economy. They build on land accounts to give us the next level of detail. For example, a land account can show changes in forest cover while an ecosystem account can describe the condition of the remaining forest and the effects on local communities. Ecosystem accounts are a reliable way for economic policy to include the value of the natural environment.
Ecosystem accounting is in the early stages of development in Australia and internationally. The United Nations adopted the standard for ecosystem accounting in March 2021.
See also
Our work to develop ecosystem accounts
We support research to develop ecosystem accounts for policy applications.
The feasibility of Australia’s first national ecosystem account for the coastal marine environment, focusing on blue carbon ecosystems, is currently being assessed. See National Ocean Ecosystem Account.
What ecosystem accounts offer
Describe how the economy and environment are interacting over time.
Measure the private and public benefits of an investment.
Assess costs and benefits to understand which policy creates the greatest public benefit.
Assess environmental impacts to understand the best location for a development.
Analyse the relationship between environmental change and productivity to separate or ‘decouple’ productivity from harm.
How ecosystem accounts work
The four ‘building blocks’ of ecosystem accounts are:
- stocks of ecosystem assets
- the condition or ‘health’ of the assets
- the flows of goods and services from the assets
- the value of the benefits from the goods and services.
An ecosystem asset is a space that contains a specific type of ecosystem.
The benefits people receive from the environment depend on the type, size and health of ecosystem assets. Ecosystem accounts can also estimate the value of ecosystem assets directly.
Useful accounts require detailed data.
How ecosystem accounts can be used
Ecosystem accounts can be used by anyone who is interested in communicating or analysing change in complex systems where there is a relationship between the environment and the economy. For example, an investor may be interested in understanding the environmental impacts of a proposal, or a decision-maker in the public sector may be interested in estimating the ‘return on investment’ in a new policy proposal that involves ecological restoration.
Users of ecosystem accounts match the information from the account tables to their communication or decision-making needs.
Users identify which account elements are relevant by considering:
- Which aspects of the ecosystem asset are being enhanced or degraded?
- Who may be interested (key stakeholders)?
If the tables include monetary values, it helps if users understand the economic elements of the accounts, including the distinctions between:
- Use and non-use values
- Exchange and welfare values
- Market and non-market values.
These concepts are described by the Productivity Commission in their Staff Working Paper on Environmental Policy Analysis: A Guide to Non-Market Valuation (2014).
