UN Statistical Commission considers new economic reporting model that includes natural capital

Source: Xinhua| 2021-03-03 06:18:55|Editor: huaxia

The UN Statistical Commission on Tuesday began to consider a new economic reporting model that includes the contributions of nature.

The new accounting framework would go beyond the commonly used statistic of gross domestic product (GDP) and would ensure that natural capital -- the contributions of forests, oceans and other ecosystems -- is recognized in economic reporting.

"This is a singularly important new development that will have a major impact. It can and it will be a game-changer for the way we make policy. And it will deeply affect how we think about and tackle climate change and biodiversity, to name just a few of the challenges we face on this planet," said UN Chief Economist Elliott Harris.

Since World War II, economic progress has always been measured in terms of goods and services, or GDP, he said. "But we never did that for nature. And yet nature provides services that we value, that we need, that we cannot exist without."

The new accounting framework accounts for and assesses the value of the services that are provided by ecosystems. Nature and the contribution of these ecosystems to human prosperity and well-being will finally be reflected in balance sheets, he told reporters in a briefing.

"As an example, if we cut down thousands of hectares of forest for wood, our GDP will go up through the sale of the timber, the services that the timber provide. But we know that that's not the whole story. We will be losing all of the ecosystem services that that forest would be providing."

Protecting and conserving biodiversity cannot be done without looking at the economic drivers of that biodiversity loss and environmental degradation. Now more than ever, there is a need to take a much more holistic approach, taking nature into consideration, he said.

"We can no longer rely on GDP alone. It (The GDP model) has considered a contribution of nature to be free and essentially limitless throughout its history," the economist said.

The UN Statistical Commission will move to adopt the measure this week. Countries are expected to re-orient their economic reporting toward this model over time, said Harris.