Natural Capital Accounting Comes to the U.S.

Mangroves store carbon and protect coastlines. (Source: Unsplash)

Counting and accounting for nature—work Greene Economics has done for more than 30 years.

Yesterday, the White House released the National Strategy to Develop Statistics for Environmental-Economic Decisions—a plan to build a U.S. system of national accounts like our GDP accounting, but for the environment. The strategy will create a system to "account for natural assets…and quantify the immense value this natural capital provides." As environmental economists, this warms our hearts.

Natural capital accounting is a way of measuring the economic value of natural assets—forests, wetlands, water, soils, and the species they support—and the flow of benefits, or ecosystem services, they provide to people: clean water, flood protection, carbon storage, pollination, and recreation, among others. Putting those values in economic terms lets them sit alongside conventional figures like GDP in the decisions of governments, businesses, and investors. It also underpins environmental markets—such as carbon and water-quality trading—where the benefits nature provides can be quantified, priced, and exchanged.

For example, mangroves protect coastal areas from flooding and erosion, store carbon, sustain biodiversity, improve water quality, and support fisheries and livelihoods. These are benefits that natural capital accounting can measure and put on the books rather than leave uncounted.

The new U.S. strategy aims to bring this kind of measurement into official national statistics—and in doing so, the U.S. joins more than 90 countries already moving in this direction. Many are following the UN's System of Environmental-Economic Accounting (SEEA), the international standard already adopted by countries including the U.K., Canada, India, Switzerland, Germany, Kenya, Ghana, and the Philippines.

At Greene Economics, we are particularly pleased to see the recognition and emphasis on incorporating the values and perspectives of Indigenous Peoples into the process.

Our team has been following the development of these tools and methods—capturing the economic value of nature and nature-based solutions—for more than 30 years. We regularly apply the same measurement techniques the new system will use—across most of our service areas—for clients who want to build these values into their decisions. These include valuing ecosystem services, quantifying how development and management choices change natural resources, and using benefit transfer and other economic valuation methods to express nature's contributions in terms that inform investment, regulatory, and land-management decisions.

Climate change and the loss and degradation of ecosystems increasingly affect operations, productivity, environmental risk, and financial stability. We strive to apply the best available science to quantify and value the benefits of ecosystem services for our clients.

For more on the new strategy and what it aims to do, see The New York Times: White House Aims to Reflect the Environment in Economic Data.