True Wealth of Nation

Context:  Nature has to be central in the post-COVID economy if progress is measured through wealth, not income.

Need for Inclusion of Nature in National Wealth Accounting Framework

• Rising Existential Challenges : 

• • • Disruption in ecosystems: illegal trading of wildlife, fragmentation of habitat, domestication of the wild, agricultural expansion and climate change — are the main drivers of the Covid-19 pandemic.
    • Complex Policymaking: due to global interconnectedness between economies, health, environments and humanity

• Helps to monitor environmental degradation: Since the current indicators used for measuring economic growth and well-being fail to account for the contributions of natural ecosystems.

• • • GDP measurement excludes ecosystem services like ecological resilience.
    • Benefits from the diversity of life forms are often ignored in economic indicators.

• Helps Induce accountability: An independent review by the British government has suggested the need for inclusive wealth accounting to keep track of change of natural assets and emerging trade-offs.

• Global natural capital is declining : and is often sacrificed for improvements in human capital.

• Lagging on Sustainable Development Goals Targets: The targets for biodiversity, including terrestrial and marine are lagging.

•  Helps to bring focus to the dimension of inequality: which is otherwise ignored.

Way Forward: 

• A Case for An Inclusive Wealth Index (IWI): Argues that it is possible to achieve per-capita growth in GDP and inclusive wealth simultaneously.

• Calls for Inclusive Wealth: A country’s inclusive wealth is the value of its capital assets — natural capital, human capital and produced capital — an index of its production potential.
• Multi-Purpose Indicator: It is capable of measuring not only traditional stocks of wealth but also less tangible ones such as skill sets, healthcare and environmental assets.

• Creating Balance in the Biodiversity: Assess and appreciate the worth and full value of natural capital and monitor environmental degradation.