Green Accounting Final
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GREEN/ENRA ACCOUNTING
Tonie O. Balangue, PhDPresident and Executive Director
Resources, Environmental and Economic Center for Studies, Inc.
Quezon City, PhilippinesWWW.REECS.ORG
OUTLINE
ObjectivesGDP as a measure of economic welfare What is Green/ENRA accounting?Framework & methodology of green
accountingThe Philippines’ experience: Forest
ResourcesPolicy implicationsFlying over the forestlands of the Philippines
Objectives of this presentation
Share the works of REECS in green/ENRA accounting
Methodology
Forest resources covered in the ENRA studies
Implications of the Philippines green/ENRA accounting experience
Policy recommendations
Forest depletion as of 2003 map form
GDP or GDI is a basic measure of a country's economic performance and is the market value of all final goods and services made within the borders of a country.
Green/environmental accounting
Scorekeeping and management of green resources’ depletion and appreciation in physical stocks and economic values and integration to national accounts.
Total Economic Value
Use Value/Tangible
Asset
Non-Use Value/Intangible Asset
Direct Use Value
Indirect Use Value
Option Use Value
Existence Value
Source: J. Dixon,
GREEN RESOURCES VALUATION : A MUST IN GREEN ACCOUNTING
INDIRECT USE VALUE OF FOREST AS A WATERSHED RECHARGE
COASTAL PROTECTION FOREST
Deficiencies of the present NIAS
RP’s National Income Accounting System
Fails to reflect negative effects of economic growth (Congestion, Pollution, impacts to human health, ENR depletion)
Man-made physical capital is treated as wealth and depreciated, while ENR assets (forest, soil, clean air, water) are neglected.
Ignores economic activity determinants (+,-), (pollution, environmental services, household production of food and fuel taken from the ENR)
NATURAL CAPITAL
MAN-MADE CAPITAL
NIA/GDPGREEN RESOURCES
1. GREEN RESOURCES ARE JUST SOURCES OF RAW MATERIALS TO BE USED IN THE PRODUCTION OF MAN-MADE CAPITAL
NATURAL CAPITAL
MAN-MADE CAPITAL
NIA/GDPGREEN RESOURCES
GREEN RESOURCES ARE PART OF THE WEALTH OF A NATION. THEREFORE, SHOULD BE INTEGRATED INTO THE NATIONAL ACCOUNT
GREEN/ENRA ACCOUNTIN G
Inputs, outputs, finished products, recycled products, wastes, emissions
Comparison
GDP or NDI Green Accounting
Inadequate measure of country’s economic performance
Ignore natural resources scarcities.
Undermine economic performance , growth & sustainability
Environmental degradation as an ‘external’ (social) cost of economic activity not accounted for.
Improve measure of total welfare of a country by including the net value of natural capital as affected by economic activity.
Ensures sustainability of green resources by maintaining net growth over depletion
Green resource degradation as social cost is accounted for
Coverage of ENRAP Studies (1-4)
ForestsWildlife and protected areas
RattanBamboo
Soil/landFisheriesPollutionWastesHealth impacts
Physical (area & volume) and Economic Accounting Methodology
Year 1 Year-2
Opening Stock Opening Stock
Plus Plus
Growth: Natural In-growth, Man-made growth
Growth: Natural In-growth, Man-made growth
Less Less
Reduction: Mortality, Harvests, Natural causes, Land use conversion
Reduction: Mortality, Harvests, Natural causes, Land use conversion
Closing Stock Closing Stock
Green/ENRA Accounting Results
1970 – 1989 Accounting Period PhP1985 Constant Price
Dipterocarps:
Total Dipt: – 38.99 MnCum/PhP30.6 Bn Old Growth: - 52.14 MnCum/PhP41.6 Bn Residual: +12.27 MnCum/PhP11.95Bn
Plantations : +03.66 MnCum/PhP1.7 BnPines : - 0.06 MnCum/PhP0.082 BnRattan : - 151.16MnLm/PhP0.12 BnMangroves : -0.21 MnCum/PhP0.045 Bn
FOREST DEPRECIATION: - PhP29.17 Bn (1970-1989)
POLICY RECOMMENDATIONS
1. Protection and sustainable management of remaining forest types.
2. Plant more trees in deforested areas to build up more volume growth of depleted forest types
9 mn hectares of deforested forestlands awaiting development.
3. Residual forests should be allowed to grow further and possibly closed for harvesting operations.
EXPECTED RESULTS
1. More green resources biomass growth and build up (area and volume, forest types).
2. Better environmental services (carbon sink, water, soil and soil nutrients build up, clean air, cooler temperature).
3. Higher economic value of green resources.
4. Appreciation of the adjusted GDP/NDP
What’s next?
•Enact a Bill/Law for the adoption and implementation of Green Accounting as an integral part of the National Income Accounting System of the Philippines. Complete economic valuation of environmental services is necessary for the Green Accounting before integration into the National Income Accounting System.
•Localize green accounting to guide LGUs in their investment portfolio in the environment and natural resources sector.
•Enact a Bill/Law on the implementation of Payment for Environmental Services to generate funds for the restoration and sustainable management of the ENR to mitigate and adapt to climate change.
Forest depletion as of 2003
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