The natural environment provides resources – such as water, land, plants, animals, ecosystems and minerals – that drive the economy and other human activities. The effective measurement of the extent of resource use is vital to ensuring sustainable development in line with the country’s National Development Plan (NDP).

Natural capital accounting (NCA) refers to the use of an accounting framework to provide a systematic way to measure and report on stocks and flows of natural capital, analogous to accounts for other forms of capital. It is a broad term that includes accounting for individual environmental assets or resources, both biotic and abiotic (such as water, minerals, energy, timber, fish), as well as accounting for ecosystem assets and ecosystem services.

The South African government, like in all countries, relies on an array of measures to track national progress and inform policy and decision-making. The gross domestic product (GDP) as an economic indicator provides insight into the performance of the economy, while population census data reveals changing demographic patterns, and national household surveys show how much progress is being made toward achieving social goals. Natural capital accounting aims to do the equivalent for ecosystems and other natural resources – to measure and track indicators and trends in natural capital in South Africa.

The United Nations’ (UN) System of Environmental-Economic Accounting (SEEA), used by Statistics South Africa (Stats SA), is the international standard for measuring the amount of natural resources a country has and how these are being used. The SEEA provides agreed definitions, classifications and accounting tables, so that countries can produce internationally comparable statistics. Natural capital accounting using the SEEA framework will assist with South Africa’s national reporting on the Sustainable Development Goals (SDGs), by providing systematic, credible and comprehensive information.

South Africa has years of experience with natural capital accounting. Stats SA first developed environmental economic accounts for water in 2000 and has subsequently compiled additional accounts for energy, minerals, and fisheries.

In 2014, South Africa joined Bhutan, Chile, Indonesia, Vietnam, Mauritius and South Mexico, in the Advancing Natural Capital Accounting (ANCA) project launched by the United Nations Statistics Division (UNSD), UN Environment and the Secretariat of the Convention on Biological Diversity (CBD), with funds from the Government of Norway. Stats SA co-led this project with the South African National Biodiversity Institute (SANBI), piloting accounts for land and ecosystems in KwaZulu-Natal and national river ecosystem accounts using the SEEA framework. A key finding from the river accounts is that the ecological condition of South Africa’s rivers declined by 10% from 1999 to 2011. This information is helping to inform the National Water and Sanitation Master Plan led by the Department of Water and Sanitation (DWS), which highlights the importance of maintaining the integrity of freshwater ecosystems as part of the water value chain. The accounts also have identified the areas where the decline in river health has been most pronounced so that solutions can be identified and targeted to better manage catchments and rivers to support economic and social development.

South Africa was again selected to join four other countries – Brazil, China, India and Mexico – in an innovative project to advance the theory and practice of ecosystem accounting called the Natural Capital Accounting and Valuation of Ecosystem Services (NCA&VES) project (2018–2020). Funded by the European Union, and implemented by the UNSD and UN Environment, in collaboration with the Secretariat of the CBD, this project builds on the experience from previous project to advance theory and practice of ecosystem accounting.

Stats SA and the SANBI are co-leading the project nationally and in collaboration with the Department of Environmental Affairs (DEA) and other national and sub-national stakeholders to develop accounts for:

• National land cover change and terrestrial ecosystem extent
• City-regions
• Protected areas
• Marine ecosystems
• Selected species of special concern

The project will also explore linkages of these accounts to national economic and demographic data, to show how and where people most depend, and impact on, nature. The project also includes some more experimental accounts in one province, KwaZulu-Natal, which will test the development of selected ecosystem services accounts in physical and monetary terms.