Proper accounting for natural capital underway
Valuing Australia’s natural resources – forestry, cotton and fishing related – is a big task, with a huge pay off, over the long term. Establishing the economic value of natural assets including soil, air, water and biodiversity allows them to be included in economic and business models, ensuring the best possible use of those resources. Using globally accepted Natural Capital Accounting methods, FWPA and the CSIRO will shortly commence measuring the value of some of Australia’s key natural assets.
Announcing a $900,000 grant to FWPA for the conduct of the Natural Capital Accounting study, Deputy Prime Minister Barnaby Joyce identified a major benefit from Natural Capital Accounting – access to finance at optimal rates:
“Many financial institutions are increasingly considering natural capital in their credit risk calculations, and offer lower interest rates for businesses that can prove they are managing their land and other natural resources well.”
At a launch in Wauchope, New South Wales, Jim Houghton the Economics & Statistics Manager for FWPA made clear the benefits from Natural Capital Accounting:
“Its about try to take all the environmental services that come from sustainable operations, to quantify them and put a dollar value on them – the quality of the land, the water and the air.”
Models for Natural Capital Accounting provide information about the underlying value of natural assets, and help track and target the most appropriate management regimes. That can improve management outcomes.
Just as important, accounting for the true value of natural capital provides the tools to demonstrate to financiers and stakeholders, including international and domestic customers, that the natural assets under their control or influence are being managed in the best possible manner.
The outputs, at an industry level, and at a business level, provide opportunities to demonstrate sustainable use of natural resources and to finally place a dollar value on renewable industries and their influence on the nation’s natural assets.
The funding for the study has been provided by the Rural R&D for Profit Programme.