Plenary talk at ACEAS Grand Workshop 2014.

1. Environmental-Economic Accounting:
A Transdisciplinary Synthesis
Dr. Michael Vardon
Director
Centre of Environment Statistics
Australian Bureau of Statistics
michael.vardon@abs.gov.au
Science Making Sense
Australian Centre for Ecological
Analysis and Synthesis
Shine Dome, Canberra
7-9 May 2014

2. Environmental–economic accounting
is a synthesis of disciplines
• The accounting model is formed from
established concepts in
– Physical sciences (including ecology)
– Economics
– Accounting
– Statistics
• The use of national (economic)
accounting in public policy is
entrenched – can we do the same for
environmental accounting?

3. The three key concepts of
environment accounting
1. Stocks and flows (or assets and
services)
2. Physical (e.g. tonnes, litres, parts per
million) and monetary ($) measures
3. Benefits (when and where?) and
beneficiaries (who?)
Classifications!
Volume
(e.g. m3, ha)
Value
(e.g. peso, $)
Stocks E.g. National
parks
E.g. land
Flows E.g. Water
extracted for
agriculture
E.g. GDP

4. What is an accounting approach?
• Accounting is about telling stories that are
comprehensive, integrated, coherent and
repeatable
• Stories are founded on defined relationships
between stocks and flows
• The measurements and relationships are
presented in physical and monetary terms
• Derivation of aggregates is an outcome of
defined relationships and the use of
common measurement units

5. Inland Water Resources
Water Supply
Sewerage
Households
ElectricityMining Manufacturing*Agriculture
Other industries
? ?
?934448412334?
?
? ?
722
715 336 44841 320 172
3391433267
3626
944228
?
?
?
515
Australia – physical water supply and use, 2008-09 (GL)
1594
79
9336
103 9277 87
?
2
The Sea
1163
Key
Wastewater
Water
Reuse water
33
* Note shown is the supply of distributed water and reuse water by mining and manufacturing, 25 GL in total.

6. Inland Water Resources
Water Supply
ISIC 36
Sewerage
ISIC 37
Households
Electricity
ISIC 35
Mining*
ISIC 5-9
Manufacturing*
ISIC 10-33
Agriculture
ISIC 1
Other ISIC
2,3,38,39, 45-99
6 1406
??????
3
21 208
?
? ? ? ? ?
490153406
?
122977
7
?
?
?
Australia – monetary water supply and use, 2008-09 (million AUD$)
3074
?
?
? ??? ?
3316
?
The Sea
?
Key
Wastewater
Water
Reuse water
* Note shown is the supply of distributed water and reuse water by mining and manufacturing, 25 GL in total. No monetary available for these.

7. Integrated indicators
 Majority of environmental pressure indicators increased:
 waste (147%), energy (22%), GHG (25%)
 Water consumption fell significantly (-31%)
 Economic production (GVA) rose 66%
 The population increased 23%

8. Why do accounting?
• Links the environment to the core of economic
information and hence can make environmental
and economic trade-off more apparent
• Takes the array of information currently available
from a range of sources and synthesizes it to a
regular set of accounts – see where information is
weak or missing
• Regular information

9. Why do accounting?
• Links the environment to the core of economic
information and hence can make environmental
and economic trade-off more apparent
• Takes the array of information currently available
from a range of sources and synthesizes it to a
regular set of accounts – see where information is
weak or missing
• Regular information

10. Accounting for the times
• 1929 The Great
Depression
• 1936 Keynes Theory of
employment, interest
and money
• 1939 World War II
• 1953 System of National
accounts(-> 1968, 1993,
2008)
• 1993 System of
Environmental-Economic
Accounting (-> 2003,
2012)
http://phys.org/news202476529.html

11. Accounting for the times
• 1929 The Great
Depression
• 1936 Keynes Theory of
employment, interest
and money
• 1939 World War II
• 1953 System of National
accounts(-> 1968, 1993,
2008)
• 1993 System of
Environmental-Economic
Accounting (-> 2003,
2012)
http://phys.org/news202476529.html

12. The System of Environmental-
Economic Accounts (SEEA)
• Part of the international statistical system
• Evolved from the System of National Accounts
• Several parts of the SEEA
– SEEA Central Framework (2012)
– SEEA Experimental Ecosystem Accounting (2013)
– SEEA Applications and Extensions (2014)
– SEEA-Water (2007)
– SEEA-Energy (in development)
– SEEA-Agriculture (in development)
http://unstats.un.org/unsd/envaccounting/seea.asp

13. Audiences and information
Information
Information users
Data items
SEEA
Accounts and tables
Indicators
Decision makers & wider public
Managers
and analysts
Researchers
Headline indicators
Indicators on
specific subjects
or industries

14. It is being done
ABS Energy Account
Physical and monetary SUT
ABS Australian
Environmental - Economic
Accounts
(Annual)
National Accounts
Data
Natural resources on
National Balance Sheet
(Annual)
ABS Experimental Land
Accounts
ABS Water Account,
Australia
Physical and monetary SUT
ABS Experimental Waste
Account
National Carbon Account
(Dept. of Environment)
ABS Input-output analysis of
energy and greenhouse gas
emissions
Researching ecosystem
accounts
Biodiversity, Carbon,
Ecosystem condition
ABS, SEWPAC, BOM, DCCEE, DAFF
Murray-Darling Basin Authority,
Victorian government
South East Queensland CMA
Wentworthgroup and universities
Research for expanding the
accounts produced and
methodology
Environmental Taxes and subsidies,
environmental protection expenditure,
as well as valuation methods
National Water Account
Physical asset account
(Bureau of Meteorology)
http://www.abs.gov.au/ausstats/abs@.nsf
/mf/4628.0.55.002
DEPI Experimental
Ecosystem Accounts
(Victorian government)
DEPI Victoria Water Account
(Victorian government)
http://www.abs.gov.au/ausstats/abs@.nsf/mf/4610.0
http://www.abs.gov.au/ausstats/abs@.nsf/mf/4609.0.55.001
http://www.abs.gov.au/ausstats/abs@.nsf/mf/4609.0.55.002
http://www.abs.gov.au/ausstats/abs@.nsf/mf/4609.0.55.003
http://www.abs.gov.au/ausstats/abs@.nsf/mf/4604.0
http://www.abs.gov.au/ausstats/abs@.nsf/mf/4609.0

15. Measuring
ecosystems and the economy
• Measuring ecosystems is complex because of the many
biophysical interactions within individual ecosystems, the
many interactions between ecosystems, because
ecosystems operate at multiple scales (local, national,
global), and because ecosystems exhibit a high degree of
natural variation over differing time scales.
•
Measuring the economy is complex because of the many
interactions within individual economic units, the many
interactions between economic units, because economic
units operate at multiple scales (local, national, global), and
because economic units exhibit a high degree of variation in
their behavior and structure over differing time scales.

16. Remote censing (e.g. satellites)
• Land cover
• Rainfall
• Temperature
• Geography (mountains, plains, coasts, etc.)
Scientific studies/research
• E.g. Species distribution and abundance
Administrative sources
• Land title offices
• Business registers, Tax data
• Development applications
• Environmental Impact assessments
Annual reports from business
Statistical surveys/census
– Population census
– Agricultural surveys, etc.
Data sources for environmental
accounting

17. Lessons learnt
• Cooperation is essential – between agencies and
between professions (e.g. ecologists, economists,
accountants, statisticians, etc.)
• Spatial data and spatial manipulation of data are
needed
• Experimental or pilot studies are useful for developing
methods, building capability and demonstrating how
accounts can be used
• Need to focus on repeatability (i.e. the regular
production of accounts)
• There will be criticism – the work necessarily requires
trade-offs between accuracy and frequency (especially if
annual production is the aim) as well as fitting imperfect
data to the accounting tables
• Need to explain the application of accounts to public
policy to potential users

18. Acknowledgements
A large number of people and agencies are
contributing to the development of environmental
and ecosystem accounting in Australia
• Commonwealth agencies
– Department of Environment, Bureau of Meteorology,
Great Barrier Reef Marine Park Authority, Department of
Agriculture, CSIRO, National Water Commission
• State Governments
– Victorian, Queensland
• Universities
– Australian National University, University of Queensland,
Monash University and University of Melbourne
• Wentworth Group of Concerned Scientists