Natural Capital and Wealth Accounting for Sustainability Assessment: A Global Perspective

Capital assets provide a wide variety of benefits and services to current and future generations. If intergenerational well-being is governed by capital assets, then they should not decline. This is the simple intuition behind nondeclining capital assets as an indicator of sustainability. We review recent developments in the wealth-accounting literature, with a particular focus on global natural capital. Aiming toward climate and biodiversity targets in economies constrained by carbon budgets and planetary boundaries, the wealth index needs to be updated to reflect global scarcities. Inclusive wealth of United Nations and the Dasgupta Review's focus on the conceptual tools of impact inequality, as well as the safe operating space approach, might give us some toolkits to make these changes. Other challenges include spatial and global aggregation and the upscaling of micro to macro. This also calls for utilizing the wealth index for cost-effectiveness, as well as cost-benefit, analysis. Looking at another focus of the inclusive wealth and Dasgupta Review, we touch on the effect of population change on per capita wealth and measurements of well-being in the context of an ever more densely populated planet. Finally, we also discuss that more empirical research is expected to revise approaches to the comprehensive net national product, as well as to wealth accounting.