The natural environment provides goods and services that are essential for our wellbeing and development. Every part of the natural environment that is capable of contributing to human well-being is a capital asset – part of our ‘natural capital’. Natural capital includes renewable components such as ecosystems and solar energy, and non-renewable components such as mineral deposits and fossil fuels.
Human activity has substantially degraded the natural environment. The global stock of natural capital and valuable goods and services that it provides are being rapidly depleted, in some cases irreversibly. Conventional measures of wealth and economic development do not take this into account. The status of natural capital is not for example captured comprehensively by accounting frameworks such as the UN System of National Accounts, or by economic activity measures such as GDP
There is an urgent need to develop effective methods and measures for natural capital accounting and to embed these within relevant legal and policy frameworks. This study is designed to inform efforts by legislators to address these needs. It summarizes key national and international efforts to develop legal and policy frameworks for natural capital accounting. We highlight experiences, challenges and lessons learned in twenty-one countries, and outline a vision for future action to improve the global knowledge-base concerning legal and policy options for managing natural capital. The three key conclusions of this study are as follows:
- Efforts to develop laws and policies for natural capital accounting rely on continued cooperation and diverse forms of support. This entails international effort – accounting standards such as UN–SEEA; commitments and goals such as the post-2015 SDGs and Convention on Biological Diversity; capacity-building and research partnerships such as WAVES and TEEB. It also entails national efforts – involving various parts of government and diverse stakeholders, including communities and the private sector.
- There is no ‘best practice’ approach to legal and policy reform for natural capital accounting. The task is complex and specific to national circumstances, cutting across many policies, institutions and sectors. Frameworks for natural capital accounting may involve combinations of new legislation, and new action under old laws. This study outlines practical approaches from several countries that may prove useful for others.
- A key future challenge for legislators is to develop and share innovative approaches for sustainably managing natural capital. Accounting is an important step towards that goal – others are needed. This study highlights initial steps that countries have taken to link natural capital accounting with broader strategies for natural capital management.
Download the report here.