Post-COVID19 recovery must bank on nature

The 5th Policy Forum on Natural Capital Accounting for Better Decision Making, attended online by more than 330 participants, recognized that the pandemic has changed the world. The Forum asserted that government spending, policies and management of the economy must now tackle a breadth of pressing challenges such as climate change, biodiversity conservation and attainment of the Sustainable Development Goals – and that Natural Capital Accounting (NCA) can help.

Prof Diane Coyle’s  keynote showed that, while most recovery spending has been “grey” rather than “green”, there is increasing public appetite for resolving climate and nature crises alongside post-COVID recovery, and governments are beginning to seek more holistic recovery responses. Highlighting the need for aggregate measures that reveal a better picture than GDP alone, she emphasised how the System of Environment-Economic Accounts (SEEA) provides metrics that can directly link to the policy instruments of government and that support the broader movement towards wealth accounting.

Progress in NCA around the world holds promise for greener recovery

Egypt’s Minster of Environment, Dr Yasmine Fouad, said Egypt sees green recovery as both an urgent need and a multi-faceted challenge – through which she sees NCA guiding governments. “Nature-positive policies, which are good for nature and deliver economic growth at the same time, can support a green recovery” said Juergen Voegele, Vice President for Sustainable Development at the World Bank, speaking at the high-level panel discussion. In the discussion, Juergen Voegele and Eliot Harris (United Nations) both emphasised that we now have a common language and approach in NCA for integrating environmental issues in economic decisions, but we still need to build understanding and trust in the accounts so that their full potential is realized.

The case for linking NCA and green recovery was powerfully made in the presentation of a report by PBL Netherlands Environment Assessment Agency, exemplifying how accounting can address all stages of green recovery decision-making. Evidence of progress was provided from [more than] 20 examples presented by colleagues around world – from Australia, Brazil, Colombia, Costa Rica, France, India, Ireland, Liberia, Mexico, Mozambique, Nigeria, Peru, Rwanda, South Africa and Uganda. Participants urged that such examples, even if tentative, should be used to persuade others to join the growing NCA and green recovery communities. Tools that have been tracking the recovery across many countries were showcased by the OECD (revealing promising signs that some recovery spending is shifting from “grey” to “green”) and the Green Economy Coalition (which tracks countries’ use of NCA and formation of  natural capital committees as two of the 21 core green recovery policies).

Approaches to NCA are evolving rapidly and participants learned of several technical developments. On developing accounts, the United Nations provided details of the roll-out of NCA capacity building; and the “ARIES for SEEA” tool demonstrated how existing data sources and technology can be harnessed to accelerate account production even in low-capacity countries. On using accounts, the World Bank exhibited modelling using NCA data that supports public policy and investment decisions by business and donors.

The World Bank’s Global Program on Sustainability (GPS) integrates environmental and other sustainability considerations into public and private decisions, by providing policy makers and the financial sector with the necessary metrics and tools. GPS is using a systematic approach to measure the contribution of natural capital to a country’s development to help shift investment towards sustainable growth, support post-COVID recovery, and address biodiversity loss and climate change crises.

Looking forward – NCA helping decisions for people and nature to thrive together

Such a wealth of material inspired rich discussions in 10 breakout sessions. These generated not only many ideas for advancing NCA for green recovery, but also calls for the forthcoming Conferences of the Parties of the UN Framework Convention on Climate Change and the Convention on Biological Diversity to accept the clear case that NCA is a core means for achieving their aims. Common threads in discussion were the imperative to increase funding and capacity for both producing and using NCA; to link accounts more with the analyses and modelling being used to make green recovery decisions; to build understanding and trust in the accounts; and thus, to embed NCA in the machinery of government. To institutionalise NCA, involvement of Ministries of Finance will be critical as they come to see how NCA can help in tough recovery decisions on taxing, borrowing, and spending – integrating NCA across the ‘fiscal triangle’.

The Forum concluded with enthusiasm for the NCA and green recovery communities to continue to work together. Integration, coordination, and shared understanding are essential and SEEA gives us a common language for better, more coherent management of economy and nature. COVID19 has been devastating, but also provides an opportunity to resolve long-standing social, economic and environment problems. As the Forum’s keynote and high-level panellists asserted, the consequences of maintaining the status quo are dire, but NCA is working and can guide our decisions. It offers better information on where we stand today, and what policy options will work in the future, so that people and nature can thrive together.