Accounting For Environmental Services: Contrasting the SEEA and the ENRAP Approaches

Both the System of Integrated Environment and Economic Accounting (SEEA) and the Environmental and Natural Resources Accounting Project (ENRAP) are efforts to expand conventional national economic accounts in order to better reflect interactions between the market economy and the natural environment. In order to maintain a close relationship to the System of National Accounts (SNA) accounting standards, SEEA adopts conventional definitions of productive sectors and attempts to minimize the use of imputations. As a result, SEEA fails to account for many valuable services of the natural environment and encourages the use of techniques that provide misleading and poor estimates of depreciation and damage the environment. This paper develops a theory of environmental accounting drawing on principles from the environmental economic literature. This theoretical framework underlies the ENRAP approach and provides a basis for constrasting ENRAP and SEEA analytically. Using Philippine data, SEEA-type estimates are compared with those of ENRAP.