Botswana's diamond mining sector accounts for 31 percent of the country's economic output -- and a glistening De Beers five-diamond bracelet sells online for $1,500. But how much does depleting diamond mines cut into Botswana's overall economic health?
The Philippines' untapped gold and nickel is valued at nearly $1 trillion, but the mines and refining process needed to tap them will require a great deal of water. If climate change leads to reduced rainfall in the country, how much would be lost by diverting water from agriculture?
And in Australia, the government has found that pesticides used in farming are causing significant damage to the Great Barrier Reef. But how much might that damage affect the tourist economy that thrives around the World Heritage site?
Those countries and a handful of others have been trying to answer precisely those kinds of questions as they develop some of the world's first "green" accounting systems. Known formally as natural capital accounting, the idea of measuring the economic value of clean water, clean air, forests and ecosystems in addition to traditional measures of the market value of a country's goods and services has been gaining traction since the 1980s.
In February, the U.N. Statistical Commission adopted a standardized accounting method, which advocates called a major step, essentially helping environmentalists use the same language and tools that finance ministers and economists use to measure strictly in terms of national accounts. Now, with the approach in June of the U.N. Conference on Sustainable Development in Rio de Janeiro, activists hope that green accounting's time has finally come.
"When it comes to natural capital accounting, we have been talking about it for 30, maybe even more years. This is something it is time to stop talking about and it is time to start implementing," Rachel Kyte, the World Bank's vice president for sustainable development, said recently.
The World Bank is pushing for countries at the Rio summit, commonly called Rio+20, to commit to implementing natural accounting systems alongside their gross domestic product measurements. Kyte acknowledged that questions remain about green accounting but said countries can "learn while we're doing," and argued that the data gleaned by valuing ecosystems are critical to help governments make more sustainable decisions.
Not all assets are given a value
"The lack of valuation for natural resources in the environment is one of the major reasons for the continuing decline of ecosystems," said Glenn-Marie Lange, a senior environmental economist at the World Bank who leads a partnership known as WAVES (Wealth Accounting and Valuation of Ecosystem Services) aimed at helping countries develop and implement natural accounting systems.
"For decades, GDP has been growing and growing in many countries, but a large segment of society hasn't been getting any better off," said John Talberth, a senior economist at the World Resources Institute. "I think we've reached a critical threshold where international consensus said we really need to move in a more deliberate and systematic manner to get better accounts up and running that reflect the true state of the economy."
Those who are already trying it say natural capital accounting is slow going but they expect it to be rewarding. Australia, for example, already has a program of annual environmental accounts for water, energy, natural resources and timber, as well as subsoil assets like coal. Now it's starting to look at assets like the Great Barrier Reef to better understand what degradation caused by agriculture or climate change might mean for the country as a whole.
"The Great Barrier Reef is a natural ecosystem and supports a huge tourism industry. But what is the value of the Great Barrier Reef? We're not really sure," said Michael Vardon, director of the Australian Bureau of Statistics Centre of Environment and Energy Statistics. Upstream, he noted, farmers are making decisions that are rational for their livelihoods -- using pesticides and fertilizer, for example -- and it's clear that those decisions are corroding the world's largest coral reef system.