Towards a consistent approach for ecosystem accounting

- There remain several methodological challenges to ecosystem accounting.
- These include connecting ecosystem services to accounts and recording degradation.
- We present a recording and valuation approach consistent with the national accounts.
- Different recording mechanisms are appropriate for public and private services.

In spite of an increasing interest in environmental economic accounting, there is still very limited experience with the integration of ecosystem services and ecosystem capital in national accounts. This paper identifies four key methodological challenges in developing ecosystem accounts: the definition of ecosystem services in the context of accounting, their allocation to institutional sectors; the treatment of degradation and rehabilitation, and valuing ecosystem services consistent with SNA principles. We analyze the different perspectives taken on these challenges and present a number of proposals to deal with the challenges in developing ecosystem accounts. These proposals comprise several novel aspects, including (i) presenting an accounting approach that recognizes that most ecosystems are strongly influenced by people and that ecosystem services depend on natural processes as well as human ecosystem management; and, (ii) recording ecosystem services as either contributions of a private land owner or as generated by a sector 'Ecosystems' depending on the type of ecosystem service. We also present a consistent approach for recording degradation, and for applying monetary valuation approaches in the context of accounting.