It would be convenient if we could attribute simple cause-and-effect relationships, whereby drivers generate pressures that lead to effects on the environment. However, drivers, pressures, ecosystems and humans interact in complex and dynamic ways, and are subject to cumulative and historical effects. For example, a combination of demographic change and economic growth can increase demand for food, fibre, minerals, transport and energy in ways that generate pressures on the environment. Conversely, human efforts to decouple population and economic growth from environmental harm can mitigate the negative effects of increased production and consumption, particularly through technological and institutional innovation, and changes in human behaviour that mitigate or reverse environmental impacts.
Improved knowledge about the links between drivers, pressures and environmental impacts has the potential to lead to better decisions, more cost-effective management, and better implementation and integration of policies.
For example, having a clear understanding of the implications of economic growth for the environment and the contribution of different sectors of the economy to particular environmental problems enables better analysis of both environmental and economic policy and management practices. This requires reliable and accurate ways of organising and presenting information that shows the linkages and interactions between the economy and the environment.
One approach is to use environmental–economic accounts that provide information and an improved understanding of a range of issues, including (ABS 2016c):
- patterns of consumption of natural resources by industries and households
- relationships between consumption of natural resources and GVA by industry
- relationships between the value of natural resources and consumption
- patterns of depletion of natural resources and their effect on the environment.
Australian efforts to develop environmental–economic accounts and ecosystem accounts include the production of environmental accounts by the ABS, both by itself and with partners, since 1996. For example, the Water Account integrates data from different sources into a consolidated information set, making it possible to link physical data on water to economic data, such as in Australia’s National Accounts (ABS 2014b).
Development and testing of environmental–economic accounting will continue at the national and subnational levels. This is likely to provide more consistent and comparable information to support a better understanding of the linkages between the environment and other parts of the economy, and the consequence of changes in natural capital on the flow of ecosystem services to society.