LONDON (Reuters) - Britain will urge businesses and governments to start accounting for natural capital as an additional way of measuring economic activity at a U.N. sustainability summit in June, its environment minister said on Thursday.
This could mean moving towards a concept of GDP+, or measuring the use or loss of natural resources like water, agriculture and forests to gauge economic activity, in addition to relying solely on economic output.
“A snapshot of the state of economies based on GDP (gross domestic product) is too narrow,” Caroline Spelman told reporters after a speech to businesses and non-governmental organisations on the UK’s aims for the Rio+20 summit.
“Green accounting would work for all countries. We believe you can really drive significant ‘greening’ if you take proper account of the value of natural capital in your government accounts,” she added.
Currently, governments compile national accounts to track the activity of their economies and the data is used to calculate economic indicators like GDP.
Some countries have experimented with environmental accounting over the past 20 years, but there is no international consensus on a standardised method of doing it.
Representatives from around the world will gather in Rio de Janeiro in June to try to hammer out sustainable development goals at the Rio+20 conference, named after a ground-breaking meeting in the Brazilian city 20 years ago.
A draft negotiating text has been criticised for being too vague and Spelman said it “lacks focus and ambition.
“We would like to supply some content to some of these sustainable development goals. Accounting for natural capital is one of the tools to be put in place to achieve them,” she said.
“What nature provides for free is a cost to the economy if it is not there.”
If there were no pollinators - creatures such as bees that enable flower fertilisation - it would cost the UK economy 400 million pounds a year to substitute them, she added.
The UK government is setting up a committee that will report on the state of England’s natural capital and the UK’s Office of National Statistics is trying to embed natural capital in the country’s environmental accounts by 2020, Spelman said.
“The long term goal of a more integrated set of accounts for the UK is ambitious, but necessary,” said Alan McGill, partner at PriceWaterhouseCoopers.
“At the moment, we’re measuring growth, but not impact, and a new reporting model will give us a more complete picture.”
Editing by Anthony Barker