Safe Usage of Monetary Valuation

TG-1.9 Section 1: Using Ocean Accounts in Decision-Making Core Draft

Circular ID	TG-1.9
Version	7.0
Badge	Core
Status	Draft
Last Updated	May 2026

1. Outcome

1Monetary valuation of ecosystem services and assets represents one of the most powerful yet potentially misunderstood aspects of ocean accounting. When applied appropriately within the framework established by international statistical standards, monetary values can support comparison of ecosystem services and assets with standard economic measures, inform policy trade-offs, and contribute to extended measures of national wealth.¹ However, monetary valuation is not appropriate for all decision-making contexts, and inappropriate application can undermine the credibility of ocean accounts and lead to flawed policy conclusions.²

2This circular recognises that monetary values from accounts, and wider economic values, will not fully reflect the importance of ecosystems for people and the economy.³ Assessing the importance of ocean ecosystems requires consideration of a wide range of information beyond monetary data, including biophysical data on extent and condition, and data on the characteristics of people, businesses, and communities that depend on them. Physical accounts should be compiled and released alongside monetary accounts to support appropriate interpretation and application.

3The guidance draws on the System of National Accounts 2025 (SNA 2025), the SEEA Central Framework 2012, and the SEEA Ecosystem Accounting 2021. The specific status of SEEA EA valuation chapters is discussed in Section 3.3.3.⁴

2. Requirements

• 1TG-0.1 General Introduction — Understanding of the GOAP framework and ocean accounting fundamentals

2Related Circulars:

• 3TG-0.2 — Statistical Classifications and Standards (if available)
• 4TG-3.1 Marine Ecosystem Asset Accounts — Physical and monetary asset accounts that apply valuation
• 5TG-3.2 Flows from Environment to Economy — Ecosystem service accounts that require valuation

3. Guidance Material

3.1 When Monetary Valuation Should Be Applied

1Monetary valuation of ocean ecosystem services and assets is appropriate and valuable in specific decision contexts where monetary comparison provides necessary information.

3.1.1 Integration with National Accounts

1Exchange-value-based monetary accounts support the applications summarised in Table 3.1.1 below⁵.

2Table 3.1.1: Applications supported by exchange-value-based monetary accounts

Application	Description
Extended national wealth measures	Comparing values of marine ecosystem assets with other asset types (produced assets, financial assets).
Visibility of ocean contributions	Highlighting the economic relevance of non-market ocean services in a common unit of account.
Supply chain analysis	Assessing ecosystem inputs to blue economy industries (fisheries, aquaculture, tourism, shipping).
Trade-off analysis	Comparing relative exchange values of different ecosystem services to inform allocation decisions.
Adjusted income measures	Deriving degradation-adjusted measures (e.g., net national income less ocean ecosystem degradation).

3.1.2 Ecosystem Asset Valuation

1The net present value approach to ecosystem asset valuation, using the discounted present value of expected future ecosystem service flows, provides a basis for:⁶

• 2Recording opening and closing values of marine ecosystem assets in monetary balance sheets
• 3Measuring ocean ecosystem degradation and enhancement in monetary terms
• 4Tracking changes in marine natural capital wealth over time
• 5Comparing ecosystem asset values across different ocean realms and ecosystem types

6The selection of an appropriate discount rate determines the resulting asset value. The SEEA EA provides a dual framing for discount rate selection: individual market-based discount rates should be applied for ecosystem services whose users are private economic units, whilst social discount rates should be applied for ecosystem services that contribute to collective benefits received by groups of people or society generally (SEEA EA, para. 10.77). For ocean accounting, where many services such as coastal protection and carbon sequestration provide collective benefits, social discount rates may be more appropriate for a large share of the service portfolio. Para 10.78 further notes that social discount rates should be based on rates in active use in government decision-making, or long-term government bond rates where such rates are not available.⁷

7In practice, different discount rates can produce widely divergent asset values for long-lived marine ecosystems, particularly for services such as carbon sequestration and coastal protection where benefits accrue over decades or centuries. Compilers should conduct sensitivity analysis to assess the effect of alternative discount rates on asset values and document the chosen rate and its rationale transparently. The SEEA EA does not prescribe a single rate but encourages consistency within and across accounts.

8Where a country has no published social discount rate and no active long-term government bond market, a situation common among small island developing states (SIDS) and many coastal developing countries, compilers should apply the following fallback approach: (a) use a regional average social discount rate from the relevant regional development bank (e.g., the Asian Development Bank, Inter-American Development Bank, or African Development Bank) as the first option; (b) if no regional rate is available, apply 3% as a conservative international benchmark consistent with IPCC AR6 Working Group III Chapter 3 and the commonly applied lower-bound social rate in climate economics literature, with explicit justification; (c) in all cases, conduct sensitivity analysis spanning at least three rates across a plausible range (e.g., 2%, 4%, 7%) and report results for each. See TG-3.1 for further treatment in the context of asset accounts.⁸

3.1.3 Blue Economy Policy Analysis

1Monetary values from ocean accounts can provide baseline data to support:

• 2Scenario modelling of alternative ocean use patterns
• 3Assessment of climate-related financial risks to ocean-dependent sectors
• 4Design and calibration of marine environmental policy instruments (e.g., marine spatial planning, pollution charges, payment for ecosystem services schemes)
• 5Evaluation of blue economy investment opportunities⁹

3.1.4 Ocean-Specific Applications

1For ocean accounting specifically, monetary valuation is particularly valuable for:

Application	Value Added by Monetary Valuation
Fisheries management	Resource rent trends signal sustainability; depletion costs inform net income measures
Marine protected areas	Cost-benefit framing for protection decisions; ecosystem service value demonstrates returns on conservation investment
Coastal development	Quantifying trade-offs between development revenues and lost ecosystem services
Blue carbon markets	Integration with carbon markets and climate policy; exchange values for carbon credits
Maritime spatial planning	Common metric for multi-use trade-off analysis across fishing, shipping, energy, conservation

3.2 When Monetary Valuation Should Not Be Applied

1Monetary valuation should not be pursued, or should be approached with caution, in the circumstances set out below.

3.2.1 Physical Accounts Are Sufficient

1For many policy questions, physical accounts on ecosystem extent, condition, and service flows provide sufficient information without requiring monetary valuation. Physical accounts may be preferred when:¹⁰

• 2The policy question relates to biophysical thresholds (e.g., maximum sustainable yield, critical habitat area, water quality standards)
• 3Stakeholders have legitimate concerns about commodification of marine ecosystems
• 4Data and capacity constraints make reliable monetary valuation infeasible
• 5Primary users require physical metrics for environmental management (e.g., tonnes of carbon, hectares of habitat, population abundance)

6Recommendation: Always compile and publish physical accounts. Consider monetary valuation as a complement, not a replacement, for physical measurement.

3.2.2 Data Quality Concerns

1Monetary valuation should be approached cautiously when:¹¹

• 2Underlying physical data (extent, condition, service flows) are of insufficient quality or uncertain
• 3Available valuation methods require assumptions that cannot be validated from observed data
• 4The uncertainty range in monetary estimates is so large as to undermine decision-usefulness
• 5Value transfer from other contexts involves ‘institutional mismatch’ (different regulatory or property rights regimes) or ‘ecological mismatch’ (different ecosystem characteristics)

6In such cases, it may be preferable to:

• 7Present ranges rather than point estimates, with explicit documentation of uncertainty
• 8Clearly document methods, assumptions, and data quality limitations
• 9Focus resources on improving physical data before attempting valuation
• 10Use qualitative assessments alongside limited monetary data

3.2.3 Risk of Misinterpretation

1Special care is needed to avoid situations where monetary values may be misinterpreted. Monetary values from accounts:¹²

• 2Do not represent the ‘true’ or ‘total’ value of ocean ecosystems (they measure exchange value, not total welfare)
• 3Do not justify ecosystem destruction if monetary ‘compensation’ is paid (non-substitutability and irreversibility matter)
• 4Do not capture all relevant considerations for decision-making (cultural values, equity, rights, and biodiversity intrinsic value)
• 5Are not precise even when presented as single numbers (they reflect estimation assumptions and uncertainty)

6Clear communication (see Section 3.9) is essential to manage these risks. Compilers should make explicit the limitations of monetary values and the complementary information required for sound decision-making.

3.2.4 Inappropriate Aggregation

1Caution is required when aggregating monetary values across:¹³

• 2Multiple ecosystem services: Risk of double-counting (e.g., water flow regulation and water supply may overlap; nursery habitat services and fish provisioning services have an intermediate-final service relationship)
• 3Different time periods: Requires appropriate discounting and adjustment for price changes; nominal values from different years are not directly comparable
• 4Spatial units: Different institutional contexts (e.g., open-access versus managed access fisheries) may make aggregation misleading
• 5Different methods: Mixing values from methods with different uncertainty characteristics (e.g., observed prices versus simulated exchange values) requires careful documentation and sensitivity analysis

6Decision rule — nursery services and resource rent: When the resource rent method is used to value fish provisioning services, nursery habitat services (e.g., coral reef or mangrove nursery function) must not be separately valued in the same account. The resource rent is a residual that already captures the combined contribution of all ecosystem inputs to the fishery, including nursery function. Valuing nursery services separately alongside resource rent would double-count that contribution. Separate valuation of nursery services is appropriate only when an alternative method (such as the productivity change method) is used and is explicitly specified to exclude the nursery contribution from the production function. This rule applies at the level of a single accounting area; compilers should cross-check it when populating service rows in monetary supply and use tables. See also Section 3.8.2.

3.3 Valuation in the SEEA Framework

3.3.1 Exchange Values versus Welfare Values

1A key characteristic of ecosystem accounts is that they use exchange values, defined as “the values at which goods, services, labour or assets are in fact exchanged or else could be exchanged for cash.”¹⁴ For the vast majority of entries in national accounts, exchange values are measured using data from observed transactions involving market prices. Market prices are amounts of money that willing buyers pay to acquire something from willing sellers.¹⁵

2Exchange values differ from welfare values, which are commonly used in environmental cost-benefit analysis and include consumer surplus.¹⁶ Consumer surplus is the difference between what is paid for a good or service and what a person is willing to pay. The accounts record the former (exchange value), not the latter (total willingness to pay including surplus).¹⁷

3This distinction has important implications for ocean accounting:

Concept	Exchange Values	Welfare Values
Definition	Values at which items are or could be exchanged for cash	Total benefit including consumer/producer surplus
Primary Use	National accounts, balance sheets, GDP	Cost-benefit analysis, impact assessment
Includes Surplus	No	Yes
Basis	Observed or imputed transactions	Willingness to pay/accept
Aggregation	Directly comparable with economic aggregates	Not comparable with national accounts

4The SNA 2025 clarifies that the integrated framework does not attempt to determine the utility of flows and stocks within its scope. Rather, it measures the current exchange value of entries in the accounts in monetary terms.¹⁸ Exchange values align with national accounting conventions and are the appropriate concept for entries in ecosystem accounts. Welfare values remain important for cost-benefit analysis, but they yield estimates that cannot be directly compared with GDP, national wealth, or other aggregates from the System of National Accounts. Practitioners should use this distinction as a first check when selecting or interpreting valuation studies for ocean accounting purposes.

3.3.2 The SNA Production Boundary

1Ecosystem services as defined in SEEA EA fall outside the production boundary of the SNA. The SEEA EA extends this boundary by recording flows of ecosystem services.¹⁹ This extension creates a framework where:

• 2Provisioning services (e.g., wild fish harvest, aquaculture inputs, coastal timber) contribute to SNA benefits: goods and services already within the SNA production boundary
• 3Regulating services (e.g., coastal protection, carbon sequestration, water purification) typically contribute to non-SNA benefits that are outside the production boundary
• 4Cultural services (e.g., marine recreation, coastal amenity) may contribute to both SNA and non-SNA benefits depending on institutional arrangements²⁰

5For ocean accounting, this means that the value of many marine ecosystem services, such as coastal protection, carbon sequestration, and recreation, requires estimation using non-market valuation methods since direct market transactions are rarely observed.

6Classifying cultural services as SNA or non-SNA benefits: Because the boundary for cultural services depends on national institutional arrangements, compilers should apply the following three-question checklist before classifying a specific cultural service (e.g., marine recreation by residents):²¹

1. 7Is a monetary transaction for this service already recorded in national accounts (e.g., tourism receipts, recreation-sector output)?
2. 8Is the economic unit receiving the service a market producer whose output enters GDP?
3. 9Is the benefit already captured in existing GDP aggregates through the expenditure or production approach?

10If the answer to any question is yes, treat the service as contributing to SNA benefits. If the answer to all three questions is no, treat it as contributing to non-SNA benefits. This applies at the level of each specific service flow and beneficiary group. The same marine ecosystem may supply both SNA and non-SNA cultural services to different beneficiaries. See SEEA EA paras. 5.25—5.28 for classification of ecosystem service beneficiaries.

3.3.3 Status of SEEA EA Valuation Chapters

1The specific status of different components of SEEA EA affects the authority of valuation guidance for Core badge circulars.

2The United Nations Statistical Commission at its fifty-second session in March 2021 (Decision 52/101):

• 3Adopted SEEA EA chapters 1-7 (accounting framework and physical accounts) as an international statistical standard
• 4Recognized that chapters 8-11 describe “internationally recognized statistical principles and recommendations” for valuation of ecosystem services and assets in a context coherent with the SNA for countries undertaking valuation
• 5Noted chapters 12-14 as describing applications and extensions²²

6Implication for Ocean Accounting: The physical accounting framework has full international statistical standard status. The valuation guidance represents best practice recommendations that countries may apply when undertaking valuation, rather than mandatory requirements. This circular follows these recommendations whilst acknowledging their status.

7The characterisation above is drawn directly from the text of UNSC Decision 52/101. The Commission’s choice of the phrase “internationally recognized statistical principles and recommendations” rather than “international statistical standard” for chapters 8-11 was deliberate. At the time of adoption, monetary valuation methods had not reached the same level of methodological maturity as the physical accounting framework in chapters 1-7. In practical terms, this means that countries are encouraged but not required to implement monetary valuation, and where they do so they should follow the principles and recommendations set out in those chapters. For Core badge circulars, which draw only on adopted standards, this circular is careful to present the valuation guidance as authoritative best practice rather than as binding statistical standard.

8The System of National Accounts 2025 (SNA 2025) was adopted by the United Nations Statistical Commission at its fifty-fifth session in 2024 as the updated international statistical standard for national accounts, replacing SNA 2008. The SEEA EA 2021 valuation recommendations remain the operative guidance for ecosystem accounting pending any future revision of SEEA EA, and SNA 2025 does not amend the SEEA EA valuation chapters. Where this circular cites both SNA 2008 and SNA 2025 paragraph numbers, the SNA 2025 reference is authoritative for current practice.²³

3.4 Valuation Method Preference Order

1The SEEA EA establishes a preference order for valuation methods based on their proximity to observed market prices and their alignment with exchange value concepts.²⁴

3.4.1 Five-Level Preference Hierarchy

1Table 1 summarises the SEEA EA preference order with examples relevant to ocean accounting.

2Table 1: SEEA EA valuation method preference order

Preference level	Description	Ocean accounting examples
1. Directly observable prices	Prices observed in actual market transactions for the ecosystem service or asset	Fish quota (ITQ) trading prices; carbon credit prices from verified offset markets; water abstraction rights; aquaculture site lease fees
2. Prices from markets for similar goods/services	Prices observed in markets for goods/services sufficiently similar to the one being valued	Prices from comparable fisheries in other jurisdictions; rental values from comparable coastal sites; timber prices from comparable mangrove forests
3. Prices embodied in market transactions	Values estimated from market transactions where the ecosystem contribution is embedded	Resource rent from fisheries (gross output minus all non-ecosystem inputs); hedonic property prices reflecting coastal amenity; productivity change method for nursery services
4. Prices based on revealed expenditures (costs)	Values estimated from actual expenditures on related goods/services that have already been made	Averting behaviour (defensive expenditure actually incurred); travel expenditure (consumer expenditure method)
5. Prices based on expected expenditures or markets	Values estimated from modelled or hypothetical expenditures	Replacement cost (where the replacement has not actually been built); simulated market prices; avoided damage cost estimates based on modelled flood scenarios

Note on replacement cost and preference level: Replacement cost belongs at Preference Level 5 (expected/simulated expenditure) in the large majority of ocean accounting applications, because the replacement structure (e.g., a seawall, constructed wetland) is hypothetical: it has not been built and its cost has not been observed. Replacement cost may be classified at Level 4 only in the exceptional case where an equivalent replacement has actually been constructed and the observed construction costs are available from administrative records. See Section 3.6 for full guidance on applying these methods.

3Methods at lower preference levels introduce greater uncertainty and require stronger assumptions. Where feasible, compilers should aim for methods at preference levels 1-3, which rely on observed market data. Because methods at levels 4-5 rest on weaker assumptions, their application should be accompanied by explicit documentation of assumptions and sensitivity analysis.

3.4.2 Decision Tree for Method Selection

1The following decision tree provides a simplified guide to selecting a valuation method based on data availability, following the SEEA EA preference order from most to least preferred. Figure 1.9.1 traces this five-level preference order. Each data-availability gate routes compilers from directly observed prices at Level 1 to modelled expected costs at Level 5.

Figure 1.9.1 A five-level SEEA EA preference order routes compilers from direct market prices down to expected costs when higher-tier data are unavailable. [a] Yes at a gate selects that preference. [b] No passes to the next, less-preferred tier. Preference 5 is the non-preferred fallback. Source: TG-1.9 Valuation Methods, Section 3.4 (five-level preference hierarchy) and Table 1. Adapted from: SEEA EA 2024, Chapters 8-9 (monetary valuation); preference order per SEEA EA preference hierarchy for valuation methods.

2Sections 3.5 and 3.6 set out methods for preference levels 1-3 and 4-5 respectively, each with specific ocean accounting examples and worked calculations.

3.5 Valuation Methods Appropriate to Accounts (Preference Levels 1-3)

3.5.1 Directly Observable Prices (First Preference)

1Where prices are directly observable in market transactions, these provide the most reliable basis for valuation. Examples relevant to ocean accounting include:

Ocean Context	Directly Observable Price
Commercial fisheries	Fish quota prices (where ITQ systems exist)
Aquaculture	Site lease/license fees reflecting ecosystem contribution
Coastal forestry	Stumpage values for mangrove timber
Blue carbon	Carbon credit prices from verified offset markets
Water abstraction	Water rights prices (coastal/estuarine contexts)

2These directly observed values reflect the current institutional context and should be applied in accounts even when the resulting values might appear “low” relative to the perceived importance of the ecosystem. As the SEEA EA notes, resource rents for natural resources extracted in open-access contexts will tend toward zero, and this is a well-understood result that reflects institutional arrangements rather than low ecosystem importance.²⁵

3Care should be taken to understand the size of markets and their maturity because the use of prices from small or immature markets may not be sufficiently representative for use in ecosystem accounting. To the extent that the recorded values are considered ‘low’, there may be an interest in estimating complementary values on the basis of alternative institutional contexts and market settings. These hypothetical values should not be recorded in ecosystem accounts but may be presented in complementary accounts.²⁶

3.5.2 Prices from Similar Markets (Second Preference)

1When market prices for a specific ecosystem service are not observable, prices from markets for similar goods and services may provide an approximation. The SNA states that “if there is no appropriate market in which a particular good or service is currently traded, the valuation of a transaction involving that good or service may be derived from the market prices of similar goods and services by making adjustments for quality and other differences.”²⁷

2For ocean accounting, this might include:

• 3Using rental prices from comparable coastal land parcels for aquaculture sites
• 4Applying fish prices from similar species/fisheries in other jurisdictions
• 5Using carbon prices from comparable ecosystem types (e.g., terrestrial forest carbon prices for mangrove carbon)
• 6Applying timber prices from comparable terrestrial forests to value mangrove timber provisioning

7Caution: Value transfer across different institutional and ecological contexts requires careful adjustment for differences. Institutional mismatch (where source study contexts differ from accounting application contexts) is a risk.²⁸ The most widespread example of applying this approach in the national accounts is the estimation of the imputed rent for owner-occupied dwellings, where the observed rents paid by tenants are commonly used to apply a ‘similar markets’ method to estimate rents for owner-occupied dwellings (adjusting for variations in rents associated with the location and characteristics of the dwellings).²⁹

3.5.3 Prices Embodied in Market Transactions (Third Preference)

1These methods estimate ecosystem service values from data on market transactions where the ecosystem contribution is embedded but not directly observable:

2Residual Value and Resource Rent Methods

3The resource rent method estimates value by taking gross output value and deducting costs of all other inputs including labour, produced assets, and intermediate inputs.³⁰ For marine fisheries, this means:

Resource rent = Gross output value of catch
              - Intermediate consumption (fuel, ice, repairs)
              - Compensation of employees
              - Taxes on production net of subsidies (including resource access fees, licence fees, royalties)
              - Consumption of fixed capital (vessel depreciation)
              - Return on produced assets (normal profit on vessel investment)
              - Imputed cost of self-employed labour

4The residual represents the contribution of the marine ecosystem to the production value. This method is commonly applied for valuing wild fish provisioning services. This formulation follows the structure set out in SEEA CF Annex A5.1, which defines the resource rent as the residual after deducting all user costs of produced assets and labour from the gross value of output.³⁰ In the fisheries context, the inclusion of an imputed cost of self-employed labour is essential, as owner-operators are common in many small-scale fisheries, and omitting this cost would inflate the residual. Similarly, the return on produced assets (i.e. normal profit on the capital invested in vessels and gear) must be deducted to isolate the ecosystem contribution from the return to produced capital. Taxes on production net of subsidies, including resource access fees, licence fees, and royalties payable to the resource owner (commonly government), must also be deducted explicitly. In jurisdictions where government retains resource ownership, access fees represent a transfer of the resource rent to the state. Omitting them causes the compiler-calculated residual to overstate the unappropriated rent and risks double-counting government revenue already recorded in national accounts.³¹

5The calculation is subject to variations in prices of outputs and inputs that can be considerable under market conditions, resulting in high annual volatility of estimates. For this reason, statistical offices tend to use 3-5 year moving averages when calculating residual value.³²

6Hedonic Pricing

7Estimates the differential premium on property values derived from proximity to marine and coastal environmental attributes such as beach quality, water clarity, or marine protected areas.³³ This method is particularly relevant for valuing coastal amenity and visual amenity services. Applications of hedonic pricing have grown substantially in recent years, with studies documenting property premiums for nature views, open spaces, beach access, and water quality.³⁴

8Productivity Change Method

9Estimates value based on the marginal contribution of ecosystem inputs to production functions. For ocean contexts, this includes estimating the productivity contribution of:

• 10Nursery habitat services to fishery production
• 11Water quality services to aquaculture productivity
• 12Coastal vegetation services to agricultural productivity in adjacent lands³⁵

13The productivity change method estimates an exchange value that is consistent with the SNA by estimating a production function directly, based on micro-level data on physical inputs and outputs at the site (e.g. farm) level. The econometric estimation of the equation provides a direct estimate of the marginal productivity of the input(s). Multiplying the marginal productivity by the price of the output gives the exchange value of the ecosystem service.³⁶ Such a method requires the availability of micro data to make the estimation, which can be data intensive.

3.6 Valuation Methods Requiring Caution (Preference Levels 4-5)

3.6.1 Revealed Expenditure Methods (Fourth Preference)

1These methods derive prices from actual expenditures on related goods and services that have already been made and are observable in administrative or survey data.

2Boundary between averting behaviour and replacement cost: This distinction applies before selecting a Level 4 method. Averting behaviour (defensive expenditure) requires that an actual expenditure has been made and recorded: it is a real cost that appears in national accounts or administrative data. Where the expenditure is hypothetical (the replacement or protective structure has not been built and its cost has not been observed), the correct method is replacement cost at Preference Level 5, not Level 4. Compilers must verify that an actual expenditure record exists before applying a Level 4 cost-based method. The mere plausibility of a future expenditure does not qualify. See Section 3.6.2 for replacement cost guidance.

3Averting Behaviour (Defensive Expenditure)

4Based on expenditures to mitigate or eliminate damages from adverse environmental impacts.³⁷ Ocean examples include:

• 5Expenditure on desalination or treatment when natural water purification services decline
• 6Health expenditure related to poor coastal water quality
• 7Coastal engineering expenditure to protect against degraded natural defences: applicable at Level 4 only where the engineering work has actually been undertaken and costs are on record. Where the works are hypothetical or planned but not yet constructed, the correct method is replacement cost at Level 5

8Travel Expenditure

9Uses travel costs as a proxy for recreation service values.³⁸ The consumer expenditure method, which uses direct out-of-pocket expenditures (transport, fuel, accommodation, fees), provides exchange values appropriate for accounts. This differs from the traditional travel cost method that estimates total willingness to pay including consumer surplus.

10For marine and coastal recreation, consumer expenditure data from tourism statistics can provide a basis for valuation, though care is needed to:

• 11Isolate the marine/coastal component from total trip expenditure
• 12Attribute expenditure to specific ecosystem assets
• 13Avoid double-counting with coastal property amenity values

3.6.2 Expected or Simulated Expenditure Methods (Fifth Preference)

1Where observed prices and expenditures are not available, methods based on expected or simulated expenditures may be applied:

2Replacement Cost

3Estimates the cost of replacing a single ecosystem service using a process that provides equivalent benefits.³⁹ For ocean accounting, common applications include:

Ecosystem Service	Replacement Cost Basis
Coastal protection (mangroves, reefs)	Engineered sea wall or breakwater
Water purification (wetlands)	Constructed treatment facility
Nursery services (seagrass)	Hatchery and stocking programs
Carbon sequestration	Direct air capture or alternative mitigation

4Validity conditions: The replacement must (i) provide exactly the same function, (ii) be the least-cost alternative, and (iii) have evidence of actual demand.⁴⁰

5Avoided Damage Cost

6Estimates value based on the costs of damages that would occur due to loss of services.⁴¹ This is particularly relevant for coastal protection services, where avoided damages from storm surge, flooding, and erosion can be estimated using flood risk models. The validity of the avoided damage cost method depends on conditions including that the damages avoided can be related to a specific service, and that people would be willing to pay an amount to actually avoid the damage.⁴²

7Simulated Exchange Value (SEV)

8Estimates the price and quantity that would prevail if the ecosystem service were traded in a hypothetical market.⁴³ The SEV method uses demand curves estimated from travel cost or stated preference studies to simulate what price would clear a hypothetical market for the service. Whilst more complex, this method can provide exchange-value-consistent estimates where other methods are not feasible.

Case illustration: UK Marine Natural Capital Accounts (JNCC/Cefas)

The UK Joint Nature Conservation Committee (JNCC) and Centre for Environment, Fisheries and Aquaculture Science (Cefas) compiled an initial set of natural capital accounts for UK marine and coastal ecosystems. At the time of their study, an estimated 36% of UK marine habitats were classified as unmapped or unknown.⁴⁴ For those habitats where data were available, the study applied several valuation methods consistent with SEEA principles: replacement cost for waste mediation (phosphorus, nitrogen, BOD) by littoral sediments, coastal saltmarsh, shelf-sea, and deep-sea ecosystems; replacement cost for coastal protection based on the cost of constructing equivalent seawalls; abatement cost for carbon burial in marine sediments; and the resource rent approach for marine fish and shellfish, offshore renewable energy (wind), and abiotic products (marine aggregates). This study illustrates both the feasibility of applying the SEEA EA preference order to marine assets and the practical constraint that incomplete habitat data imposes on full valuation coverage.⁴⁵

3.7 Valuation Methods Inappropriate for Accounts

1Certain valuation methods, whilst useful for other analytical purposes, do not yield exchange values appropriate for direct recording in ecosystem accounts.

3.7.1 Consumer Surplus Measures

1Methods that estimate total willingness to pay including consumer surplus are not appropriate for direct entry in accounts. Consumer surplus cannot be transferred between transactors and represents value that is not exchanged.⁴⁶ However:

• 2Demand curves from such studies can inform SEV calculations
• 3Welfare values remain important for cost-benefit analysis and impact assessment
• 4A “bridge table” between exchange and welfare values can be compiled as a complementary account⁴⁷

3.7.2 Stated Preference Methods (Direct Application)

1Contingent valuation and choice experiment results that estimate total willingness to pay should not be directly entered in accounts. Stated preference data that have not been adjusted for exchange value consistency are not appropriate account entries regardless of data availability or the absence of alternative methods.⁴⁸

2Appropriate use of stated preference data: If stated preference data are the only available source for a given service, they should be used only as inputs to SEV calculations, adjusting for consumer surplus to derive the simulated exchange value, and clearly flagged as Level 5 estimates requiring sensitivity analysis. They should not be entered as direct account values. Compilers using stated preference data in this way should cross-reference Section 3.6.2 on SEV methodology and document the adjustment procedure explicitly.⁴⁸

3Other appropriate uses:

• 4For complementary welfare analysis
• 5In bridge tables linking exchange and welfare values (see Section 3.7.1)

3.7.3 Non-Use Values

1Non-use values (existence values, bequest values, option values) are not within scope of ecosystem service values in accounts since there are no inherent transactions associated with these values.⁴⁹ This exclusion matters for ocean accounting given the high perceived non-use values associated with:

• 2Iconic marine species (whales, dolphins, sea turtles)
• 3Unique marine ecosystems (coral reefs, kelp forests)
• 4Marine biodiversity in general

5Whilst these values may be relevant for wider policy analysis and public communication, they represent a different measurement concept that should not be mixed with exchange-value-based accounts. Where non-use values are considered important for policy purposes, the SEEA EA framework accommodates their presentation through complementary accounts and thematic analyses. Chapter 12 of the SEEA EA describes how welfare values, including non-use values, can be reported in supplementary tables alongside exchange-value-based accounts, using a bridge-table approach that makes the relationship between the two measurement concepts explicit.⁴⁷ This approach allows policymakers to access information on non-use values without compromising the conceptual integrity of the core accounts. For ocean accounting, compilers may wish to consider producing such complementary analyses for ecosystem types or species where non-use values are known to be large relative to exchange values, such as iconic marine habitats and species.

3.7.4 Restoration Costs for Total Asset Valuation

1The SEEA EA distinguishes between replacement costs (appropriate for individual services) and restoration costs (the cost of restoring an ecosystem as a whole). Restoration costs should not be used to value ecosystem assets, as this would make it impossible to separately assess the benefits of ecosystem restoration: they would by definition equal the costs.⁵⁰ However, restoration costs can provide policy-relevant information in certain contexts and may be presented in complementary accounts.

3.8 Worked Example: Applying the Preference Order to Marine Ecosystem Services

1The following worked example covers a coastal marine ecosystem and illustrates step-by-step method selection for multiple ecosystem services supplied by a hypothetical coastal accounting area.

3.8.1 Scenario Description

1Accounting Area: A coastal region encompasses 500 hectares of mangrove forest, 200 hectares of coral reef, and 5,000 hectares of continental shelf waters. The area supports commercial fisheries (targeting reef and pelagic fish), recreational diving, and provides coastal protection to 10 km of populated coastline. An ITQ system for fishing is not in place; catch is managed through annual total allowable catch (TAC) limits. Carbon markets operate at national level with verified blue carbon offsets for mangrove conservation.

2Objective: Compile monetary values for four key ecosystem services (fish provisioning, coastal protection, carbon sequestration, and recreation) using the SEEA EA preference order.

3.8.2 Fish Provisioning Service

1Step 1: Check for directly observable prices (Preference 1)

• 2No ITQ market exists → No directly observable quota prices
• 3Fish are sold at observed market prices, but these are product prices not ecosystem service prices

4Step 2: Check for similar markets (Preference 2)

• 5A neighboring jurisdiction with comparable species and fishing methods operates an ITQ market where quota prices average USD 800 per tonne
• 6However, institutional differences (this jurisdiction has TAC but no ITQ) mean direct price transfer is not appropriate without adjustment

7Step 3: Apply prices embodied in transactions (Preference 3)

• 8Method selected: Resource rent
• 9Data available: National fishery statistics provide gross output value, intermediate consumption, employment, and vessel capital stock data

10Calculation:

Gross output value (landed value):                              USD 5,200,000
Less: Intermediate consumption:                                 USD 1,800,000
Less: Compensation of employees:                                USD 1,200,000
Less: Taxes on production net of subsidies (access fees,
      licence fees, royalties -- nil in this jurisdiction):     USD         0
Less: Consumption of fixed capital:                             USD   400,000
Less: Return on produced assets (5%):                           USD   300,000
Less: Imputed self-employed labour:                             USD   500,000
= Resource rent:                                                USD 1,000,000

Annual catch: 2,000 tonnes
Resource rent per tonne: USD 500

Note: The taxes/access fees line is shown explicitly as nil here because the illustrative jurisdiction has no royalty or licence fee regime. In jurisdictions where government charges access fees or royalties, this line will carry a positive deduction. Omitting it where fees exist would overstate the resource rent.

11Result: Fish provisioning service valued at USD 500 per tonne using resource rent method (Preference level 3). This represents the ecosystem contribution after deducting all other input costs. See also Section 3.2.4: because resource rent is used here, nursery habitat services from the reef should not be separately valued in this account.

3.8.3 Carbon Sequestration Service

1Step 1: Check for directly observable prices (Preference 1)

• 2National blue carbon offset market exists for mangrove conservation
• 3Verified carbon credits from mangroves trade at USD 15 per tonne CO2-equivalent
• 4Method selected: Observed market prices (for credit valuation)

5Step 2: Distinguish physical service flow from monetisable verified credits

6The physical service flow (gross CO2 sequestration) is the quantity recorded in the physical account. The monetary value attaches to the verified offset credits that can be issued against that sequestration. The two quantities differ because verified carbon markets apply permanence buffers and leakage deductions to manage the risk that sequestered carbon is not permanently retained.

7Calculation:

Physical service flow (gross sequestration):
  Mangrove sequestration rate: 8 tonnes CO2/ha/year
  Mangrove extent: 500 hectares
  Annual gross sequestration: 4,000 tonnes CO2
  → Record 4,000 t CO2/year in the physical supply account

Monetisable verified credits:
  Less: Permanence buffer deduction (15%, illustrative --
        consistent with a moderate-risk Verra VM0033
        buffer contribution for credits specifically):  600 tonnes CO2
  Net credits eligible for market price:              3,400 tonnes CO2

  Note: The 15% buffer is a requirement of the credit instrument,
  not a property of the sequestration service. It applies when
  valuing verified credits; do not apply it when recording the
  physical service flow in the physical account.

Monetary valuation:
  Net credits: 3,400 tonnes CO2
  Market price: USD 15 per tonne CO2
  Annual service value: USD 51,000

Where no verified credits exist: If the jurisdiction has no operating verified carbon offset market, do not apply prices from other markets directly. Instead, use a Level 5 simulated exchange value method (Section 3.6.2), and document the method and assumptions explicitly.

8Result: Carbon sequestration service valued at USD 51,000 annually using observed carbon credit prices applied to net verified credit units (Preference level 1). The gross physical flow of 4,000 t CO2/year is recorded separately in the physical account.

3.8.4 Coastal Protection Service

1Step 1: Check for directly observable prices (Preference 1)

• 2No market for coastal protection services exists
• 3Property owners do not pay for protection services provided by reefs and mangroves

4Step 2: Check for similar markets (Preference 2)

• 5No comparable markets for natural coastal protection

6Step 3: Check for prices embodied in transactions (Preference 3)

• 7Hedonic pricing study of coastal properties would require extensive data collection
• 8Productivity change method not applicable (no direct production function)

9Step 4: Assess validity conditions for replacement cost (Preference 5)

• 10No equivalent seawall has been built in this area; the replacement is hypothetical → Preference Level 5 applies (not Level 4)
• 11Engineering studies for the region indicate that a seawall providing equivalent protection would cost USD 12,000 per km of coastline

12Validity conditions test:

Condition	Evidence	Met?
(i) Equivalent function: the seawall provides the same flood and erosion protection as the reef/mangrove system for the 10 km coastline	Regional coastal engineering survey confirms a 1.2 m freeboard seawall at this location would replicate modelled protection levels under a 1-in-50-year storm event	Yes
(ii) Least-cost alternative: no cheaper engineered option can provide the same protection	Comparative cost estimates for riprap revetment (USD 18,000/km) and hybrid living shoreline (USD 22,000/km) confirm the seawall at USD 12,000/km is the least-cost engineered substitute	Yes
(iii) Evidence of actual demand: beneficiaries would actually procure the replacement if natural protection were lost	Coastal development master plan for the region includes a contingency seawall provision; two recent development applications cite natural reef as justification for reduced setbacks, confirming revealed demand	Yes

If any condition cannot be demonstrated, the method should be applied at Level 5 with correspondingly stronger uncertainty documentation and sensitivity analysis, and the failed condition flagged in the disclosure statement.

13Calculation:

Note: Cost figures in this example are purely illustrative and do not represent actual engineering costs.

Protected coastline: 10 km
Replacement cost: USD 12,000 per km
Annual service value (assuming 50-year asset life and 4% discount):
  = USD 120,000 / 21.48 (annuity factor) = USD 5,586 per year

Alternatively, using direct annual equivalent:
  = (USD 120,000 x 0.04) / (1 - (1.04)^-50) = USD 5,586 per year

14Result: Coastal protection service valued at USD 5,586 annually using replacement cost method (Preference level 5). Sensitivity analysis should be conducted on asset life (30-70 years) and discount rate (3-5%).

3.8.5 Recreation Service

1Step 1: Check for directly observable prices (Preference 1)

• 2Dive operators charge fees, but these are for guide services not for the ecosystem service itself
• 3Marine protected area has no entry fee

4Step 2: Check for similar markets (Preference 2)

• 5Nearby marine parks charge entry fees of USD 10 per visitor
• 6However, institutional difference (this site is free-access) means fee cannot be directly applied

7Step 3: Check for prices embodied in transactions (Preference 3)

• 8No hedonic property study available for this specific area

9Step 4: Apply revealed expenditure methods (Preference 4)

• 10Method selected: Consumer expenditure
• 11Tourism statistics record visitor numbers and expenditure on transport, accommodation, and dive operator fees

12Calculation — raw expenditure:

Annual visitors: 15,000
Average expenditure per visitor on marine recreation: USD 80
  (Transport USD 30, accommodation USD 35, dive fees USD 15)
Total consumer expenditure: USD 1,200,000

13Step 5: Isolate the marine ecosystem component

14Not all trip expenditure is attributable to the marine ecosystem service. Accommodation costs (USD 35 of USD 80) serve the overnight stay regardless of the marine destination, and they should generally be excluded unless the marine attribute is demonstrably the primary trip driver. One accepted allocation approach uses visitor motivation data:

Visitor motivation survey: 65% of visitors cite marine recreation
  as their primary trip motivation (the remainder cite coastal
  amenity, cultural sites, or general relaxation)

Marine-attributable expenditure:
  Transport + dive fees component = USD 45 per visitor
  Marine motivation share applied to accommodation:
    USD 35 x 65% = USD 22.75 per visitor
  Total marine-attributable expenditure per visitor:
    USD 45 + USD 22.75 = USD 67.75

Annual marine-attributable expenditure:
  15,000 visitors x USD 67.75 = USD 1,016,250

15Where motivation survey data are not available, a conservative approach is to include only purpose-specific fees (transport and dive fees) and exclude accommodation. Compilers should document the allocation method and reference tourism satellite account methodology for multi-purpose trips.⁵¹

16Result: Recreation service valued at approximately USD 1,016,250 annually using consumer expenditure method with marine motivation allocation (Preference level 4). Care must also be taken to avoid double-counting with coastal property amenity values already captured in any hedonic pricing estimate.

3.8.6 Summary Table

1Table 2: Valuation method selection summary

Ecosystem Service	Method Selected	Preference Level	Annual Value	Rationale
Fish provisioning	Resource rent	3	USD 1,000,000	Observed market data for fish sales; resource rent isolates ecosystem contribution
Carbon sequestration	Market price (net credits)	1	USD 51,000	Blue carbon credit market provides directly observable prices; value applied to net verified credit units after permanence buffer
Coastal protection	Replacement cost	5	USD 5,586	No observed market; replacement hypothetical; validity conditions tested and met
Recreation	Consumer expenditure (marine-allocated)	4	USD 1,016,250	Visitor expenditure data available; marine motivation allocation applied

2Interpretation: These four services were selected specifically to be non-overlapping for this illustrative example: they have distinct beneficiary populations (fishing industry, carbon market participants, coastal residents, recreational visitors) and draw on distinct ecosystem processes (provisioning, carbon cycling, physical protection, amenity). Because of this non-overlap, the four values can be summed to an indicative total of approximately USD 2,072,836 for this accounting area. In real compilations, compilers must confirm non-overlap before summing service rows (see Section 3.2.4 for double-counting cautions, including the specific rule that nursery habitat services must not be separately valued when resource rent is used for fish provisioning). The corrected coastal protection value of USD 5,586 reflects the annuity factor of 21.48 at 4% over 50 years. All values should be presented alongside physical accounts showing mangrove extent, reef condition, fish stock biomass, and visitor numbers.

3.8.7 Ecosystem Asset Valuation — Simplified NPV Illustration

1This section synthesises the four service values from Table 2 into a simplified ecosystem asset value using the net present value (NPV) approach. This is an introductory illustration only. TG-3.1 provides full guidance on ecosystem asset accounts.

2Step 1: Annual service flow

Total annual service flow (sum of four services):
  Fish provisioning:      USD 1,000,000
  Carbon sequestration:   USD    51,000
  Coastal protection:     USD     5,586
  Recreation:             USD 1,016,250
  Total:                  USD 2,072,836

3Step 2: Projection assumption

4For this simplified illustration, assume constant real service flows over the asset life (no growth or decline trend). In practice, compilers should assess whether a trend, positive (e.g., reef restoration) or negative (e.g., climate-related degradation), is observable and use that trend in the projection. TG-3.1 discusses projection methods in detail.

5Step 3: Discount rate

6Illustrative rate: 4% social discount rate (reflecting a mix of collective-benefit services in this portfolio). See Section 3.1.2 for guidance on rate selection. Sensitivity analysis is mandatory.

7Step 4: Time horizon

8Illustrative horizon: 50 years (broadly consistent with planning horizons for coastal ecosystems). This is a practical simplification. Ecosystem assets are long-lived, and a perpetuity formula may be more appropriate in some contexts.

9Step 5: NPV calculation

NPV = Annual flow × Annuity factor (4%, 50 years)
    = USD 2,072,836 × 21.48
    = USD 44,525,317

Annuity factor = [1 - (1 + r)^-n] / r
              = [1 - (1.04)^-50] / 0.04
              = 21.48

10Table 3: Sensitivity analysis — ecosystem asset NPV

Discount rate	Time horizon	Annuity factor	NPV
3% (SIDS conservative benchmark)	50 years	25.73	USD 53,313,934
4% (primary illustration)	50 years	21.48	USD 44,525,317
4%	30 years	17.29	USD 35,839,815
7%	50 years	13.80	USD 28,605,137
7%	30 years	12.41	USD 25,723,875

11The sensitivity table demonstrates that the asset value is sensitive to both discount rate and time horizon assumptions. The spread between the 3%/50-year and 7%/30-year estimates is nearly twofold. Transparent disclosure of these assumptions is therefore essential. See TG-3.1 for full ecosystem asset account methodology, including how to handle multiple service types with different discount rates, depreciation of ecosystem assets, and time-series consistency.

3.9 Communication and Transparency

3.9.1 Key Messages to Communicate

1When presenting monetary values from ocean accounts, compilers should communicate the key messages summarised in Table 3.9.1 below⁵².

2Table 3.9.1: Key messages to communicate alongside monetary values

Message	Description
Valuation concept	Monetary values are based on exchange values consistent with national accounting concepts — they represent what ecosystem services would be exchanged for, not their total economic value or welfare value.
Complementarity	Monetary values should be interpreted alongside physical data on ecosystem extent, condition, and service flows.
Uncertainty	All monetary estimates involve uncertainty, which should be acknowledged and where possible quantified.
Institutional context	Values reflect current institutional arrangements (property rights, regulations, markets) which may understate long-term importance.
Limitations	Monetary values do not capture non-use values, and low monetary values do not mean ecosystems are unimportant.

3.9.2 Documentation Requirements

1Transparent documentation should include the elements summarised in Table 3.9.2 below⁵³.

2Table 3.9.2: Elements of transparent valuation documentation

Element	Description
Methods	Clear description of valuation methods used for each ecosystem service and asset category.
Data sources	Description of primary data sources and their quality.
Key assumptions	Explicit statement of assumptions, particularly regarding discount rates, time horizons, and future projections.
Sensitivity analysis	Assessment of how results change with alternative assumptions.
Method comparison	Where feasible, comparison of results using alternative methods.
Uncertainty ranges	Presentation of ranges or confidence intervals where possible.
Version and vintage	Record the version of the valuation model and the vintage (reference year) of all input datasets (e.g., fish stock survey year, extent map edition, carbon price series), and document whether changes in monetary values between editions reflect methodological revisions, data updates, or both. This is particularly important for time-series comparisons used to infer trends in natural capital wealth.54

3.9.3 Presentation Guidance

1Do:

• 2Present monetary values alongside physical quantities and condition indicators
• 3Show time series to reveal trends
• 4Disaggregate by ecosystem type and service to reveal composition
• 5Explain what is and is not included in the estimates

6Do not:

• 7Present aggregate ‘total value of the ocean’ figures without extensive caveats
• 8Compare monetary values across studies using different methods without adjustment
• 9Use monetary values as sole basis for decisions about ecosystem protection
• 10Imply that monetary compensation can adequately substitute for ecosystem loss

4. Acknowledgements

1Authors: [To be confirmed]

2Reviewers: [To be confirmed]

5. References

Footnotes

1. 1

   SEEA EA 2021, para. 8.3. Exchange value based monetary accounts support multiple applications including comparing asset values, highlighting non-market services, assessing ecosystem contributions to production, comparing trade-offs, and deriving adjusted aggregates. ↩

2. 2

   SEEA EA 2021, para. 8.4. Monetary valuation will not be appropriate in all decision-making contexts and associated biophysical data should always be considered alongside monetary values. ↩

3. 3

   SEEA EA 2021, para. 1.15. Monetary values will not fully reflect ecosystem importance; assessing importance requires consideration of biophysical characteristics, ecosystem condition, and characteristics of dependent communities. ↩

4. 4

   UNSC Decision 52/101, March 2021. The Statistical Commission adopted chapters 1-7 as international statistical standard, recognized chapters 8-11 as internationally recognized statistical principles and recommendations, and noted chapters 12-14 as applications and extensions. ↩

5. 5

   SEEA EA 2021, para. 8.3. Exchange value based monetary accounts support multiple applications including comparing asset values, highlighting non-market services, assessing ecosystem contributions to production, comparing trade-offs, and deriving adjusted aggregates. ↩

6. 6

   SEEA EA 2021, paras 10.44-10.51. The NPV approach to ecosystem asset valuation uses the discounted present value of expected future ecosystem service flows. ↩

7. 7

   SEEA EA 2021, paras 10.76-10.81. The SEEA EA recommends market-based discount rates for services used by private economic units and social discount rates for services providing collective benefits, with sensitivity analysis and transparent documentation of the chosen rate. ↩

8. 8

   SEEA EA 2021, paras 10.76-10.81; NCAVES/MAIA 2022, Section 3.3; IPCC AR6 Working Group III, Chapter 3. For the 3% benchmark, see IPCC AR6 WG3 Chapter 3 (2022), which uses 3% as an illustrative social discount rate in scenario analyses; the commonly applied lower-bound range in climate economics literature spans approximately 1.4-3%. ↩

9. 9

   SEEA EA 2021, para. 8.3. Monetary accounts support scenario modelling, risk assessment, and policy instrument calibration. ↩

10. 10

    SEEA EA 2021, para. 8.5. Physical accounts may be sufficient for many policy questions; monetary valuation not always necessary. ↩

11. 11

    NCAVES/MAIA 2022, Section 6.3. Discusses fitness for purpose and data quality considerations. ↩

12. 12

    NCAVES/MAIA 2022, Section 6.5. Recommendations for communicating monetary values to avoid misinterpretation. ↩

13. 13

    NCAVES/MAIA 2022, Section 6.4. Discusses aggregation issues across services, regions, and time. ↩

14. 14

    SNA 2025, para. 4.131 (formerly SNA 2008, para. 3.118). Exchange values are defined as values at which goods, services, labour, or assets are exchanged or could be exchanged for cash. ↩

15. 15

    SNA 2025, para. 4.132 (formerly SNA 2008, para. 3.119). Market prices are amounts willing buyers pay to acquire something from willing sellers. ↩

16. 16

    SEEA EA 2021, para. 8.9. Exchange values differ from welfare values commonly used in environmental cost-benefit analysis, which include consumer surplus. ↩

17. 17

    NCAVES/MAIA 2022, Section 2.3.2. Consumer surplus is the difference between total willingness to pay and what is actually paid; accounts record the latter. ↩

18. 18

    SNA 2025, para. 4.130. The integrated framework measures current exchange value rather than attempting to determine utility of flows and stocks. ↩

19. 19

    NCAVES/MAIA 2022, Section 2.2. Ecosystem services are excluded from SNA production boundary; SEEA EA extends this boundary. ↩

20. 20

    NCAVES/MAIA 2022, Figure 1. Provisioning services contribute to SNA benefits; regulating and cultural services may contribute to SNA or non-SNA benefits. ↩

21. 21

    SEEA EA 2021, paras 5.25-5.28. Classification of ecosystem service beneficiaries by whether their benefits are within or outside the SNA production boundary. ↩

22. 22

    UNSC Decision 52/101, March 2021. Specifies different status for physical accounts (standard) versus valuation chapters (recognized recommendations). ↩

23. 23

    SNA 2025 was adopted by UNSC at its fifty-fifth session (2024), replacing SNA 2008. The SEEA EA 2021 is not amended by SNA 2025; its valuation recommendations remain operative pending future revision of SEEA EA. ↩

24. 24

    SEEA EA 2021, para. 9.27. Valuation methods should be applied in order of preference based on proximity to observed market prices. ↩

25. 25

    SEEA EA 2021, para. 9.29. Low values may reflect existing institutional arrangements; this is well understood in economics literature (open-access resources tend toward zero rent). ↩

26. 26

    SEEA EA 2021, para. 9.30. Care should be taken to understand market size and maturity; hypothetical values under alternative institutional contexts may be presented in complementary accounts. ↩

27. 27

    SNA 2025, para. 4.137 (formerly SNA 2008, para. 3.123). Similar markets approach adjusts for quality and other differences. ↩

28. 28

    NCAVES/MAIA 2022, Section 6.1. Value transfer requires consideration of institutional and ecological context differences between source and application sites. ↩

29. 29

    NCAVES/MAIA 2022, para. 3.3.2. The most widespread example of applying the similar markets approach in national accounts is the estimation of imputed rent for owner-occupied dwellings. ↩

30. 30

    SEEA CF 2012, Annex 5.1. Resource rent calculation deducts all factor payments from output value. ↩ ↩²

31. 31

    SEEA CF 2012, Annex 5.1; SEEA EA 2021, para. 9.31. In jurisdictions where government retains resource ownership, access fees represent a transfer of the resource rent to the state and must be deducted to prevent double-counting government revenue already recorded in national accounts. ↩

32. 32

    NCAVES/MAIA 2022, Section 3.2.2.1. The calculation is subject to variations in prices of outputs and inputs that can be considerable under market conditions, resulting in high annual volatility of estimates. For this reason, statistical offices tend to use 3-5 year moving averages. ↩

33. 33

    NCAVES/MAIA 2022, Section 3.2.3.3. Hedonic pricing estimates differential premium on property value from environmental attributes. ↩

34. 34

    NCAVES/MAIA 2022, para. 3.2.3.3. Applications of hedonic pricing have grown substantially in recent years with studies documenting property premiums for nature views, open spaces, beach access, and water quality. ↩

35. 35

    SEEA EA 2021, para. 9.38-9.39. Productivity change method estimates marginal productivity of ecosystem inputs to production. ↩

36. 36

    NCAVES/MAIA 2022, Section 3.2.3.2. The productivity change method estimates an exchange value that is consistent with the SNA by estimating a production function directly based on micro-level data. The econometric estimation provides a direct estimate of the marginal productivity of the input(s). ↩

37. 37

    SEEA EA 2021, para. 9.45-9.46. Averting behaviour method based on expenditures to mitigate adverse environmental impacts. ↩

38. 38

    NCAVES/MAIA 2022, Section 3.2.4.2. Consumer expenditure method uses travel expenditures directly as exchange values. ↩

39. 39

    SEEA EA 2021, para. 9.50. Replacement cost estimates cost of replacing service using process providing same benefits. ↩

40. 40

    NCAVES/MAIA 2022, para. 3.2.5.1. The validity of the replacement cost method depends on three conditions: the substitute can provide exactly the same function; the substitute is the least-cost alternative; and evidence indicates an actual demand for the substitute. ↩

41. 41

    SEEA EA 2021, para. 9.52-9.53. Avoided damage cost based on damages that would occur from service loss. ↩

42. 42

    NCAVES/MAIA 2022, para. 3.2.5.2. The validity of the avoided damage cost method depends on conditions including that the damages avoided can be related to a specific service, and that people would be willing to pay an amount to actually avoid the damage. ↩

43. 43

    SEEA EA 2021, para. 9.55. Simulated exchange value estimates price and quantity from hypothetical market. ↩

44. 44

    JNCC and Cefas. Initial marine natural capital account for the UK. At the time of the study, approximately 36% of UK marine habitats were classified as unmapped or unknown. ↩

45. 45

    JNCC and Cefas. The study applied replacement cost methods (waste mediation, coastal protection), abatement cost (carbon burial), and resource rent (fish and shellfish, offshore wind, marine aggregates) consistent with SEEA principles. ↩

46. 46

    NCAVES/MAIA 2022, Section 2.3.2. Consumer surplus cannot be transferred between transactors; accounts do not include it. ↩

47. 47

    SEEA EA 2021, Chapter 12 describes complementary accounts including bridge tables between exchange and welfare values. ↩ ↩²

48. 48

    NCAVES/MAIA 2022, Section 3.2.5.4; SEEA EA 2021, para. 9.55. Stated preference data must be adjusted to derive a simulated exchange value before any use in accounts; they may not be entered as direct account values. ↩ ↩²

49. 49

    SEEA EA 2021, Section 6.3.4. Non-use values are not within scope of ecosystem service values. ↩

50. 50

    SEEA EA 2021, Section 9.3.7 (para. 9.58) and Chapter 12 (Section 12.3.2). The restoration cost method is positioned for measuring ecosystem degradation rather than for total asset valuation. ↩

51. 51

    NCAVES/MAIA 2022, Section 3.2.4.2; tourism satellite account methodology for multi-purpose trips. Where visitor motivation data are unavailable, purpose-specific fees (transport, activity fees) provide a conservative lower-bound estimate that excludes accommodation costs. ↩

52. 52

    NCAVES/MAIA 2022, Section 6.5. Recommendations for clear communication of monetary values. ↩

53. 53

    SEEA EA 2021, para. 10.81. Compilers encouraged to undertake sensitivity assessments and publish documentation. ↩

54. 54

    SEEA EA 2021, paras 11.3-11.5. Time series consistency requires distinguishing methodological revisions from data vintage updates; version and vintage disclosure enables readers to interpret changes between account editions correctly. ↩