WAVES stands for Wealth Accounting and the Valuation of Ecosystem Services. The WAVES Global Partnership Program (WAVES-GPP) is a global partnership that aims to promote sustainable development by ensuring that accounting for natural resources is mainstreamed into development planning. The Philippines has been selected as one of the eight core implementing countries of the Wealth Accounting and Valuation of Ecosystem Services Global Partnership Program.
Phil-WAVES
FAQs
Wealth Accounting and the Valuation of Ecosystem Services
Wealth Accounting measures three forms of assets and capital goods that a country generates: 1. Manufactured capital such as buildings and public infrastructure; 2. Human, social and institutional capital, such as a country’s level of education, rule of law and governance; and 3. Natural capital such as land, forests, fish, minerals and energy.
Countries rely on GDP as a measure of its economic performance. However, GDP only measures current income and production. It tells us nothing about income for the long term. It does not answer questions like: are income and growth sustainable? Will the same level of income be available for our children?
GDP says nothing about the assets that underpin this generation of income. For example, when a country exploits its minerals, it is actually depleting wealth. The other major limitation of GDP is the poor representation of natural capital. Important contributions to the economy and well-being of the environment provided by forests, wetlands, and agricultural land are not fully captured in national accounts or may be hidden.
Natural capital includes the resources that we easily recognize and measure such as minerals, agricultural land and fisheries. It also includes ecosystems producing services that are often ‘invisible’ to most people such as air and water filtration, flood protection, and habitat for fisheries and wildlife. We often take these services for granted and do not know what it would cost if we lose them.
Natural capital is a critical asset, especially for low-middle income countries like the Philippines where it makes up a significant share (about a third) of total wealth. For these countries, livelihoods of many subsistence communities depend directly on healthy ecosystems.
Comprehensive wealth accounting can provide an estimate of the total wealth of nations by measuring the value of these different components of wealth. Changes in wealth is an indicator to assess if a country is growing its income without depleting its stocks.
A more sustainable use of natural resources could potentially have a large impact on growth through reducing poverty and risks from natural disasters and climate change.
In the Philippines, there will be two Phil-WAVES pilot sites: Laguna Lake Basin and Southern Palawan. The NCA data gathered will help in assessing the multiple and sometimes competing uses of the natural resources in these areas and provide detailed statistics on how to manage these resources and ensure they continue to contribute to the sustainable growth of the economy.
The Phil-WAVES project is being led by the National Economic and Development Authority and the Philippine Statistics Authority (PSA) through a technical assistance grant given by the World Bank.
Natural Capital Accounting
Natural capital includes all of the resources that we easily recognize and measure, like minerals,energy, timber, agricultural land, fisheries and water. It also includes the ecosystem services that are often “invisible” to most people, such as air and water filtration, flood protection, carbon storage, pollination of crops, and habitats for wildlife. These values are not readily captured in markets, so we don’t really know how much they contribute to the economy. We often take these services for granted and don’t know what it would cost if we lost them.
Gross Domestic Product (GDP) measures the value of goods and services produced over one year. This is an incomplete assessment of a country’s economic well-being because GDP only looks at one part of economic performance—output— but tells us nothing about income in the long term. GDP doesn’t take into account the wealth underpinning this output. For example, when a country exploits its minerals, it is actually using up its finite mineral wealth.
Natural Capital Accounts (NCA) are sets of unbiased data for material natural resources, such as forests, energy and water. NCA follow an international standard approved by the United Nations Statistical Commission, called the System for Environmental-Economic Accounts (SEEA).
Countries already produce data-sets based on the internally agreed System of National Accounts (SNA). These data-sets describe a country’s economic performance, and form the basis for calculating GDP and other well-known economic indicators, such as balance of trade and household consumption. While national accounts are limited to the production boundary of the economy, natural capital accounts go beyond that, to account for natural goods and services that aren’t subject to market transactions and don’t necessarily have well established market prices.
Natural capital includes the resources that we easily recognize and measure such as minerals, agricultural land and fisheries. It also includes ecosystems producing services that are often ‘invisible’ to most people such as air and water filtration, flood protection, and habitat for fisheries and wildlife. We often take these services for granted and do not know what it would cost if we lose them.
Natural capital is a critical asset, especially for low-middle income countries like the Philippines where it makes up a significant share (about a third) of total wealth. For these countries, livelihoods of many subsistence communities depend directly on healthy ecosystems.
Natural capital accounting can provide detailed statistics to better manage these natural resources and ultimately ensure sustainable growth of the economy.
The Wealth Accounting and Valuation of Ecosystem Services (WAVES) is a global partnership, announced by World Bank President Robert B. Zoellick in Nagoya, Japan, in 2010. It supports countries preparing to implement Natural Capital Accounting based on the SEEA.
WAVES comprises the United Nations Environment Programme, the UN Development Programme, and the UN Statistical Commission; the countries of Botswana, Colombia, Costa Rica, Guatemala, Indonesia, Madagascar, the Philippines and Rwanda; as well as donors and supporters, including Australia, Canada, France, Japan, Norway, the United Kingdom, and several NGOs. These partners want to take Natural Capital Accounting beyond just material resources, such as timber and minerals, as approved by the SEEA. They also want to include ecosystem services - such as forests for pollination and wetlands for reducing flooding - and other natural resources that are not traded or marketed, and are therefore harder to measure. A Policy and Technical Experts Committee, following the processes set up by the UN Statistical Commission, was established to take this forward.
As recently as 2010, NCA was mostly limited to high-income countries. Since then, WAVES has demonstrated that it is possible to do accounts in developing countries and to use them to inform national development plans and policies. Many partner agencies and middle-income countries have now started their own NCA initiatives.
In all eight of the WAVES countries (Botswana, Colombia, Costa Rica, Guatemala, Indonesia, Madagascar, the Philippines and Rwanda), NCA work is guided by a high-level National Steering Committee chaired by a Ministry of Development Planning or Finance. In most of the WAVES countries, governments have dedicated resources and staff in key agencies to implementing NCA, and results from these accounts are influencing national strategies. For example, water accounts in Botswana have been identified as an important tool for water sector reforms, while mineral accounts are helping to develop fiscal rules on management of mineral revenues.
WAVES also contributes to the development of NCA methodologies, notably by leading a process of testing ecosystem accounting, and providing guidance and capacity building for implementation. In terms of building awareness and understanding of NCA, the WAVES newsletter and website report NCA activities globally, and the recently launched Knowledge Center provides resources for individuals and countries.
Southern Palawan
Southern Palawan is an area that is highly mineralized, has rich levels of biodiversity, relatively rich fishing grounds supported by extensive mangrove forests, seagrass beds and coral reefs. The area is home to a number of indigenous tribes with strong potential for conservation, tourism and agriculture.
Southern Palawan was selected as one of the two test sites for the Phil-WAVES project because of the competing demands on its natural capital including biodiversity where ecosystem accounting following the ridge-to-reef approach can be demonstrated in an island setting.
Laguna Lake
Ecosystems are an intricate web of interdependence between humans and nature. We depend on ecosystems for our basic needs such as food, water and fuel. We also use its natural resources to drive our economies.
Some of these resources are reflected in our country's GDP. But services naturally provided to us by a healthy, well-functioning ecosystem such as food control, air and water filtration and soil erosion prevention are neither quantified nor assessed for their economic value.
Ecosystem accounting is a way of accounting for the all the benefits--both concrete and intangible--that ecosystems give us. In accounting for all the value nature provides us, we can manage these resources more sustainably and leave a healthier planet for future generations.
The framework of ecosystem accounting is based on the System of Environmental-Economic Accounting (SEEA), an internationally agreed standard of concepts, denitions, classications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy
True, but this is the first time that we have scientific evidence-based information that will tell us two things: the degree of deterioration and which parts of the lake are most affected.