Authors: Catherine A. Farrell and Jane C. Stout
Summary: The INCASE (Irish Natural Capital Accounting for Sustainable Environments) research project aims to apply Natural Capital Accounting at a pilot (catchment) scale in Ireland. This Interim Report reviews natural capital accounting approaches, data requirements for the project, catchment selection, potential applications and feasibility.
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The natural world we live in can be thought of as our stock of natural capital that yields flows of goods and services. These include the basic requirements of daily living – food, water, clean air, etc. – alongside more intangible services such as amenities and recreation. Ensuring that nature is preserved and restored so that these goods and services continue to flow for this generation, and future generations, is fundamental to human health and wellbeing.
In the Irish context, the 2016 EPA State of Environment Report highlights the need to integrate natural capital accounting (NCA, also referred to as green accounting) into our measures of prosperity, to track and measure our performance alongside related issues such as societal wellbeing and environmental health.
NCA is an approach that can help us to understand and address the dominant pressures and their impacts – climate change, growth in human population, continued degradation of nature – on Ireland’s environment. The INCASE (Irish Natural Capital Accounting for Sustainable Environments) project will work at catchment level, where significant pressures on at-risk water bodies have been well defined by the EPA and have informed the River Basin Management Plan 2018–2021.
The European Green Deal, published at the end of 2019, specifically aims to protect, conserve and enhance Europe’s natural capital and protect health and wellbeing from environment-related risks and impacts. The Green Deal states that “all EU policies should contribute to preserving and restoring Europe’s natural capital”, and the development of standardised NCA practices is highlighted as one of a range of initiatives to pursue green finance and investment.
In Ireland, the Climate Action Plan, published in 2019, sets a number of targets and highlights the need for an integrated approach to land use, taking into consideration the changing roles of agriculture, forestry, marine and energy, etc.
NCA can be used to identify trends in the quality of the environment, inform trade-offs, identify co-benefits and establish critical links between natural and other capitals (such as built and social capital), as well as identifying knowledge gaps. NCA can therefore assist in the integration of a range of sectoral policy targets (relating to nature, the environment, land use, society and the economy) and decision-making, aligning them with overarching Sustainable Development Goals.
INCASE will apply NCA using the United Nations System of Environmental-Economic Accounting (SEEA) at a pilot (catchment) scale in Ireland to inform how Ireland’s natural capital accounts (asset extent, condition, supply and use of services, benefits, etc.) can be built. Developing a system of NCA that is fit for purpose will require a range of challenges to be addressed, from high-level issues (Can nature fit into accounting methods? Is 42 the answer?) to practical data sharing and quality issues.
INCASE will explore how NCA can be used to identify solutions, through investing in and renewing degraded natural capital stocks and flows (improving water quality, restoring ecosystems, etc.) and/or through changing management practices and incentive schemes (e.g. developing payment for ecosystem services schemes). Linking biophysical information (maps with qualitative and quantitative data) with economic data, the project will inform how natural capital accounts can be used to develop better metrics for national accounting. Pioneering methods, tested and refined at catchment level by INCASE, will be developed with a view to scaling up to national level, delivering immediately useful and effective project outputs for policymakers and other stakeholders.https://www.epa.ie/media/epa-2020/publications/research/Thumbnail_322.jpg