Section 5: Moving forward—a research agenda

This report presents some of the results from the Measuring Ecosystem Goods and Services (MEGS) project. The objective of MEGS was to scope out the requirements for producing and analyzing comprehensive statistics on ecosystems and their goods and services (see Textbox 1). The focus was to begin building the infrastructure, develop, and apply classifications, quality measures and valuation methods to further the development of ecosystem accounts in a manner consistent with existing international initiatives and recommendations.

These objectives were achieved, with several notable accomplishments noted below:

1. MEGS geodatabase
   - The technical work to reconcile existing publicly-available spatial datasets was a fundamental part of the MEGS project and will help support future research and development in this field. Many of the results presented in this report relied on the development of this MEGS geodatabase (Appendix A). For example, Canadian valuation studies from the Environmental Valuation Reference Inventory (EVRI) database and elsewhere were integrated into the geodatabase and were used in valuation of selected ecosystem goods and services (EGS) flows for the Thousand Islands National Park. Census of Population data were integrated and supported production of the marine coastal ecumene and the Golden Horseshoe analysis.
2. Developing and applying new ecosystem accounting concepts
   - The MEGS project was conducted concurrently with international initiatives to develop concepts and methods for ecosystem accounting, in particular, the System of Environmental-Economic Accounts (SEEA): Experimental Ecosystem Accounting. The MEGS team adopted and refined the land cover ecosystem unit (LCEU) concept from SEEA, adding the dimensions of terrain elevation and ruggedness, and measured the concept in Canada (see Appendix A). Tracking the state of LCEU over time will help identify trends in the production of EGS in Canada.
   - The project identified and applied non-monetary valuation methodologies, resulting in contextual information about the value of wetlands EGS in Canada. This information was organized using an accounting approach, meeting another key objective of MEGS.
3. Land cover change matrix
   - Tracking changes in land cover and land use is a useful starting point for studying the state of terrestrial ecosystems. The MEGS project produced a land cover change matrix (Table 3.2: Land cover, southern Canada, 2000 to 2011), which identified the major changes in land cover between these two years.

Arguably one of the most important achievements of this interdepartmental initiative in ecosystem accounting is the identification of limitations and issues in both the data and the statistical infrastructure (e.g., concepts, classifications and dissemination tools). Moving forward, ecosystem accounting, in Canada and elsewhere, will have to tackle the following issues:

1. Spatial datasets
   - Regularly updated spatial datasets such as land cover, land use, climate and species distribution provide information that is essential to assess and value EGS and compare changes over time. Although datasets have improved over the years, several limitations remain. For example, existing national land cover datasets may under or over estimate particular categories. Also, efforts could be made to identify priority ecosystems—and ensure that land cover datasets are developed to accurately represent these areas.
   - Other datasets, such as fish and game abundance and distribution, could be improved through enhanced coordination between government departments, environmental non-government organizations, academia and civil society. In other instances, comprehensive information is simply not available, such as pollinator distribution and abundance, and measures of soil quality.
   - Spatial resolution is also an important consideration—geospatial inventories should be created at a resolution that allows for flexibility in the scale of analysis, whether it is local, regional, national or global. Finer resolution datasets would allow for more flexible and comprehensive analysis.
2. Development of indicators
   - Further work is required to integrate the different aspects of the human landscape modification measures into a composite indicator. This includes identifying the most appropriate elements to include in the indicator and assigning appropriate weights—or relative values in the equation—to the various components.
   - Also required are sound indicators that make the link between ecosystem stocks (volume and condition) and the flows of EGS that are produced by those stocks, establishing the biophysical connection between the quality of the environment and the benefits that people derive from it.
   - Additional research is also necessary to improve analysis and indicators for ecosystem potential. Also, investigating a net carbon balance indicator is seen as the next step for the work done on biomass extraction.
3. Characterization of EGS for marine and coastal ecosystems
   - During the project, ecodistricts dependent on marine and coastal EGS were identified using data on employment in the fishing, seafood processing and aquaculture sectors, thereby delineating the marine coastal fisheries ecumene. An important step to follow-up on this accomplishment would be to develop a detailed classification for coastal and marine ecosystems and their associated goods and services at an appropriate scale, and to link them back to the spatial distribution of socio-economic activities supported by these coastal and marine ecosystems.
   - Further work is also required to improve the understanding of coastal and marine ecosystems, especially their functions, their quality and how these relate to their potential to generate EGS, including the development of quantitative metrics of ecosystem components and functions. Some of this information has already been compiled during the MEGS project, but will have to be built upon to develop a complete set of accounts.
4. Case studies
   - Case studies such as those presented in this report could be developed for other areas, for example other national parks, built-up and agricultural areas, and northern ecosystems. Also, further investment is required to go into more depth in analyzing specific EGS, including cultural services; work to develop this kind of analysis will also seek to include measures of quality.
   - It would be helpful to better apply an accounts structure to the case studies, linking the flow of EGS to stock of natural capital assets, such as the one proposed by the SEEA: Experimental Ecosystem Accounting.
5. Valuation of EGS flows
   - Non-monetary valuation, an approach that uses bio-physical and socio-economic contextual information, is a useful complement to the assessment of EGS in monetary values. This contextual information in and of itself provides perspective on the benefits provided by EGS. There is a role for national statistical offices in helping to understand the non-monetary values of EGS flows.
   - Monetary valuation of EGS can be both difficult and controversial; nonetheless, it is a useful tool for gauging the relative significance of EGS and for linking ecosystem accounts to the broader national accounting framework. Keeping monetary valuation as an end goal can help ensure the existence of appropriate data required by researchers who wish to develop value estimates. National statistical offices have a role to play in producing the underlying data and the statistical infrastructure including classifications, the accounting structure, data collection processes and indicators that allow the estimation of monetary values.
6. Natural capital asset boundaries
   - An important feature of ecosystem accounting is how accounts can be developed using SEEA recommendations, which would allow for international comparability and links to the System of National Accounts. In order to do this, it is necessary to establish both the list of natural capital assets, the list of EGS that are to be included, and determine who the beneficiaries are. Such a classification of the systematic grouping of stocks and flows is imperative in order to settle what is to be included in the ecosystem accounts, and would allow the comparability of EGS values through time and across boundaries.
   - The Thousand Islands National Park case study provides monetary estimates of annual EGS flows. Identifying the values of the stocks of natural assets generating EGS flows is within reach; one of the main challenges is choosing an appropriate discount rate. ¹ 

Although the above is a partial listing of topics, this research agenda demonstrates the extent and diversity of themes that still need to be explored in order to properly account for EGS. As a new discipline, ecosystem accounting draws from the knowledge and experience acquired during the recent development of environmental accounting, but requires continued collaboration among the various disciplines and departments if it is to become the analytical system that it promises to be.

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