Natural Capital Accounting for Policy—A Global View of Achievements, Challenges, and Prospects

Abstract

Natural capital accounting (NCA) has been used in all phases of the policy cycle and incorporated into the policy machinery of several governments. Uses range from the monitoring of sector-based policies, like water, energy, and forests, to more complex areas of implementing or analyzing cross-sectoral policies for green growth and climate change. Countries like the Netherlands, Sweden, and the United Kingdom, which have had NCA programs for many years, have developed the capacity and relationships between the users and producers of accounts to enable more effective use of the accounts in policy processes. While it takes time to produce NCA with the full range of functions, countries with relatively new programs have also had achievements in applying NCA to decision making, for example, in setting prices for water and energy, as well as in enriching national, sectoral, and regional planning. There are several challenges to introducing NCA into the policy process, including the prevailing policy focus on the short term (limited policy readiness for change), acceptance of the information (its perceived credibility and trustworthiness), communication of complex information, alignment of NCA supply with NCA demand, ensuring collaboration and understanding among diverse professions and institutions, and maintaining high-level support. The many opportunities for using NCA include the Sustainable Development Goals (SDGs), green growth, climate change, the intended nationally determined contributions (INDCs), and sector policies (for example, water, energy, and forests). The assessment of experience to date has enabled the identification of 10 “living principles” to ensure that NCA is policy ready. The principles are grouped under four headings— comprehensive, purposeful, trustworthy, and mainstreamed—and can be tested and revised. The next steps are to work together to develop more thematic applications of NCA, especially to realize the opportunities identified, as well as to develop practical guidance documents.