Roadshow 2.3 Using natural capital accounting to track changes to ecosystem extent and condition

Using natural capital accounting to track changes to ecosystem extent and condition 

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Good afternoon, everyone. My name is Anthony O'Grady, and I lead the landscape and forest function team in CSIRO Land and Water. Today, I'll be highlighting some of the work that we're involved in in developing sets of the ecosystem accounts for each of the regions. I want to start by providing a brief introduction to the concept of natural capital accounting and start by defining some of underlying concepts. I'll also try to highlight the role that such accounting can play in environmental assessments. Then, I just want to finish off briefly by highlighting some of the data and the extent and condition accounts that were developed throughout the program.

So, I think there's growing recognition that our society and the economy, more generally, is deeply nested within the physical earth and its associated ecosystems and that our future prosperity and sustainability is tightly coupled to the nature and of the goods and services that the systems will provide. So, this concept isn't new, but until recently, the nature in the form of this relationship has largely been invisible in decision making.

So, environmental and economic accounting, often referred to as natural capital accounting, has emerged in recent years as a potential approach to recognise these imports and to value their contributions to society, the idea being that if the transactions between nature and society are more visible, that we'll do a better job of managing and valuing these inputs. Globally, at the moment, there's a very significant push to start to do this recognition, to recognise nature's imports and the emergence of concepts such as natural capital accounting as a means to doing this.

So, more formally, natural capital is the stock of renewable and non-renewable resources that combine to yield a flow of benefits to people in society. So, simply, natural capital accounting is just the process of calculating those stocks and flows of natural resources and services within given ecosystems. It's this process that provides a basis for valuing the inputs of those goods and services into the economy.

The approach we have taken to accounting in the program is aligned to international directions in environmental and economic accounting and more particularly, something known as the System for Environmental and Economic Accounting, the ... developed by the United Nations.

The SEEA, as it's known, has already established the foundations for accounting for some of the environmental inputs into the economy, so the flows of natural capital such as timber, fish, minerals, et cetera, are already well established in what's known as the SEEA Central Framework. However, the Central Framework itself doesn't effectively capture all of the goods and services that the environment provides and over the last decade, we've seen the emergence of this concept known as ecosystem accounting.

Where ecosystem accounting differs from the Central Framework is that it takes a spatially and temporally explicit view of the goods and services that ecosystems themselves provide to the economy. So, it expands the definition of what ... of the boundary of the economy to include the inputs and outputs of those ecosystem services. Ecosystem services might just be carbon sequestration, could be water filtration, but it could also be the sorts of cultural benefits that we, as a society, take from the environment.

Typically, within ecosystem accounting, disruptions to these ecosystem services would be very costly to repair. So, usually, these goods and services are provided free from nature, but as the cost of replacement of these is generally so large that the most effective management strategy is to provide for the protection of the ecosystems themselves.

The model adopted by the SEEA ecosystem accounting framework is conceptually quite simple. The focus of ecosystem accounting is to define the ecosystems as environmental assets. Within this framing, the supply, or the flow of ecosystem service is a function of both the extent and condition of the underlying ecosystems. So, the ecosystem accounting framework formalises the accounting approaches to facilitate the tracking associated with changes in the flows of ecosystem services that are driven by changes in the extent or the condition of the underlying assets. It enables an approach to formally value the services and to better assess their impact on the economy and society more generally.

So, within the GBA program, we've adopted the SEEA methodology to develop the extent and condition accounts for both the Cooper and Beetaloo regions. The choice of the SEEA was really driven by two key drivers. Primarily, the SEEA ecosystem accounting framework has been adopted as the international standard for ecosystem accounting last year. Furthermore, the Australian Government has also formally adopted this for its national accounting and it's trialling its adoption in a number of regions as part of its national strategy for environmental and economic accounting in Australia.

So, what role does it play in GBA? Our aim within the GBA program was to develop extent and condition accounts for both regions, to summarise the baseline data and just to facilitate the ongoing monitoring of the environmental impacts associated with the industry expansion. Our aim was to develop opening accounts for each of the regions, not to develop historical accounts. Furthermore, we weren't attempting to measure and value the ecosystem services that these regions provide, although that would be a useful thing to do. Primarily, we're looking to organise and summarise some of the investigations that were going on in a manner that is coherent with the international directions in environmental accounting and provide the baseline data for future monitoring and accounting of industry impacts at a regional scale.

So, what does it look like? I mean, the approach we took was really around ... was focused on those two key aspects of defining the ecosystem extent and the condition of those associated ecosystems. To define that, to define the ecosystems, we adapted the regional ecosystem methodologies that are used extensively in Queensland, which bring together a whole bunch of ... whole range data sets on the bioregions, the land use, the vegetation characteristics and landscape classes to define ecosystem assets within each of the regions.

Condition itself is always a challenging proposition, but we've collated our data to ... within a number of themes and so, that speak to the structure, function and composition of those underlying ecosystems. So, to do that assessment, we've started to bring together data on existing disturbances within each of the regions, trends and directions in climate, as well as the ... some of the other investigations that were going on within the region, focused on understanding the condition of the vegetation and the persistence of the biodiversity within the regions.

Then, using some information models, set out to start to compile the accounts for each of the regions. These accounts can take many different forms, often presented as tabular data that can be spatially explicit and so, mapped throughout the landscape, or they can be summarised in graphs or change matrices.

Just to highlight some of the sorts of data sets that we've pulled together in the program, in the top two left hand graphs there, we can see industry related and non-industry related disturbances that were mapped across each of the regions. We brought together, for example, data on the frequency and extent of fires over the last decade. We also brought in a whole bunch of data relating to trends in different climate parameters. So, in the graph that's second from the right there, on the top row, that's showing trends in climate wetness across the region. So, you can see that climate is wetting up. The graph directly below that shows the trend in temperature. So, one of the key drivers for condition across the ... for landscape function across this region is going to be that wetting and warming trends that we can see in the climate. Then, the two figures on the right hand side show trends in condition, as modelled by Randall Donohue and our estimates of biodiversity persistence across the region that were also conducted throughout the program.

So, some of the take home messages from these accounts is, for both the Cooper and the regions ... Cooper and Beetaloo regions, they're both characterised by reasonably intact ecosystems and relatively high biodiversity persistence scores. So, overall, we found that the conditions were in pretty good condition and as an outcome of that, the persistence for biodiversity is likely to be relatively high.

The other thing that's kind of important in the way that we've done the accounts is that many of the data sets that we've collated and pulled together within the program speak directly to nodes within the causal network. More importantly, it provides a basis to develop future accounts and start to develop those change matrices that will be associated with industry expansion.

I think there's some more work to be done in terms of condition accounting. Condition accounting in particular is something that's going through quite a lot of evolution at the moment and I think there's a good opportunity to start to think about linking some of the condition metrics that we've been looking at into more formal state and transition modelling. That really helps to compile ... in the compilation of accounts, but ... and also to draw down on industry data. Particularly, there are a number of data gaps within the program, particularly in relation to things like invasive species.

More broadly, what we've set out to create is sets of the information organised in a manner that, if, in the future, we could start to look at their impacts on the flows of the ecosystem services and the broader benefits to society, I think we'll be then moving towards a situation where we can do truly cumulative impact assessments of industry expansion within regions on the ecosystem services and values that those systems provide. Okay. Thanks very much.

Related factsheet 

26. Using natural capital accounting to track changes to ecosystem extent and condition 

The GBA Program compiled opening accounts or baseline ecosystem extent and condition accounts, for the Beetaloo and Cooper GBA regions. This provides a basis for ongoing assessment of environmental change at a regional scale as the gas industry develops.


View all GBA factsheets

About the presenter 

Dr Anthony O’Grady


Anthony leads the landscape and forest function team in CSIRO Land and Water.  With a background in plant physiology and ecohydrology he is now applying his skills to address landscape scale management and sustainability issues.

Last updated:
15 November 2021