Natural Capital Asset Index - Technical Background

Introduction

This report presents details for the Natural Capital Asset Index (NCAI) for Scotland giving details of its data sources, construction and presentation. NatureScot using data from a range of sources generates the indicator. The indicator is compiled from a range of sources to produce a trend for eight categories: overall; woodland; inland surface waters; coastal; grasslands; mire; fens and bogs; heathland; agriculture and cultivated. The Natural Capital Asset Index is an economic indicator in Scotland’s National Performance Framework.

Data Sources

To produce the NCAI 38 data sources are used. Data sources are reviewed annually and discontinued data sets are removed and missing data accounted for – see Missing Data section.

Calculation of the Indicators

The NCAI uses ecosystem services to assess how nature contributes to the wellbeing of Scottish citizens.

Ecosystem services are the range of benefits people can derive from the natural environment. These services are often grouped into three distinct categories:

• provisioning, for example of water and food;
• regulating, for example of climate or disease; and
• cultural contributions which include aesthetics and recreation.

The following Scottish habitats are included in the NCAI:

• Woodland
• Inland surface waters
• Coastal
• Grasslands
• Mires, fens and bogs
• Heathland
• Agriculture and cultivated

Weighting of indicator components

The NCAI’s 38 quality indicators measure a habitat’s ability to provide ecosystem services. A group of experts ranked each indicator on its ability to represent the flow of ecosystem services, with a ‘perfect’ indicator describing the state of a habitat. Indicators can have a score of 1, 0.5 for a strong indicator, 0.2 is a weak indicator or 0 for no connection between the indicator and a particular habitat.

Indicators used:

• Adult red grouse density
• Agri-environment area*
• Area of certified forest
• Area of grass cut for hay*
• Bare fallow/set-aside area
• Butterflies - generalists
• Cereal yield
• Coastal bathing water quality (guideline and mandatory)*
• Coastal Site Condition (favourable condition)
• Farmland bird index
• Fertiliser use (inverse)
• Freshwater Site Condition (favourable condition)
• Grassland Site Condition (favourable condition)
• Greenspace - place for children to play*
• Greenspace - provides a space to relax*
• Greenspace - 'strongly agree' quality reduced in last five year (inverse)*
• Greenspace -attractive green areas *
• Mires/bogs/fens Site Condition (favourable condition)
• Montane Site Condition (favourable condition)
• Net annual change in carbon in woodlands
• Number of livestock units
• Outdoor visits per week (one or more)
• Pesticide use (inverse)*
• Pollution: orthophosphate at safe level*
• Raw water abstractions (inverse)
• Raw water quality: nitrates in rivers at safe level*
• River water quality (% unpolluted sites)*
• Temperate shrub heathland Site Condition (favourable condition)
• Total number of different bird species counted
• Upland bird index
• Urban birds
• Use of marked coastal paths*
• Visual influence of built development (inverse)
• Water Framework Directive - good or better ecological status*
• Wild salmon and grilse - rod & line
• Wintering waterbird index*
• Woodland bird index
• Woodland Site Condition (favourable condition)

*Data unavailable for 2021 update

Missing data

Data missing at either end of the timeseries for a quality indicator is set to a value that has no effect on the overall NCAI score. Data missing in the middle of the timeseries for a quality indicator is interpolated by taking the average of the most recent data points. 

Measuring significance

No formal statistical testing is undertaken on the NCAI or the components. A general rule of thumb is used 2% change in any direction as being significant, in line with other indicators in Scotland’s National Performance Framework.

NCAI as an Official Statistic

NCAI is an Official Statistic produced by NatureScot.  This means that it is produced in line with the Code of Practise for Statistics.  The three pillars of the Code are trustworthiness, quality and value.  To ensure that NCAI maintains its quality and value to its users, a recent review has been undertaken with the involvement of key stakeholders.  This is further to the regular annual review of the current data sources, i.e. are they still available and are they still collected and measured in the same way.

To ensure the trustworthiness of NCAI, it is published following the protocols set out in the Code.  Its month of publication is announced at least a year in advance on our website, and the exact date is announced at least six weeks in advance.  It is published at 9:30am on that day.  Pre-release access to the final results – even verbally discussing it – is strictly restricted to those who need to have access following the rules set out in the Code and pre-release access legislation.  For example, this includes those who are involved in its production and publication, those who need to use the results for their own Official Statistics and ensure a timely publication of those Official Statistics, and those who need to prepare a briefing for relevant ministers.

Frequently Asked Questions

Why doesn’t the NCAI include marine?

The NCAI is unable to include marine habitats due to a lack of available data that can be used for a national scale. Additionally, the value of natural capital for Scotland’s marine habitats would substantially dwarf the natural capital of Scotland’s terrestrial environment, making it difficult to see the changes happening on Scotland’s land. A feasibility study was conducted in 2019 and explores these themes further. A marine NCAI for coastal marine habitats in being considered for future development.

Why does the NCAI compare change over three years rather than annually?

The NCAI compares change over three years rather than annually because longer term trends better reflect the slow moving trends of the habitats of Scotland. Annual variations can be affected by factors such as weather (and extreme weather events) which is not a fair reflection on the conditions of the underlying stock of natural capital. Meaningful interpretation is taken to mean that trends can be discerned and interpreted within a meaningful time frame (ideally less than 4 years), can be assigned to human activity, and will be meaningful when aggregate.

Why doesn’t the NCAI reflect the recent year (why does the 2023 update only go through 2021)?

The NCAI publishes annual updates that are two years behind the publication year. This is to accommodate the time needed to collect data for the multiple data sources the Index uses.

Why does the NCAI start with the year 2000?

The NCAI starts and uses the year 2000 as a base year. The availability of data on an annual basis became more accessible and at a greater scale in year 2000 allowing for Scotland’s natural capital to be understood as a whole from this point in time.

What was the cause of decline in the latter part of the last century?

The declining trend of the NCAI from the 1950s to 2000 is mainly due to land use change and intensification.

Is there a similar index to compare the NCAI with for the UK as a whole?

There is not a UK NCAI. However, other measures developed for England by the Natural Capital Committee reflect a similar story as the NCAI.

Have you done a sensitivity analysis?

A sensitivity analysis was conducted by James Hutton Institute suggesting that changes in the weightings and component indicators do not significantly affect the results of the NCAI.

Where does the expert judgement lie in the NCAI?

Expert judgement in the NCAI is part of the data input for Ecosystem Service Potential Weighting, which captures the demand for services by people in Scotland, as well as the Ecosystem Service Potential per service providing unit data input, which captures what habitats can contribute which ecosystem services and to what degree. Each quality indicator measuring the condition of its respective habitat also goes through a weighting process for how significant it is for each of the three types of ecosystem services, provisioning, regulating and maintaining, and cultural.

Why is there a dip in the NCAI between 2008 and 2016?

This reflected more targeted monitoring of protected sites that were in unfavourable condition during that period. This does not mean that a degradation of natural capital took place and the NCAI subsequently returned to its previous trend.