The U.K.'s outlook for lowering greenhouse-gas emissions is adding to the general skepticism about the prospects for action at
This bias isn't so surprising coming from the U.K. Treasury, staffed as it is mostly by people with backgrounds in economics and finance. But it reflects a serious intellectual problem at the very root of our failure to address planetary warming. Countries rely on an accepted international system of accounts to guide planning on economic and financial matters, and these accounts naturally emphasize financial assets. No similarly accepted system of environmental accounting exists to help us measure and preserve — or even properly see the value of — the environment and the services we draw from it.
As a result, the enormous value of the natural environment mostly remains off the books for planning purposes. Until that changes — and there are some hopeful developments that desperately need to be nurtured — upfront costs and other narrowly conceived economic quantities will continue to get undue attention.
The
Unfortunately, nothing in these accounts mention things like climate change, ocean acidification, or the loss of rainforests and valuable topsoils. The national accounts neglect any information about natural capital as embodied in the many resources we rely on: plants, animals, rivers, air, water, soils and minerals, as well as patterns of relatively stable weather and climate. These can all be systematically depleted or otherwise disturbed, with no blemish left in the accounts. A more complete accounting system would make such losses clear, highlighting the longer-term costs we’re imposing on ourselves by extracting short-term economic value now.
Many people
Their focus would be on a different set of assets: not financial assets, but the natural assets vital to the long-term continued functioning of economies and society.
Is it a pipe dream to think governments might move in this direction? Not necessarily. Under the leadership of the United Nations, some 89 countries participated in the development of principles for the
The system of accounts we’ve become accustomed to has only existed for 70 years. It’s taken for granted by governments and businesses the world over, and largely sets the boundaries for acceptable economic planning. Yet it’s become increasingly clear just how incomplete this set of accounts is — and how much of the real value of the Earth system it quite arbitrarily ignores.
Judging a nation’s situation by its economic accounts alone is rather like judging a household by its bank balance. The owner might build up a healthy cash balance in the bank by selling off the heating system, roof and floorboards, and turning the bed into BBQ kindling, thereby dismantling the house as a functioning unit. The financial accounts only look great because they're very partial accounts.
Michael Vardon of the Australian National University, one of the leaders behind the movement for environmental accounting, told me in an email about the prospects for success — and whether he had encountered any entrenched resistance. The situation, he suggested, is much as it is with efforts to address climate change: plenty of good words, less action.
“These standards aren’t yet normalized” in the same way financial accounting has been normalized, he said. “There’s no active resistance to building the information system, and everyone is saying the right thing. But words into action is the issue.”
It may be too much to hope COP26 will deliver any historical breakthroughs on climate. But some elements of the SEEA on improved carbon accounting have been put forth for consideration by government representatives during the meeting. It would be encouraging if nations took some real steps toward adopting standards for valuing the natural world.