Environmental Accounts Information Paper

The Australian Bureau of Statistics has released a useful information paper: "What are Environmental Accounts?". This discusses applying an accounting approach to integrate environmental data with economic and social data. I don't agree with the ABS assertion that an accounting approach necessarily brings greater discipline to the organisation of data. The recent global financial crisis, brought about by companies not knowing what liabilities they have, suggests accounting has a disastrous lack of rigour. However, the ABS provides a useful overview of environmental measurement for social planning, plus a List of economic Accounting reports.

Environmental science has detailed measures to try to assess the uncertainty of the data they collect. These do not always work. At Griffith University I studied global environmental models, such as the Club of Rome study "Limits to Growth" (1972); these suggested the world as we know it should have ended decades ago. The models were wrong and the world survived.

The difficulty is not with data from nature which can be measured with instruments, but the assumptions about human behaviour in response to that data. This is the most difficult part with environmental accounts, but the most important. As the ABS points out, government policy is shifting to an integrated approach considering the economy, society and the environment together.

In my own recent work, commissioned by the Australian Department of Environment, on how to reduce ICT energy use, I have pointed out the need for better measures of the energy use of the ICT sector in Australia (and therefore its contribution to greenhouse gas emissions). However, knowing how much energy is used will not necessarily reduce climate change. The actions I propose depend on the behaviour of people. At one extreme it depends on convincing individuals to turn off their computers when they are not using them, and at the other of convincing the Australian Government to buy energy efficient computers for the public service and schools. The resulting change in energy use can be measured, but there are is no perfect way to predict the behaviour of a person, or a government.

Some examples the ABS provides:

1. Accounting for Nature : A Model for Building the National Environmental Accounts of Australia, from the Wentworth Group of Concerned Scientists
2. National Water Accounts, from the The Bureau of Meteorology
3. Australia's National Greenhouse Accounts, from the Department of Climate Change)
4. Water Account, Australia, Australian Bureau of Statistics

... Environmental-Economic Accounts:

• enable the relationships between the environment and the economy to be analysed and understood, including understanding environmental and economic dependencies and outcomes;
• present environmental data using a framework that is consistent with broader economic data, such as those compiled in accordance with the widely used economic accounting framework, the System of National Accounts;
• show the distribution of environmental resources across different parts of the economy, which supports more targeted policy development;
• follow internationally accepted guidelines and facilitate international comparisons; and
• provide a system into which monetary valuations of environmental assets and environmental-related flows can be incorporated with physical data, so that monetary implications of environmental actions can be considered...
  

From: "What are Environmental Accounts?", ABS, Information Paper

4655.0.55.001 , 19 September 2008