BC3-UPV/EHU Seminars: Green accounting in a multi-sector model with terrestrial ecosystems

BC3-UPV/EHU Seminars
“Green accounting in a multi-sector model with terrestrial ecosystems “

Itziar Ruiz de Gauna Ruiz de Loizaga

Instituto de Políticas y Bienes Públicos, CSIC

Abstract

There is an increasing interest in extending national accounts to ecosystem services not recorded by official accounting systems but that are relevant to society, such as biodiversity conservation or public recreation. However, theoretical and applied green accounting analyses are not completely consistent, especially for the case of terrestrial ecosystems. First, most theoretical literature has so far assumed that forests are made up of a single species and that its growth is instantaneous, obtaining the result that it is enough to use information for the current year. On the contrary, the SNA and the SEEA recommend the use of future values. Our analysis show that using values for the current year only holds for strong and probably unrealistic assumptions. Second, many applications calculate the value of market goods and services using exchange values and then estimate consumer surplus for non-market ecosystem services. The SNA and the SEEA do not use of consumer surplus and theoretical interpretations of Net National Product as a welfare indicator also take it out. Our results confirm that non-market ecosystem services should be incorporated into national accounting using exchange values. We extend the analysis to cover a monopoly and a monopolistic competition. The latter markets structures are especially relevant for the recreational use of National Parks which are unique. We also present the empirical results of the valuation of public recreation in two types of forests in Spain, comparing compensating variation estimates and exchange values for the same valuation exercise.