CH AP TER 1 1 : R emo te S en sin g an d M o del in g to Fi ll th e Gap in “ Missin g” Natu ral Cap ital
groundwater (Fenichel et al. 2016) and fisheries (Yun et al. 2016) also provide useful examples of valuation within a wealth accounting framework. Although prices are likely to shift as the quantity of ecosystem services changes, this chapter makes the common simplifying assumption that prices remain constant over time. Using this assumption reduces the uncertainty surrounding price changes and prevents the mixing of signals of changing prices and quantities. As mentioned, proper natural capital accounting reattributes value to specific services and the ecosystems that provide them. For example, the value of cropland will be partly attributed to the water supply, soil fertility, and pollination services provided to that cropland. To avoid double counting, the value of services reattributed to natural capital should be deducted from the rental value estimates for cropland as estimated, for instance, in the Changing Wealth of Nations. The same holds true for estimates of the value of pasture, forests, and other ecosystem types. Challenges remain for comprehensively bringing the value of natural capital into wealth accounts—particularly regarding valuation of natural capital assets and modeling some of the more technically challenging ecosystem services (for example, riverine flood regulation) at a global scale. However, advances in data and environmental models should make the inclusion of certain ecosystem services in wealth accounts increasingly possible over, for example, a 5-to-10-year time frame. Such information can play an important role in building better wealth accounts and ecosystem accounts that can guide decision making regarding national and global development, including the Sustainable Development Goals.
Note 1. Any use of trade, firm, or product names is only for descriptive purposes and does not imply endorsement by the U.S. government.
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