The Natural Capital Asset Index and the National Natural Capital Accounts
NatureScot has produced the Natural Capital Asset Index (NCAI) since 2007, and it is part of Scottish Government’s National Performance Framework. The latest version of the Index will be published in May 2022.
The National Natural Capital Accounts are an experimental set of natural capital accounts, produced by Scottish Government, first published in March 2019 and updated in April 2022. Adapted from the existing UK-wide accounts by the ONS (Office of National Statistics), the Scottish National Natural Capital Accounts (‘the Accounts’) represent an exciting opportunity to understand the value of Scotland’s natural capital in monetary terms. This will make it easier to incorporate natural capital into decision making and helps demonstrate the vast contributions that the environment makes to the economy and society in terms that are more comparable to other economic indicators.
Both models make considerable contributions to our understanding of the total benefits Scotland obtains from the environment and can be seen as complementary to each other.
How they compare
The main differences between the NCAI and the Accounts are:
- The representation of value in monetary or non-monetary terms. The Accounts look to measure natures’ contribution to society and the economy through monetary terms whereas the NCAI tracks the changes in the potential of the natural environment to provide benefits to the people of Scotland.
- The Accounts includes some benefits such as renewable energy, mineral, oil and gas deposits in its valuations, whereas the NCAI focusses on living ecosystems and habitats.
- The treatment of biodiversity. The NCAI includes some broad biodiversity indicators such as bird and butterfly indicators whereas the Accounts do not currently account for biodiversity either as inputs or outputs.
- The marine environment. The NCAI does not include marine habitats (due to a lack of data) whereas the Accounts include some marine assets in the form of fish capture from the ocean.
- Timeframes. The NCAI tracks changes using annually updated indicators, whereas the Scottish Accounts provide monetary estimates of ecosystem service flows between 1997 and 2018, historical values are deflated using the HM Treasury June 2019 GDP deflators.
- Ecosystem disservices or costs - The National Natural Capital Accounts show the benefits flowing from different habitats; they currently do not account for disbenefits arising from changes in the environment. Whilst the NCAI does not measure these disbenefits, it does use stress indicators to highlight negative changes to habitats (increases in fertiliser and pesticide use for example) which can be attributed to losses of habitats.
It is difficult to accurately model the full range of benefits derived from the environment - both the Accounts and the NCAI are work in progress and always try to improve the modelling wherever possible.