South Africa's Ecological Accounts And Why They Matter

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Global CoordinatorThe Economics of Ecosystems and Biodiversity (TEEB)
4 September 2018
Tools and Initiatives

During a recent visit to South Africa, the UK Prime Minister Theresa May – accompanied by a 29-strong business delegation – pledged to increase trade with the African continent. She stated that a "prosperous, growing and trading Africa" was "in all of our interests", adding that the continent's "incredible potential will only be realised through a concerted partnership between governments, global institutions and business".

But how can we measure whether Africa is better off trading with the UK or other trade giants, such as the US and China?  To answer this question, we must look at what is to be traded.

Data from the UK Office for National Statistics shows that the most important imports (by value) from South Africa are currently non-ferrous metals, followed by chemicals. The industrial processes related to products in both of these categories have serious negative impacts on South Africa’s ecosystems, which can have serious impacts on the lives and livelihoods of South Africans as well as the country’s long-term economic prospects.

As a sovereign nation, South Africa is of course at liberty to allow – or actively promote – such industrial activities. But are its democratically-elected politicians aware of the full impacts of these activities on the country’s rich natural heritage and the livelihoods of everyday South Africans?

Maybe not.

One way of measuring the impacts – both positive and negative – of any such economic and political decisions is with reference to the United Nations Sustainable Development Goals (SDGs) – a  series of 17 internationally-agreed, universally-applicable goals that are recognized as indivisible and cover issues across the spectrum of development from poverty to food and water security, to equity, health, access to decent work, peace, and a stable natural environment. Indivisibility is key to the success of the SDGs, as progress on one goal might be contingent on another.

While the SDGs can help provide some indication of the full spectrum of impacts of, for example, expanding the production of non-ferrous metals and chemicals,  the SDG framework does not provide a solid methodology for assessing future scenarios of today’s decisions. How do we, for instance, deal with the apparent trade-off between the flows of foreign direct investment into the production of non-ferrous metals, which may contribute to the achievement of SDG1 (No Poverty) but will impinge on the achievement of SDG6 (Clean Water and Sanitation)?

Recent work by Johan Rockstrom and Pavan Sukhdev suggest that delivering on the full range of SDGs depends on first achieving the ‘biospheric’ or ecological goals (6, 13, 14, 15) so that we have resilient and stable ecosystems, which are a necessary but not sufficient condition of achieving social goals (such as SDG 1 on poverty and SDG 10 on reduced inequalities) and economic goals (such as SDG 8 on good jobs and economic growth). This is approach is reflected in their ‘wedding cake’ schematic.

While some would make the moral argument that we should be maintaining healthy and productive ecosystems as stewards of planet earth, providing a space for other sentient species to survive and thrive, there is also the utilitarian, human-centred, even ‘selfish’ imperative: we ought to achieve ecological SDGs so that we can achieve economic and social goals – which surely everyone would support irrespective of how ‘green’ their mind set and value system. 

But how does this all relate to the concrete policy decision on whether to promote trade in non-ferrous metals and chemicals in South Africa?

The real question is this: Will the industrial operations required to promote this trade ultimately degrade the capacity of the country to achieve sustainable prosperity or ‘green growth’? How can British and South African policymakers answer this question before moving forward with increased trade in these metals?

While these kinds of questions are not easy to answer, various initiatives are making strides towards gathering the data that would inform the environmentally and socially complex debate. The UN Environment/TEEB Initiative (The Economics of Ecosystems and Biodiversity) is collaborating with the United Nations Statistics Division (UNSD) and working with national partners such as the South African National Biodiversity Institute (SANBI) and Statistics South Africa, to develop ecological accounts for South Africa, with funding from the European Union.

The statistical framework, known as the System of Environmental Economic Accounting (SEEA) has been endorsed by the UN Statistical Commission, which is composed of all member states and Chief Statisticians from member states from around the world. It integrates economic and environmental data to provide a more comprehensive and multipurpose view of the interrelationships between the economy and the environment and the stocks and changes in stocks of environmental assets, as they bring benefits to humanity.  It follows a similar accounting structure as the System of National Accounts (SNA), which means that these ecological accounts can be easily integrated into traditional National Income Accounts and its most famous measure, Gross Domestic Product or ‘GDP’.

This is important. It means that – perhaps for the first time – decision makers will be able to use these accounts to measure the long-term economic costs of degrading national ecosystems in order to, for example, expand the production of non-ferrous metals and chemicals. They’ll then be able to compare these costs with the potential short-term economic gains of increased trade in these environmentally harmful exports.

In the end, the decision on what to prioritize in a national economy and society remains in the hands of democratically-elected leaders, and we would not wish for this to change. However, the data and metrics provided by SEEA will provide these leaders with critical information to inform their decisions. This information, in the broader context of SDG thinking, might enable today’s leaders to make better decisions for the long-term prosperity of their country, particularly during trade negotiations with counterparts in the UK and around the globe.

South Africa

The opinions expressed herein are solely those of the authors and do not necessarily reflect the official views of the GGKP or its Partners.