WAVES Annual ReportThe global partnership on Wealth Accounting and the Valuation of Ecosystem Services—WAVES—kicked off the start of their third year with a packed room of ministers and senior policy makers from 40 countries committing to scale up efforts to use natural capital accounting (NCA) to address their most pressing development challenges.

That momentum continued throughout the year, according to the WAVES 2014 annual report, as WAVES saw an expansion of countries, results of the first accounts emerging, and the links being made with policies and institutions. A growing global community of practice on NCA is coming together to deploy the tools of NCA on the ground, while raising awareness globally on the concept of looking “beyond GDP” for a more complete picture of growth and well-being.

“What sets WAVES apart is its focus on institutionalizing and encouraging multiple organizations to work together as a team,” said Alexander Martinez, the assistant director of environmental sustainable development for Colombia’s National Planning Department. Martinez was one of several practitioners in the field who offered first-hand experience implementing NCA in the report.

WAVES also made headway operationalizing NCA within the World Bank in the past year. For the first time, wealth measurements are bring mainstreamed within the Bank’s own measurements system. Demand is also growing for using Adjusted Net Saving (ANS) and wealth accounts in resource-rich countries, such as in Mauritania where World Bank Country Economist worked with the government to produce a wealth account in 2013.

Highlights from the Annual Report include:

WAVES Core Countries Growing: The WAVES core implementing countries grew to eight with the addition of Guatemala, Indonesia and Rwanda. In February 2014, the WAVES steering committee endorsed a strategy to expand the total to 15 or more, as funding allows over the next two years.

Work plans advancing: Each of the original five WAVES core implementing countries—Botswana, Colombia, Costa Rica, Guatemala, Madagascar and the Philippines—finished their preparation phase, which focused on setting up institutional mechanisms, identifying policy entry points and developing a road map for NCA.

A growing global community on NCA: Several workshops were held at which experts and government officials worked side-by-side, learning to construct accounts as part of a growing community of practice on NCA. WAVES worked with country partners, several UN agencies, statistical offices, nongovernmental organizations, universities, and donor partners to nurture this community and build synergy.

Progress on developing methodologies for ecosystem accounting: The Policy and Technical Experts Committee (PTEC), a multidisciplinary body set up under WAVES that helps develop internationally agreed guidelines for ecosystem accounting, conducted training courses in ecosystem accounting and is working with partners to implement pilot ecosystem accounting beyond the eight WAVES countries. PTEC also oversees the compilation of evidence on the policy applications of NCA, and this year completed a study covering 12 countries that demonstrates that environmental accounts are policy relevant.

Private sector work is moving ahead: Working with the Natural Capital Coalition (formerly the TEEB for Business Coalition), the International Finance Corporation (IFC) is leading the World Bank Group’s effort for the private sector to develop a broad protocol that could serve as a template for NCA in the private sector. This would be similar to the UN System of Environmental-Economic Accounting (UN SEEA) for governments.

Communicating NCA is increasing outreach: Over 2013–14, WAVES expanded its reach to a large and diverse global audience via their website, e-newsletter, and social media. Since the newsletter’s launch, both the number of visits—and visitors—to the WAVES website doubled compared to the previous year. A Spanish version of the WAVES website was recently launched to increase reach to countries in Latin America.

WAVES is in the process of developing an online knowledge platform, partnering with the London-based International Institute for Environment and Development (IIED), to support and provide momentum to WAVES partnership countries and global stakeholders. In Botswana, Colombia, Costa Rica, Guatemala, Madagascar, and the Philippines stakeholders came together to exchange ideas about NCA. Through IIED, WAVES will be developing targeted communications strategies for all the core WAVES countries.

Results of accounts and their links to policy are emerging in WAVES Countries

  • Botswana: The first phase of water accounts were well received by the President’s Botswana Economic Advisory Council (BEAC) and a second phase has begun. Preliminary accounts for minerals and fiscal policy are being reviewed, and scoping studies for ecosystem and energy accounts are underway. The importance of NCA as a tool for better decision-making in Botswana was emphasized in the mid-term review of the 10th National Development Plan, and in the president’s State of the Nation address to Parliament. NCA will be mainstreamed in the National Development Plan 11 that is being discussed and finalized now. A unit for water accounting is now included in the restructuring plan of the Department of Water Affairs.
  • Colombia: Work began on the Laguna de Tota watershed, the first among three pilots that will culminate in national water accounts. Colombia is also developing a national forest account, starting with forest land and timber accounts and moving toward including forest ecosystem services. Colombia now has a policy on integrated environmental management for Laguna de Tota that mandates developing indicators emerging from WAVES work.
  • Costa Rica: Work started on water and forest accounts. In December 2013, a law was introduced that will require all environmental clearances to include NCA. Two full-time technical officers from the Central Bank of Costa Rica have now been dedicated to work on NCA.
  • Guatemala: Accounts for water, forests, and energy were updated and presented at the Guatemala WAVES program launch in March 2014. WAVES will support Guatemala in taking this work forward, institutionalizing and applying NCA to policy.
  • Madagascar: Madagascar has begun work on water accounts at the river basin level, forests in protected areas, and minerals. The recent election in Madagascar clears the way for discussions on the institutionalization of NCA.
  • Philippines: Work began on ecosystem accounting with several consultations and workshops for two pilot sites: Laguna Lake Basin and Southern Palawan. Mineral accounts are being developed and mangrove accounts are planned for next year, with increased national interest following the destruction from cyclones in the past year. The Philippines National Statistics Office is hiring staff to work on NCA full time.

Looking Ahead

A key lesson learned about implementation of NCA through WAVES is that many developing countries need sustained country-level technical assistance combined with “communities of practice” for successful institutionalization. Another key lesson is that it needs to be driven and led by planning/development or finance agencies.

Moving forward, WAVES will continue to develop regional communities of practice for NCA to meet the needs of all partner countries, and complementing the intensive country-level work in the core-implementing countries.