Presentation of Dr. Tonie Balangue, President and Executive Director Resources, Environmental and Economic Center for Studies, Inc., on "Green Accounting" during the UP Manila Conference on Global Climate Change, October 22-23, 2009, Pearl Garden Hotel, Manila.

1. GREEN/ENRA ACCOUNTING Tonie O. Balangue, PhD President and Executive Director Resources, Environmental and Economic Center for Studies, Inc. Quezon City, Philippines WWW.REECS.ORG

2. OUTLINE Objectives GDP as a measure of economic welfare What is Green/ENRA accounting? Framework & methodology of green accounting The Philippines’ experience: Forest Resources Policy implications Flying over the forestlands of the Philippines

3. 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

4. Green/environmental accounting Scorekeeping and management of green resources’ depletion and appreciation in physical stocks and economic values and integration to national accounts. 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.

5. GREEN RESOURCES VALUATION : A MUST IN GREEN ACCOUNTING

7. COASTAL PROTECTION FOREST INDIRECT USE VALUE OF FOREST AS A WATERSHED RECHARGE

9. 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)

10. GREEN RESOURCES NIA/GDP MAN-MADE CAPITAL NATURAL CAPITAL GREEN RESOURCES ARE JUST SOURCES OF RAW MATERIALS TO BE USED IN THE PRODUCTION OF MAN-MADE CAPITAL

11. GREEN/ENRA ACCOUNTIN G GREEN RESOURCES NIA/GDP Inputs, outputs, finished products, recycled products, wastes, emissions MAN-MADE CAPITAL NATURAL CAPITAL GREEN RESOURCES ARE PART OF THE WEALTH OF A NATION. THEREFORE, SHOULD BE INTEGRATED INTO THE NATIONAL ACCOUNT

12. 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

13. Coverage of ENRAP Studies (1-4) Forests Wildlife and protected areas Rattan Bamboo Soil/land Fisheries Pollution Wastes Health impacts

14. Physical (area & volume) and Economic Accounting Methodology

15. 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 Bn Pines : - 0.06 MnCum/PhP0.082 Bn Rattan : - 151.16MnLm/PhP0.12 Bn Mangroves : -0.21 MnCum/PhP0.045 Bn FOREST DEPRECIATION: - PhP29.17 Bn (1970-1989) Green/ENRA Accounting Results

18. POLICY RECOMMENDATIONS Protection and sustainable management of remaining forest types. 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 More green resources biomass growth and build up (area and volume, forest types). Better environmental services (carbon sink, water, soil and soil nutrients build up, clean air, cooler temperature). Higher economic value of green resources. Appreciation of the adjusted GDP/NDP

20. Localize green accounting to guide LGUs in their investment portfolio in the environment and natural resources sector.

21. 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.What’s next?

22. Forest depletion as of 2003