Natural Capital Accounting and Valuation of the Ecosystem Services Project

• 09 Jan 2021

Why in News

Natural Capital Accounting and Valuation of the Ecosystem Services (NCAVES) India Forum-2021 is being organised by the Ministry of Statistics and Programme Implementation (MoSPI) in virtual format.

• The MoSPI has taken up several initiatives under the project “Natural Capital Accounting and Valuation of Ecosystem Services (NCAVES)” which aims to advance the theory and practice of ecosystem accounting in India.

Key Points

• About the Project:
  
  • The NCAVES Project, funded by the European Union, has been jointly implemented by the United Nations Statistics Division (UNSD), the United Nations Environment Programme (UNEP) and the Secretariat of the Convention of Biological Diversity (CBD).
  • India is one of the five countries taking part in this project - the other countries being Brazil, China, South Africa and Mexico.
  • In India, the NCAVES project is being implemented by the MoSPI in close collaboration with the Ministry of Environment, Forest and Climate Change (MoEF&CC) and the National Remote Sensing Centre (NRSC) under the Department of Space.
• Natural Capital Accounting (NCA):
  
  • It is an umbrella term covering efforts to make use of an accounting framework to provide a systematic way to measure and report on stocks and flows of natural capital.
    
    • Natural capital is another term for the stock of renewable and non-renewable resources that combine to yield a flow of benefits to people.
  • NCA covers accounting for individual environmental assets or resources, both biotic and abiotic (such as water, minerals, energy, timber, fish), as well as accounting for ecosystem assets (e.g. forests; wetlands), biodiversity and ecosystem services, in both physical and monetary terms.
  • Just like the compilation of national accounts of a country is guided by the System of National Accounts (SNA), for natural capital accounting, the System of Environmental-Economic Accounting (SEEA) is taken.
    
    • The System of Environmental-Economic Accounting (SEEA) provides a framework for measuring the link between the environment and the economy.
    • SEEA-Central Framework was adopted in February 2012 as an international statistical standard by the UN Statistical Commission.
    • The SEEA accounts bring into direct focus the relationship between the environment and economy not revealed through traditional measures of economic activity, such as Gross Domestic Product (GDP).
• Ecosystem Services:
  
  • As a part of an ecosystem, humans derive lots of benefits from the biotic and abiotic components. These benefits are collectively termed as ecosystem services.
  • Ecosystem services are classified into four types:
    
    • Provisioning Services: This includes the products/raw materials or energy outputs like food, water, medicines and other resources from ecosystems.
    • Regulating Services: This includes the services which regulate the ecological balance. For example, forests purify and regulate air quality, prevent soil erosion, and control greenhouse gases etc.
    • Supporting Services: These form the basis for other services. They provide habitat for different life forms, retain biodiversity, nutrient cycling, and other services for supporting life on the earth.
    • Cultural Services: It includes recreational, aesthetic, cultural and spiritual services, etc. Most natural elements such as landscapes, mountains, caves, are used as a place for cultural and artistic purposes.
• Benefits:
  
  • The participation in the project has helped MoSPI commence the compilation of the Environment Accounts as per the UN-SEEA framework and release environmental accounts in its publication “EnviStats India” on an annual basis from 2018.
  • Several of these accounts are closely related to the social and economic attributes, making them a useful tool for the Policy.
  • Another tool under the NCAVES project is the development of the India-EVL Tool which is essentially a look-up tool giving the values of various ecosystem services in the different States of the country.
  • Ecosystem accounting can produce information on the extent of ecosystems, their condition based on selected indicators, and the flow of ecosystem services.

Source:PIB