Distributional Issues in Natural Capital Accounting: An Application to Land Ownership and Ecosystem Services in Scotland

Abstract

Accounting for ecosystems is increasingly central to natural capital accounting. What is missing from this, however, is an answer to questions about how natural capital is distributed. That is, who consumes ecosystem services and who owns or manages the underlying asset(s) that give rise to ecosystem services. In this paper, we examine the significance of the ownership of land on which ecosystem assets (or ecosystem types) is located in the context of natural capital accounting. We illustrate this in an empirical application to two ecosystem services and a range of ecosystem types and land ownership in Scotland, a context in which land reform debates are longstanding. Our results indicate the relative importance of private land in ecosystem service supply, rather than land held by the public sector. We find relative concentration of ownership for land providing comparatively high amounts of carbon sequestration. For air pollution removal, however, the role of smaller to medium sized, mostly privately owned, land holdings closer to urban settlements becomes more prominent. The contributions in this paper, we argue, represent important first steps in anticipating distributional impacts of natural capital (and related) policy in natural capital accounts as well as connecting these frameworks to broader concerns about wealth disparities across and within countries.

Safeguarding our roots: natural resources accounting and reporting in the public sector

“…The law requires that revenue from these NRs be transferred to a sovereign fund managed by the Bank of Norway, according to the investment strategy provided by the Ministry of Finance, following the authorization of Parliament. The focus is not on the balance sheet but on operational flows (the so-called ecosystems; Atkinson and Ovando, 2022; Biondi and Oulasvirta, 2023).…”

“…According to Biondi and Oulasvirta (2023), recognizing NRs as assets and representing them on a balance sheet in a supposedly reliable monetary amount is not a necessary condition for preserving NRs for future generations. This perspective suggests that the issue is not (only) assessing the monetary value of NRs as assets but also measuring flows (Atkinson and Ovando, 2022; Hartel, 2003) derived from this stock or resource, as the Norwegian case suggests.…”

An environmental justice perspective on ecosystem services

“…To a minor extent, work on ES and justice has broadened to include work scrutinizing the formal or informal institutions (e.g., rules, norms, laws) that structure interactions between societal and political actors, guide resource-use decisions that influence ES production and access (Kooiman, 2003 ). We also observe a trend toward shedding light on the interface between environmental justice and the supply side of ES (Benra and Nahuelhual, 2019 ; Ramirez-Gomez et al 2020 ; Atkinson and Ovando 2021 ), as well as on equity in programs and policies, e.g., for planning green infrastructure in cities (Hoover et al 2021 ). To date, ES assessments only marginally touch on the disaggregation of beneficial and detrimental ES by different groups of people and their cultural worldviews (Brück et al 2022 ).…”

“…Other studies have focused on the inequitable distribution of the potential supply of ES (Mandle et al 2016 ; Felipe-Lucia et al 2022 ), or have characterized barriers in access to ES for different members of society, including vulnerable and marginalized populations (e.g., Wieland et al 2016 ) or specific demographic groups (Cortinovis and Geneletti, 2018 ). Examples include the distribution of access to urban green spaces (Nyelele and Kroll 2020 ), the distribution of the potential supply of ES in rural social-ecological systems and rural properties (Benra and Nahuelhual, 2019 ; Atkinson and Ovando, 2021 ), and the (unequal) use of protected areas by different groups (Booth et al 2010 ).…”

Understanding values beyond carbon in the Woodland Carbon Code in Scotland

“…Equity in access to land and other resources is also relevant when designing an ambitious woodland expansion programme through carbon finance, in particular when disadvantaged low income communities are involved. High rural land ownership concentration in Scotland, along with insights that a significant part of carbon sequestration (though mostly not additional) is already occurring in large private properties (Atkinson and Ovando, 2022) calls for caution in the design of policy or market-based interventions using forest-based carbon offsets. Large-scale habitat restoration and woodland expansion occurring in Scotland as part of new natural capital markets, carbon in particular, may also result in social and cultural impacts at local levels.…”