Hostname: page-component-745bb68f8f-cphqk Total loading time: 0 Render date: 2025-01-27T06:56:19.232Z Has data issue: false hasContentIssue false
  • English
  • Français

Wealth accounting, ecological capital and ecosystem services

Published online by Cambridge University Press:  23 January 2013

Edward B. Barbier
Edward B. Barbier*
Affiliation:
Department of Economics & Finance, University of Wyoming, 1000 E University Ave, Laramie, WY 82071, USA. E-mail: ebarbier@uwyo.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper develops a methodology for including ecosystem services in a wealth accounting framework. Accounting for ecosystems and their services leads to adjusting net domestic product (NDP) for the direct benefits provided by the current stock of ecosystems but not for their indirect contributions in terms of protecting or supporting economic activity, property and human lives. When ecosystems are irreversibly converted for economic development, NDP must be further modified to reflect any capital revaluation that occurs with the current conversion of ecological capital to other land uses. The risk of collapse also requires adjustments to NDP, as any capital revaluation associated with ecosystem conversion must be adjusted for this risk, and the discounted minimum value of ecosystems associated with collapse must be subtracted from NDP. These various contributions of ecological capital to wealth accounts are illustrated with the example of mangroves in Thailand over the period 1970–2009.

Type
Research Article
Information
Environment and Development Economics , Volume 18 , Issue 2 , April 2013 , pp. 133 - 161
Copyright
Copyright © Cambridge University Press 2013

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aksornkoae, S. and Tokrisna, R. (2004), ‘Overview of shrimp farming and mangrove loss in Thailand’, in Barbier, E.B. and Sathirathai, S. (eds), Shrimp Farming and Mangrove Loss in Thailand, Cheltenham, UK: Edward Elgar, pp. 37–51.Google Scholar
Aronsson, T. and Löfgren, K.-G. (1996), ‘Social accounting and welfare measurement in a growth model with human capital’, Scandinavian Journal of Economics 98: 185–201.Google Scholar
Aronsson, T. and Löfgren, K.-G. (1998), ‘Green accounting in imperfect market economies’, Environmental and Resource Economics 11: 273–287.Google Scholar
Arrow, K.J., Dasgupta, P., and Mäler, K.-G. (2003), ‘The genuine savings criterion and the value of population’, Economic Theory 21: 217–225.Google Scholar
Arrow, K.J., Dasgupta, P., Goulder, L.H., Mumford, K.J., and Oleson, K. (2012), ‘Sustainability and the measurement of wealth’, Environment and Development Economics 17: 317–353.Google Scholar
Asheim, G. (1994), ‘Net national product as an indicator of sustainability’, Scandinavian Journal of Economics 96: 257–265.CrossRefGoogle Scholar
Asheim, G. (1997), ‘Adjusting green NNP to measure sustainability’, Scandinavian Journal of Economics 99: 355–370.CrossRefGoogle Scholar
Barbier, E.B. (2003), ‘Habitat–fishery linkages and mangrove loss in Thailand’, Contemporary Economic Policy 21: 59–77.CrossRefGoogle Scholar
Barbier, E.B. (2007), ‘Valuing ecosystem services as productive inputs’, Economic Policy 22: 177–229.Google Scholar
Barbier, E.B. (2008), ‘Ecosystems as natural assets’, Foundations and Trends in Microeconomics 4: 611–681.CrossRefGoogle Scholar
Barbier, E.B. (2011), Capitalizing on Nature: Ecosystems as Natural Assets, Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Barbier, E.B. and Cox, M. (2004), ‘An economic analysis of shrimp farm expansion and mangrove conversion in Thailand’, Land Economics 80(3): 389–407.Google Scholar
Bateman, I.J., Mace, G.M., Fezzi, C., Atkinson, G., and Turner, R.K. (2011), ‘Economic analysis for ecosystem service assessments’, Environmental and Resource Economics 48: 177–218.CrossRefGoogle Scholar
Busing, R.T. and White, P.S. (1993), ‘Effects of area on old-growth forest attributes: implications for equilibrium landscape concept’, Landscape Ecology 8: 119–126.CrossRefGoogle Scholar
Cairns, R.D. (2000), ‘Sustainability accounting and green accounting’, Environment and Development Economics 5: 49–54.CrossRefGoogle Scholar
Cairns, R.D. (2002), ‘Green accounting using imperfect, current prices’, Environment and Development Economics 7: 207–214.Google Scholar
Chmura, G.L., Anisfeld, S.C., Cahoon, D.R., and Lynch, J.C. (2003), ‘Global carbon sequestration in tidal, saline wetlands’, Global Biogeochemical Cycles 17: 1111–1123.Google Scholar
Daily, G.C., Söderqvist, T., Aniyar, S., et al. . (2000), ‘The value of nature and the nature of value’, Science 289: 395–396.CrossRefGoogle ScholarPubMed
Dasgupta, P. (2008), ‘Nature in economics’, Environmental and Resource Economics 39: 1–7.Google Scholar
Dasgupta, P. (2009), ‘The welfare economic theory of green national accounts’, Environmental and Resource Economics 42: 3–38.Google Scholar
Dasgupta, P. and Mäler, K.-G. (2000), ‘Net national product, wealth, and social well-being’, Environment and Development Economics 5: 69–93.Google Scholar
Dasgupta, P.S. and Mäler, K.-G. (2003), ‘The economics of non-convex ecosystems: an introduction’, Environmental and Resource Economics 26: 499–525.Google Scholar
Dirzo, R. and Raven, P.H. (2003), ‘Global state of biodiversity and loss’, Annual Review of Environment and Resources 28: 137–167.Google Scholar
Dobson, A., Lodge, D., Alder, J., et al. (2006), ‘Habitat loss, trophic collapse, and the decline of ecosystem services’, Ecology 87: 1915–1924.CrossRefGoogle ScholarPubMed
Elliott, M., Burdon, D., Hemingway, K.L., and Apitz, S.E. (2007), ‘Estuarine, coastal and marine ecosystem restoration: confusing management and science – a revision of concepts’, Estuarine Coastal and Shelf Science 74: 349–366.CrossRefGoogle Scholar
Elmqvist, T., Folke, C., Nyström, M., Peterson, G., Bengtsson, J., Walker, B., and Norberg, J. (2003), ‘Response diversity, ecosystem change, and resilience’, Frontiers in Ecology & Environment 1: 488–494.Google Scholar
EPA (Environmental Protection Agency) (2009), Valuing the Protection of Ecological Systems and Services, A Report of the EPA Science Advisory Board, Washington, DC: EPA.Google Scholar
FAO (Food and Agricultural Organization) of the UN (2006), Global Forest Resources Assessment 2005, Main Report. Progress Towards Sustainable Forest Management, FAO Forestry Paper No. 147, Rome: FAO.Google Scholar
FAO (Food and Agricultural Organization) of the UN (2007a), Mangroves of Asia 1980–2005: Country Reports, Forest Resource Assessment Working Paper No. 136, Rome: FAO.Google Scholar
FAO (Food and Agricultural Organization) of the UN (2007b), ‘The world's mangroves 1980–2005’, FAO Forestry Paper No. 153, Rome: FAO.Google Scholar
Folke, C., Carpenter, S., Walker, B., Scheffer, M., Elmqvist, T., Gunderson, L., and Holling, C.S. (2004), ‘Regime shifts, resilience, and biodiversity in ecosystem management’, Annual Review of Ecology, Evolution, and Systematics 35: 557–581.Google Scholar
Freeman, A.M. III (2003), The Measurement of Environmental and Resource Values: Theory and Methods, 2nd ednWashington, DC: Resources for the Future.Google Scholar
Halpern, B.S., Silliman, B.R., Olden, J.D., Bruno, J.P, and Bertness, M.D. (2007), ‘Incorporating positive interactions in aquatic restoration and conservation’, Frontiers in Ecology and the Environment 5: 153–160.CrossRefGoogle Scholar
Hamilton, K. and Clemens, M. (1999), ‘Genuine savings rates in developing countries’, World Bank Economic Review 13: 333–356.CrossRefGoogle Scholar
Hamilton, K. and Withagen, C. (2007), ‘Savings growth and the path of utility’, Canadian Journal of Economics 40: 703–713.Google Scholar
Hartwick, J.M. (1990), ‘Natural resources, national accounting and economic depreciation’, Journal of Public Economics 43: 291–304.Google Scholar
Hartwick, J.M. (1992), ‘Deforestation and national accounting’, Environmental and Resource Economics 2: 513–521.Google Scholar
Hartwick, J.M. (1994), ‘National wealth and net national product’, Scandinavian Journal of Economics 96: 253–256.Google Scholar
Kamien, M.I. and Schwartz, N.L. (1991), Dynamic Optimization: The Calculus of Variations and Optimal Control in Economics and Management, 2nd ednAmsterdam: Elsevier.Google Scholar
Levin, S.A. and Lubchenco, J. (2008), ‘Resilience, robustness, and marine ecosystem-based management’, BioScience 58: 27–32.CrossRefGoogle Scholar
Lindahl, E. (1933), ‘The concept of income’, In Bagge, G. (ed.), Economic Essays in Honor of Gustav Cassel, London: Allen and Unwin, pp. 399–407.Google Scholar
Lotze, H.K., Lenihan, H.S., Bourque, B.J., et al. (2006), ‘Depletion, degradation and recovery potential of estuaries and coastal seas’, Science 312: 1806–1809.Google Scholar
MA (Millennium Ecosystem Assessment) (2005), Ecosystems and Human Well-being: Synthesis, Washington, DC: Island Press.Google Scholar
Mäler, G.-M. (1991), ‘National accounts and environmental resources’, Environmental and Resource Economics 1: 1–15.Google Scholar
Mäler, K.-G. (2008), ‘Sustainable development and resilience in ecosystems’, Environmental and Resource Economics 39: 17–24.Google Scholar
Mäler, K.-G., Aniyar, S., and Jansson, A. (2008), ‘Accounting for ecosystem services as a way to understand the requirements for sustainable development’, Proceedings of the National Academy of Sciences 105: 9501–9506.Google Scholar
McConnell, K.E. and Bockstael, N.E. (2005), ‘Valuing the environment as a factor of production’, In Mäler, K.-G. and Vincent, J.R. (eds), Handbook of Environmental Economics, vol. 2, Amsterdam: Elsevier, pp. 621–669.Google Scholar
NRC (National Research Council) (2005), Valuing Ecosystem Services: Toward Better Environmental Decision Making, Washington, DC: National Academy Press.Google Scholar
Orth, R.J., Carruthers, T.J.B., Dennison, W.C., et al. (2006), ‘A global crisis for seagrass ecosystems’, BioScience 56: 987–996.Google Scholar
Pearce, D.W. and Atkinson, G. (1993), ‘Capital theory and the measurement of sustainable development: an indicator of weak sustainability’, Ecological Economics 8: 103–108.Google Scholar
Pearce, D.W. and Barbier, E.B. (2000), Blueprint for a Sustainable Economy, London: Earthscan Publications.CrossRefGoogle Scholar
Pearce, D.W., Markandya, A., and Barbier, E.B. (1989), Blueprint for a Green Economy, London: Earthscan Publications.Google Scholar
Perrings, C. (1998), ‘Resilience in the dynamics of economic-environmental systems’, Environmental and Resource Economics 11: 503–520.Google Scholar
Peterson, G., Allen, C.R., and Holling, C.S. (1998), ‘Ecological resilience, biodiversity and scale’, Ecosystems 1: 6–18.Google Scholar
Petersen, J.E., Kemp, W.M., Bartleson, R., et al. (2003), ‘Multiscale experiments in coastal ecology: improving realism and advancing theory’, BioScience 53: 1181–1197.Google Scholar
Pezzey, J.C.V. (1997), ‘Sustainability constraints versus “optimality” versus intertemporal concern, and axioms versus data’, Land Economics 73(4): 448–466.CrossRefGoogle Scholar
Polasky, S. and Segerson, K. (2009), ‘Integrating ecology and economics in the study of ecosystem services: some lessons learned’, Annual Review of Resource Economics 1: 409–434.Google Scholar
Reed, W.J. and Heras, H.E. (1992), ‘The conservation and exploitation of vulnerable resources’, Bulletin of Mathematical Biology 54: 185–207.Google Scholar
Rilov, G. and Schiel, D.R. (2006), ‘Seascape-dependent subtidal–intertidal trophic linkages’, Ecology 87(3): 731–744.Google Scholar
Sarntisart, I. and Sathirathai, S. (2004), ‘Mangrove dependency, income distribution and conservation’, In Barbier, E.B. and Sathirathai, S. (eds), Shrimp Farming and Mangrove Loss in Thailand, Cheltenham, UK: Edward Elgar, pp. 96–114.Google Scholar
Sathirathai, S. and Barbier, E.B. (2001), ‘Valuing mangrove conservation, Southern Thailand’, Contemporary Economic Policy 19: 109–122.Google Scholar
Scheffer, M., Carpenter, S., Foley, J.A., Folke, C., and Walker, B. (2001), ‘Catastrophic shifts in ecosystems’, Nature 413: 591–596.Google Scholar
Silliman, B.R. and Bertness, M.D. (2002), ‘A trophic cascade regulates salt marsh primary production’, Proceedings of the National Academy of Sciences 99(14): 10500–10505.Google Scholar
Smulders, S. (2012), ‘An arrow in the Achilles’ heel of sustainability and wealth accounting’, Environment and Development Economics 17: 368–372.CrossRefGoogle Scholar
Solow, R. (2012), ‘A few comments on “Sustainability and the measurement of wealth”’, Environment and Development Economics 17: 354–355.CrossRefGoogle Scholar
Spalding, M., Kainuma, M., and Collins, L. (2010), World Atlas of Mangroves, London: Earthscan.Google Scholar
TEEB (The Economics of Ecosystems and Biodiversity) (2011), The Economics of Ecosystems and Biodiversity: Mainstreaming the Economics of Nature: A Synthesis of the Approach, Conclusions and Recommendations of TEEB, Bonn: TEEB.Google Scholar
Turner, M.G., Romme, W.H., Gardner, R.H., O'Neill, R.V., and Kratz, T.K. (1993), ‘A revised concept of landscape equilibrium: disturbance and stability on scaled landscape’, Landscape Ecology 8: 213–227.Google Scholar
UNEP (United Nations Environment Programme) (2006), Marine and Coastal Ecosystems and Human Wellbeing: A Synthesis Report based on the Findings of the Millennium Ecosystem Assessment, Nairobi: UNEP.Google Scholar
UNU-IHDP (United Nations University International Human Dimensions Programme) on Global Environmental Change and UNEP (United Nations Environment Programme) (2012), Inclusive Wealth Report 2012. Measuring Progress toward Sustainability, Cambridge, UK: Cambridge University Press.Google Scholar
Vaiphasa, C., de Boer, W.F., Skidmore, A.K., Panitchart, S., Vaiphasa, T., Bamrongrugsa, N. and Santitamnont, P. (2007), ‘Impact of solid shrimp pond waste materials on mangrove growth and mortality: a case study from Pak Phanang, Thailand’, Hydrobiologia 591: 47–57.CrossRefGoogle Scholar
Valiela, I., Bowen, J.L., and York, J.K. (2001), ‘Mangrove forests: one of the world's threatened major tropical environments’, BioScience 51: 807–815.Google Scholar
Walker, B., Pearson, L., Harris, M., Mäler, K.-G., Li, C.-Z., Biggs, R., and Baynes, T. (2010), ‘Incorporating resilience in the assessment of inclusive wealth: an example from south east Australia’, Environmental and Resource Economics 45: 183–202.Google Scholar
Waycott, M., Duarte, C.M., Carruthers, T.J.B., et al. (2009), ‘Accelerating loss of seagrasses across the globe threatens coastal ecosystems’, Proceedings of the National Academy of Sciences 106: 12377–12381.Google Scholar
Weitzman, M.L. (1976), ‘On the welfare signficance of national product in a dynamic economy’, Quarterly Journal of Economics 90: 156–162.Google Scholar
World Bank (2011), World Development Indicators, Washington, DC: World Bank.Google Scholar