When do you recognize maple syrup, when it is earned (sucked from the tree) or realized (when it goes down your big fat gap)? How much goodwill does a forest have?
The UK Department for Environment, Food and Rural Affairs has published its first white paper on the natural environment in 20 years hoping to answer some of these questions. The natural choice: securing the value of nature suggests the UK should set up an independent Natural Capital Committee (sort of like FASB for forests) to advise the government on when, where and how natural assets are being used unsustainably.
This would create “green accounts” which give an idea how the country’s natural assets are being used.
The authors of the paper suggest that economic growth and the natural environment are mutually compatible, implying that “nature’s bank balance” should not be ignored when looking at the country’s overall economic growth.
“Past action has often taken place on too small a scale. We want to promote an ambitious, integrated approach, creating a resilient ecological network across England. We will move from net biodiversity loss to net gain, by supporting healthy, well-functioning ecosystems and coherent ecological networks. We will publish a new Biodiversity Strategy for England, responding to our international commitments and setting a new direction for policy over the next decade,” the paper says, proving that someone obviously read their accounting textbooks before they tried to write a framework for valuing nature’s assets.
[Insert bad money doesn’t grow on trees joke here]