SEEA 2003 Issues for Discussion World Bank Kirk

SEEA 2003: Issues for Discussion (World Bank) Kirk Hamilton khamilton@worldbank. org Giovanni Ruta gruta@worldbank. org 1

Issues n Chapter 9: Valuation techniques for measuring degradation ¡ ¡ n Distinction between monetary accounts and models Deciding on which assets to value (keeping in mind the full integration objective) Treatment of transboundary pollution Use of valuation techniques Chapter 10: Adjustments to the flow accounts ¡ ¡ Need for full integration of asset and flow accounts Depletion Establish criteria for selecting one set of options Defensive expenditures Agreement on “gross-gross” method Development of environmental debt issues 2

Distinction between monetary accounts and models n n n Value of asset damages (degradation) is naturally treated in monetary accounts Models constitute application of existing accounts to analyze policy options Examples ¡ ¡ n Maintenance costing Green economy modelling Suggestion: present models as applications in Chapter 11 3

Deciding which assets to value n n Degradation = Damage to Assets Aiming at integration of asset and flow accounts it is important to measure damage to assets ¡ ¡ Valuing clean air as an asset is not possible Valuing health impacts of air pollution is practical, but do we need a corresponding human capital value in the asset accounts 4

Ch 9: Other issues n Transboundary pollution ¡ n Fuller treatment needed Valuation techniques ¡ Need for new material on valuing morbidity and mortality 5

Depletion n Establish criteria for selecting one set of options. Options that need clarification ¡ ¡ ¡ n n A 1 -A 3 Apportioning resource rents bw Income and Depletion B 1 -B 3 Treatment of mineral exploration C 1 -C 3 Additions and deductions to asset accts D 1 -D 3 Ownership of resources E 1 -E 4 Treatment of depletion in owner’s balance sheet Choices made to be reflected in Chapter 8 Some material could be moved to Chapter 8 6

Defensive expenditures n n Do we agree on “gross-gross” method? Are there other alternatives? 7

Producing a fully integrated accounting system n Income, production and saving aggregates should have corresponding changes in asset accounts ¡ ¡ Treatment of human capital Treatment of ecosystem services as externalities thus as satellite accounts (to avoid double counting) 8

Environmental debt n n Is it useful concept? How should negative prices be treated in the system? 9

Fundamental question n n Valuation is key for policy applications, particularly in low income countries Are there any participants who believe that the revision of the SEEA should not aim for integrated accounts for income, saving and wealth in value terms? 10