The Natural Capital Asset Index and the National Natural Capital Accounts
The Natural Capital Asset Index (the Index) is a composite index looking at the amount and characteristics of different Scottish habitats to help us assess Scotland’s prosperity. It is not a monetary value but is composed in a way which reflects the relative contribution of habitats to the wellbeing, or quality of life, of those who live in Scotland. The Index is an official statistic published by NatureScot.
The Scottish National Natural Capital Accounts (the Accounts) are an experimental set of natural capital accounts, produced by Scottish Government. Adapted from the existing UK-wide accounts by the ONS (Office of National Statistics), 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 nature makes to the economy and society in terms that are more comparable to existing economic indicators.
Both models make considerable contributions to our understanding of the total benefits Scotland obtains from the environment and are complementary to each other.
How they compare
The main differences between the Index 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 the asset value of outputs from nature whereas the Index tracks the changes in the capacity of the natural environment to provide benefits to the people of Scotland.
- The benefits people feel from different types of nature. The Index solely focusses on living ecosystems and the ecosystem services they can provide while the Accounts also include benefits such as renewable energy, mineral, oil and gas deposits in its valuations.
- The treatment of biodiversity. The Index includes some broad measures for biodiversity such as bird and butterfly indicators that influence how much wellbeing we can receive from nature while the Accounts do not currently include specific measures for biodiversity either as inputs or outputs. However, the Accounts are based and built on considerations of habitat extent and condition.
- The marine environment. The Index does not currently include marine habitats (due to a lack of data) whereas the Accounts consider some marine assets in the form of fish capture from the ocean.
- Timeframes. Both the Index and the Accounts are annually updated but the Index tracks changes through indicators updated two years behind the current year, for example the 2023 Index includes data up to 2021. For the 2023 update of the Accounts, monetary estimates of ecosystem service flows between 1998 and 2019, with some values including 2021 where data is available, is included.
Ecosystem trade-offs. Both the Accounts and the Index do not account for trade-offs arising from changes in the environment; if you were to have more of one ecosystem service, you might lose and have less of another. However, the Index 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 Index are a work in progress and always try to improve the modelling wherever possible.