Challenges and opportunities in institutionalizing natural capital accounting in developing countries

The concept of accounting for natural capital has been around for more than 30 years. A major step towards standardizing approaches came with the adoption of the System of Environmental-Economic Accounts Central Framework (SEEA) in 2012 by the UN Statistical Commission and later publication in 2014 of the Experimental Ecosystem Accounting Framework. The SEEA expands the boundaries, and is compatible and consistent with the System of National Accounts (SNA). It offers an approved international statistical standard for collecting and analyzing data to account for natural resources such as minerals, timber, and fisheries and linking them to national accounts and the broader economy. In turn, it provides the basic source of information required to build Integrated Environmental-Economic models to inform policies towards sustainable development. However, country implementation has not necessarily been at par with methodological developments and thus the challenge ahead is about institutionalizing natural capital accounting. The Global Partnership on Wealth Accounting and the Valuation of Ecosystem Services (WAVES), led by the World Bank, has been working for almost five years to promote sustainable development by incorporating the physical and economic values of natural capital in decision making based on the SEEA framework. Now, WAVES is at a point in which it can start to compile experiences and lessons learned on institutionalizing natural capital accounting as a tool to inform policy dialogue and decision making. The paper provides a conceptual framework to analyze the key challenges and opportunities for institutionalizing NCA and explores in a more systematic way the lessons learned during implementation in specific country cases studies, especially in those in which accounts have been instrumental in policy decisions.