Improvement in SEEA over the SNA

The other most important improvement in SEEA over the SNA is the extension of the asset boundary. In SEEA the term 'natural resource' is used in a much broader sense than SNA's definition of 'economic non-produced natural assets'. The SEEA identifies separately non-produced economic assets and non-produced environmental assets (instead of non-produced natural asset) in addition to the produced economic assets. 'Produced assets' are those assets that result in future benefits to their owners. In the category of 'produced assets', the natural assets consist of all those whose growth is controlled by man through the process of cultivation, including vineyards, orchards, timber tracts and other plantations, inventories of agricultural crops standing on the land after harvesting, etc. 'Non- produced economic assets' are those natural assets that are currently exploitable or likely to be so, for economic purposes, even if no explicit ownership or control is currently exerted over these resources and have market price if they can be exploited.

For example, fish in oceans or timber in forests, which can be exploited for commercial purposes, come under this category. 'Non-produced environmental assets' are those assets for which neither ownership rights are enforced nor direct monetary benefits are derived from their use. For example, forests provide other environmental services like global climate balance, which are not commercially exploitable. Such type of assets, which provide only environmental services but cannot be commercially exploited come under this type. These assets include air, land and terrestrial ecosystems (excluding forests), forests and forestland in wilderness, rare and endangered species of fauna and flora, water and aquatic ecosystems.

Apart from the extension of the asset boundary in the SEEA, the information on 'other changes in volume' for non-produced economic and environmental assets is disaggregated into four categories (Barte1mus and Van Tongeren, 1994). These categories are:

1.  Depletion: reductions in the quantity of assets, due to economic uses (for example timber harvesting)
2.  Degradation: positive or negative changes in the quality of assets, due to economic decisions (for example soil erosion due to forest loss leading to loss of land productivity)
3. Other accumulation: additions or reductions in the quantity of assets due to economic decisions (for example additions due to afforestation or reduction due to transfer of forests to non-forest uses like agriculture, etc.)
4. Other volume changes: quantitative or qualitative changes in assets not caused by economic decisions (for example destruction of forests by natural fires, etc.)

Like SEEA, the starting point for ENRAP is the conventional national economic accounts. The ENRAP accounting structure is based on the premise that economic accounts should attempt to cover all the economic inputs and outputs that together comprise an economic system. For inputs and outputs to be economic they need not have market prices. The natural environment is one such example. ENRAP includes the excluded goods and services from the national accounts under three categories: input services (e.g., waste disposal services); output or environmental quality services (e.g., recreation and aesthetic services); negative outputs (e.g., pollution). The basic ENRAP strategy is to append these non-marketed services to the marketed services already accounted for in the conventional accounts. The monetary value of these services is obtained using estimated shadow prices. This treatment is similar to SEEA. The modified accounts are completed with two other entries. First, non-marketed household production covers the non-marketed household production like firewood collection. Second, natural resource depreciation is included along with conventionally measured capital depreciation. Both entries are involved to give a measure of modified net national product, changed to include the depreciation of natural assets also marketed assets.