Using the SEEA Experimental Ecosystem Accounting framework to advance I-O and CGE integrated environmental-economic modelling

The data required for input-output (I-O) and computable general equilibrium (CGE) modelling at national and multi-regional levels is sourced primarily from national I-O tables. I-O tables themselves are compiled in line with the statistical standards used to compile the national accounts, i.e. the UN System of National Accounts (SNA). Recognising the importance of integrating data on environmental stocks and flows with the SNA, over the past 20 years there have been important advances in accounting for natural capital and environmental assets. These are encapsulated in the recent international standard, the UN System of Environmental-Economic Accounting (SEEA) which uses national accounting principles for the organization and integration of environmental and economic data. In 2013, as part of the SEEA framework, an additional perspective was introduced to apply national accounting principles to the integration of information on ecosystem condition and ecosystem services. This advance is referred to as ecosystem accounting and is described in the SEEA Experimental Ecosystem Accounting. This paper articulates a conceptual approach by which data on ecosystem services and ecosystem assets can be integrated into standard I-O tables and hence underpin further advances in integrated environmental-economic modelling. The approach ensures that standard accounting identities (e.g. supply and use of products) are maintained and reflects a coherence between measurement boundaries for production and assets. The paper notes a series of conceptual and measurement issues, including those concerning the pricing of ecosystem services that remain to be further explored.