Introduction The incompatibility of economic and ecological scales

1. Introduction

The publication of the official interim version of the ‘System of Integrated Environmental and Economic Accounting SEEA’ by the United Na- tions marked a decisive qualitative advance in the discussion of environmental accounting. Prior to this publication a variety of environmental ac- counting systems were already in existence Friend, 1993; Keuning, 1993 the majority of which were of an experimental character, often evoking intensive discussions with respect to their design. 1 In contrast, SEEA is an official hand- book claiming to present a ‘comprehensive data system’, a synthesis of different approaches United Nations, 1993, p. 1. Experience with the previous ‘System of Na- tional Accounting SNA’ 1968 United Nations, 1993 and other official handbooks of interna- tional organizations justify the conclusion that SEEA 1993 will also have a decisive influence on the design of national accounting systems. Since, as its authors state, ‘‘The present handbook is a work in progress’’ United Nations, 1993, p. V, it may be useful to point out certain basic problems connected with this most important accounting system. In this article we will concentrate on two main problem areas. First, the fundamental in- compatibility of economic and ecological scales and, second, the questionable emphasis placed on data artificially generated with the help of hy- potheses rather than on data based on empirical observations.

2. The incompatibility of economic and ecological scales

The central element of ecological approaches is the analysis of mutual relationships between sin- gle organisms and environmental factors. Envi- ronmental factors are defined as all external biotic and abiotic factors and phenomena exerting an influence on an organism. In the following text we concentrate on the accounting problems con- nected with the influence of those environmental factors on ecosystems. We do not discuss the problems of non-renewable resources. Mere analysis of changes in environmental fac- tors alone, such as pollution from industrial pro- duction, obviously cannot be regarded as an ecological approach. Such analysis represents only the starting point for ecological analyses of the influence of environmental changes on the dynam- ics of an ecosystem. Ecosystems possess a limited capacity to tolerate changes in their physical envi- ronment caused by natural or anthropogenic fac- tors, and the magnitude of this capacity is decisive in determining the extent of the damage produced by different types of environmental pollution. The nature and degree of environmental pollution an ecosystem can bear depends on the type of ecosys- tem and on its previous stress load. The addi- tional stress tolerance of an ecosystem which is naturally exposed to high loads of stress e.g. solar irradiation, drought, extreme temperature fluctuations or in which anthropogenic stress loads have accumulated e.g. pollutant accumula- tion in the soil may be quite limited. It is important to realize that in most cases useful analyses of ecosystems may be difficult to obtain on a macroscopic basis, e.g. for an entire forest, meadow, or river: in such cases useful information can only be expected from analyses of very small areas. The same holds true for existing stress loads; a difference of 200 m in altitude, a southern instead of a western exposure, or a difference of 20° in the steepness of a slope may substantially change the ecosystem impact of a given environmental change. The appropriate spatial scale for analyzing the effects of environmental changes on ecosystems depends on the nature of this change. This leads to the conclusion that ecological research has to be based on widely differing spatial structures, ranging from global observations to areas of only a few square meters. The exclusive use of large geographical observation units, which is common in regional economics, is not appropriate in ecol- ogy. When using larger units the results not only become rougher, but for many ecological ques- 1 The 25 most important proposals made during the previ- ous 20 years for modifying national accounting systems to- wards an integration of environmental aspects are listed in United Nations, 1993, p. 2324. tions, also useless. Thus ecologists are forced to employ simultaneously widely differing spatial aggregates. It is typical of ecological research that ecosys- tems are regarded and evaluated as dynamic pro- cesses, one example of which is seen in the cumulative processes mentioned above, and a sec- ond in the decomposition processes so important for the tolerance of ecosystems to stress factors. Depending on the processes to be analyzed, an ecological approach may require different time scales, which may extend from decades in the case of problems of secondary succession, to very short time spans when analyzing acute consequences of severe isolated environmental damage. In such cases average values are not only very inaccurate indicators but are literally useless or, even worse, misleading. An average daily temperature gives no information as to whether night frost has oc- curred, nor does the average volume of water of a brook indicate whether there have been times of total dryness. Thus, we can state that static descriptions of environmental conditions do not meet the require- ments of an ecological approach. Ecological as- sessments of processes in environmental systems not only require a strictly dynamic view but also a number of different time scales which, in addition, should mostly refer to less than yearly time spans. In this context average values may be of limited value. A further source of incompatibility between economy and ecology lies in the necessity to use, in ecological approaches, widely differing units of quantity and quality which mostly cannot be use- fully aggregated. Certain stress loads can be meaningfully expressed only as stocks, others only as flows e.g. pollutant depositions in waters, and still others only as concentrations ozone loads in lower air layers. However, such dissimilar units of measure cannot simply be compared with each other. Because environmental damage can practi- cally never be attributed to a single cause see also Harrison, 1989; United Nations, 1990, p. 57, but is rather the outcome of a combination of many non-linear influences, a multidimensional ap- proach is imperative. Additionally, the time inter- vals for the measurement of these factors cannot be arbitrarily appointed but must be determined according to the type of ecosystem and the spe- cific inquiry. The above problems are further intensified by the fact that, with respect to ecosystems, environ- mental factors often cannot be substituted. In many cases the quality of a whole ecosystem is not determined by the mean quality of all envi- ronmental factors but rather by the minimum quality of a central factor. A groundwater short- age in a heathland, for example, cannot be offset by a renunciation of timber utilization. Such in- terdependencies require that the single factors be monitored separately, because only thereby is an adequate determination of the influence of each factor possible. This implies that the classifica- tions employed are of decisive importance for the results of environmental accounting systems. We therefore conclude that for an accounting system to meet ecological demands the use of widely differing measuring units stocks, flows, concen- trations and appropriate classifications is imperative. With these requirements in mind, a perusal of SEEA gives the following picture: 1 instead of an accounting system capable of connecting different degrees of spatial aggrega- tion, SEEA only develops concepts which con- sider whole economies or, at best, regions as geographic units United Nations, 1993, p. 25; 2 instead of employing differentiated temporal units, SEEA explicitly or implicitly assumes calen- dar or business years without further question. The structure of large parts of SEEA is mainly built on the system of economic accounting. This can be justified by the argument of compatibility of environmental and economic accounting. Whether this is reconcilable with the aims of ecological accounting systems is much less obvi- ous and certainly needs further clarification. This critical view is supported by the fact that SEEA contains only stocks and flows as measuring units, but does not employ genuine ecological measuring units like concentrations and intensities. All these findings lead inevitably to the conclu- sion that essentially SEEA is an economic ac- counting system that deals with environmentally relevant factors. Its basic concepts do not permit the integration of genuine ecological viewpoints. We cannot, therefore, agree with the statement that ‘‘Using the SNA as a starting-point for the SEEA does not necessarily lead to a purely eco- nomic view of environmental concerns. Rather, it permits the introduction of ecological elements into economic thinking…’’ United Nations, 1993, S.23. The apparent dominance of economics certainly cannot be explained as a disregard for ecology, but in fact results from the fundamental incom- patibility of the scales used in economics and ecology. If this fact is recognized, unfounded ex- pectations with regard to SEEA can be avoided.

3. The preponderance of artificially generated data