C. Developing database
State of Environment (SOE) is a document which depicts a holistic picture of a country’s environmental status and also indicates its future trends. Thus, it assists the policy-makers to a great extent in the process of policy formulation and decision making. In many countries, the environmental legislative framework incorporates SOE and delegates the responsibility of preparing it to an apex environmental body of the country. For example in Nepal, though environmental legislation is silent about SOE, Ministry of Population and Environment (MoPE) has been publishing State of Environment since 1999.
The main aim of the SOE is to provide guidelines for formulating environmental action plan, policy setting, and resource allocation for the future, based on sound analysis of the state and trend of the environmental condition. United Nation’s Environment Program (UNEP) has recommended a format for SOE, which is composed of four parts:
Part I: is an executive summary of the status of the environment including environmental developments and key environmental issues.
Part II: is an overall national overview of the major developments and trends of environmental resources.
Part III: addresses five key priority issues in a Pressure-State-Impact-Response, “P-S-I-R” Analytical Framework.”
Part IV: is the conclusion, highlighting the key findings, emerging environmental issues, and major information gaps.
SOE presents a holistic environmental information which are intended to provide a comprehensive knowledge on the environmental condition of a country. In the first hand, SOE provides an overall overview of the environmental settings of a country, and deals with its major environmental issues. The commonly presented issues are as follows:
Media and resources
The economic decision-makings are carried out based on national accounting. National accounting is a system of economic valuation of commodities which are traded in the market i.e. which have market value. Historically, the gains in human welfare are recorded in monetary terms in the national accounts whereas gains from environmental policy do not show up in the form of immediate monetary gain. Those benefits are to be found more in the quality of life than in any increment in the nation’s economic output. In other words, the national accounts measure gains to economic sector in which property rights have been well defined, and the third party effects of economic activity – noise, air pollution, water pollution, etc. – do not show up in the accounts mainly because these resources have no market value or not counted as the nation’s wealth.
(See also Environmental accounting for decision making)
The conventional national accounting system has a major limitation as an decision making based on economic terms alone since it fails to account the environmental costs of an economic activity. More precisely:
A system of environmental accounting was developed in order to incorporate the environmental accounting in the economic decision making. For example, system of environmental accounting would explicitly demonstrate the economic importance and value of environmental policies and encourage decision makers to adequately consider environmental dimensions into the economic policy-making processes.
Environmental accounting can be catagorized into three types: adjustment of national account, satellite account, and natural resource and environmental account. (More..)
This is an attempt of incorporating environmental dimension into the framework of the national account. This is a modified version of national accounting, which also considers accounting of the values of environmental damages, environmental services, stock of natural capital and environmental expenditure.
In this context, where economic research for valuation of environmental commodities is still insufficient, it seems hazardous to disrupt consistency of the well-established SNA system without being sure of obtaining reliable and meaningful results. As an alternative, a separate accounting framework is recommended in the form of Satellite account.
This model is a separate accounting framework, which records environmental matters without integrating them into the core account. The satellite account is a complement to the system of national accounting (SNA) without modifying it. Satellite accounts combine physical information from environmental statistics and natural resource accounts with economic information from national accounts to provide a holistic economic valuation of the environmental dimensions of economic activities.
Three principal functions of satellite accounts:
This is an accounting of stocks of natural resource, both in monetary and physical terms, independently from the national account.
Natural resource and environmental accounts aims at collecting, within a consistent framework, quantitative and qualitative information on both the state of natural resources and their evolution. Primarily in physical terms, they describe the stocks and flows of resources, the flow of resources between the environment and the economy and the flow of resources within the economy.
The general purpose:
Applications of natural resource account as a tool for decision-makers:
Use and limits of environmental accounting for decision-makers
Use as a tool for resource management:
Use as a tool for policy analysis:
Use as a tool for the development of environmental indicators:
(Reference, OECD, Natural Resource Accounts: Taking Stock in OECD Countries, Environment Monographs N° 84, OCDE/GD(94)17, Paris 1994)
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