Ecosystems are communities of plants, animals, microorganisms and their physical environment which interact together. Healthy ecosystems can improve our wellbeing and contribute to our economy, but this contribution is not always clear – and can be invisible to decision-makers.
Building on land accounts, ecosystem accounts give us the next level of detail on the environment, helping us to better describe changes in ecosystems and how such changes impact our wellbeing and our economy. As with the land accounts, the way that ecosystem ‘assets’ are distributed across the landscape is an important part of understanding their value.
The figure below illustrates the four ‘building blocks’ of ecosystem accounts: the measurement of stocks of biophysical assets; the condition of the ecosystem assets; the flows of goods and services that the ecosystem assets provide, and the estimated value of the assets and services to Australians.
The links between these four building blocks illustrates that benefits people receive from the environment are dependent on ecosystem type, size and health.
Some useful ecosystem accounting concepts are described on the website of the United Nations System of Environmental Economic Accounting.
UN website: Ecosystem Accounting in the News
Some decisions need more information than is available in land accounts. For example, a land account can quantify changes in forest cover, but will not describe the condition of the remaining forest, or quantify the impact of the change on local communities. Ecosystem accounts bring together a richer set of environmental information, enabling decision-makers to consider deeper links between social, economic and environmental change.
Some decisions require information to be presented in monetary forms (such as cost-benefit analysis) whereas others can rely on biophysical information (such as environmental impact assessment). Ecosystem accounts can support both types of decisions.
As with all types of environmental-economic accounts, a key strength of ecosystem accounts is consistency with economic statistics, including GDP. An ecosystem account could be combined with economic statistics from the ABS to understand the relationship between environmental change and the productivity of Australians, highlighting important interactions that are often hidden from decision-makers. This information may be used to better identify policies which separate or ‘decouple’ productivity from environmental harm.
The potential uses of ecosystem accounting are diverse, including:
- environmental policy making – helping to understand which policy alternative creates the greatest public benefit
- natural resource management – helping to understand the optimal balance of productivity and environmental outcomes
- planning, development and conservation activities – helping to understand the best location for an activity or development
- providing measurement frameworks for private sector investment – helping to understand (and report) both private and public benefits of an investment.
The Department is supporting several pilot projects to test approaches for measuring ecosystems and their services that can be used to ecosystem accounts. These pilots include projects in:
- Gunbower-Koondrook-Perricoota Forest Icon site – in partnership with the Murray-Darling Basin Authority.
- Box Gum Grassy Woodlands, with the Australian National University under the Threatened Species Hub of the National Environmental Science Program.
- Mitchell Catchment, with Griffith University under the Northern Hub of the National Environmental Science Program.
Pilot accounts from these projects are expected to be released in 2021. These pilot accounts will inform the development of future ecosystem accounting projects, including the feasibility and utility of national ecosystem accounts.