Rocky Harris United Kingdom Revision of SEEA 2003 Options for the structure of Part III on applications

Four options 1.Status quo (order used in SEEA 2003) 2.Natural resource classification 3.Environmental issue 4.Policy cycle

1. Status quo – existing chapter 11 A.Activities which lead to degradation of environmental media, using physical and hybrid flow accounts from chapters 3 and 4 B.Responses to degradation through defensive expenditures and development of economic instruments (chapters 5 and 6) C.National wealth and changes due to depletion of natural resources (chapters 7 and 8) D.Use of pricing techniques to determine cost- effectiveness of policies (chapter 9) E.Adjustments to macro-economic aggregates (chapter 10)

Option 1: status quo Organised by the order of chapters Further divided by indicators/analysis Good showcase of how accounts are used Lacks sense of how approaches from different chapters can deal with the same environmental issue

2. Natural resource classification 1.Natural resources (mineral and energy, soil, water including surface water, biological) 2.Land and surface water (developed land, agricultural land, wooded land, major water bodies, other land) 3.Ecosystems (terrestrial, aquatic and atmospheric systems) Also intangible environmental assets

Option 2: natural resource classification Classification by environmental asset Main policy focus – climate change – is a subset of ‘atmospheric ecosystem’ Some overlap between items in policy terms e.g. water Lacks clear relationship to policy concerns

3. Environmental issues – SD indicators Atmosphere (4 indicators) Land (10 indicators) Oceans, seas and coasts (6 indicators) Fresh water (5 indicators) Biodiversity (7 indicators) Consumption and production patterns (14 indicators)

Option 3: environmental issues No ready classification - could be by reference to groupings of SD indicators Would be well-related to policy concerns Good opportunity to link approaches from different chapters … … but may entail some repetition of analytical methods Focus on indicators may mean some accounts not readily shown

The policy process and the evidence base Base data availability and analysis Information about target area and analysis Monitoring and evaluation data and analysis Development of indicators, evidence and analysis Data and analysis of alternative options

4. The policy cycle 1.Identification of problem 2.Information about target areas 3.Assessment of policy options and setting of targets 4.Monitoring and evaluation

4. SEEA and the policy cycle Stage of policy cycleSEEA approaches that might be relevant 1. Identification of problemGenerally relies upon broad indicators, which could be drawn from the accounts 2. Information about target areas Diagnosis – requires detailed basic statistics such as a link with sector 3. Assessment of policy options and setting of targets Requires modelling and simulation tools, understanding of financial implications 4. Monitoring and evaluationApproaches such as decomposition analysis, required to assess contribution of different initiatives, summarise overall progress

Option 4: policy cycle Organised by type of evidence required Treats different environmental issues in uniform way Could demonstrate integrated nature of the accounts But don’t policy users generally only think in silos?

Summary of options AdvantagesDisadvantages 1. Status quo (order of chapters) Clear links between chapters and applications Good show case of how accounts can be used Environmental issues not grouped together Difficult to show how accounts can be brought together 2. Natural resource Environmental issues grouped together to some extent Coherent classification already exists Might be integrated with MEA classification of services May involve repetition of approaches No clear link with policy concerns May require further sub-classification of flows or ecosystem services Some accounts are more generic and may have to be treated separately 3. Environmental issue Clear link with policy concerns Can integrate stock, monetary and valuation accounts Would be consistent with the structure of a section on indicators May involve some repetition of approaches May be difficult to find a range of applications for some key areas such as biodiversity and land Maintains policy silos 4. Policy cycleShows integrated nature of accounts, across environmental issue as well as approaches from different accounts Good link with policy approach No clear link with specific policy issues More work required to collate integrated stock, monetary and valuation account applications

Conclusion: a hybrid structure? A three part structure:  Environmental issue – degradation of climate, water, land, biodiversity (chapters 3 and 4, also 9). Would provide the main link to the section on indicators. Could incorporate applications relating to stocks (chapters 7 and 8) and elements of applications relating to taxes and expenditures (chapters 5 and 6), to the extent that such applications were relevant to the environmental issue being covered;  Environmental resources – renewables, non-renewables, etc, mainly based on chapters 7 and 8, to the extent that they were not covered in the previous part  Other applications – taxes, expenditures, emission rights etc, from chapters 5 and 6, to the extent that they were not covered in the previous parts