Coastal Infrastructure Accounting

This Circular provides technical guidance for accounting for coastal infrastructure assets within the ocean accounting framework. It establishes methods for recording and valuing physical structures that protect, modify, or interact with coastal and marine environments, including both traditional engineered (“grey”) infrastructure and nature-based (“green” or “blue”) solutions. Grey infrastructure refers to conventional engineered structures such as seawalls, breakwaters, and port facilities. Green infrastructure refers to terrestrial nature-based solutions such as dune restoration and riparian planting. Blue infrastructure refers to marine and coastal nature-based solutions such as mangrove forests, coral reefs, and living shorelines. Some literature uses “blue-green” interchangeably. This Circular distinguishes the two where the distinction matters for accounting treatment.

Upon completing this guidance, practitioners will be able to:

• Classify coastal infrastructure assets by function and characteristics, applying the framework from TG-3.1 Asset Accounts
• Apply perpetual inventory methods and depreciation to produced coastal assets, following TG-3.1 Asset Accounts Section 3.3
• Account for nature-based solutions as ecosystem enhancement investments, linking to TG-2.9 Disaster Risk
• Integrate hybrid infrastructure systems combining engineered and natural components
• Link infrastructure accounting to climate adaptation investment tracking in TG-2.8 Climate Indicators
• Compile coastal infrastructure asset accounts from construction records, asset registers, and spatial data sources

The SNA classifies many coastal infrastructure assets as “other structures” (AN1122) under produced non-financial assets, including “the construction of sea walls, dykes, flood barriers etc. intended to improve the quality and quantity of land adjacent to them.” The accounting treatment must recognise the distinction between produced assets created through human activity and natural capital assets that provide similar services. A concrete seawall represents produced capital subject to depreciation, whilst a mangrove forest providing equivalent coastal protection constitutes an ecosystem asset valued through the net present value of expected ecosystem service flows. Hybrid infrastructure combining both elements requires careful attribution of values to each component.

1.1 Decision Use Cases

Coastal infrastructure accounts support three categories of policy decisions:

Coastal resilience investment allocation: Asset accounts provide the analytical framework for comparing engineered and nature-based protection options — engineered structures appear as gross fixed capital formation with annual depreciation, whilst nature-based solutions appear as environmental protection expenditure with ecosystem asset enhancement. The accounts enable annualised equivalent cost comparisons accounting for different service lives and maintenance requirements.

Climate adaptation planning and monitoring: Coastal infrastructure accounts quantify adaptation investment flows (seawall raising, drainage improvement, mangrove restoration) and track the resulting changes in asset stocks. Where adaptation retrofits extend the useful life of existing infrastructure, the accounts distinguish between consumption of fixed capital under original design assumptions and revised depreciation schedules. This feeds directly into TG-2.8 Climate Indicators, enabling countries to track SDG target 13.1 and report adaptation finance to UNFCCC processes. The 2025 SNA now treats climate change as “a major risk affecting current and future wellbeing.”

Infrastructure maintenance and budget prioritisation: Asset condition data from infrastructure accounts inform trade-offs between competing maintenance claims — breakwater repair, channel dredging, mangrove buffer rehabilitation. The accounts ensure transparent classification between intermediate consumption (routine maintenance) and gross fixed capital formation (life-extending rehabilitation).

TG-1.1 National Ocean Budgets: Asset accounts demonstrate the scale of public capital formation in coastal infrastructure, informing capital budget allocations and depletion-adjusted income measures.

TG-2.9 Disaster Risk: Infrastructure extent and condition compiled here feed directly into exposure and vulnerability assessments. The combined presentation of produced and ecosystem protective assets enables calculation of total protective capacity and identification of protection gaps.

This Circular requires familiarity with:

• TG-4.1 Remote Sensing and Geospatial Data — spatial delineation of coastal infrastructure footprint and shoreline change.
• TG-4.3 Administrative Data Sources — asset registers, consent records and public works accounts are the primary source for the asset valuation in Section 3.2.
• TG-0.1 General Introduction to Ocean Accounts — foundational concepts including spatial boundaries and integration with national accounts.
• TG-3.1 Asset Accounts — asset classification, balance sheet construction, and the produced/non-produced asset distinction.

Scope note on offshore structures: This Circular focuses on coastal infrastructure within the territorial sea and on land. For infrastructure associated with offshore energy operations beyond the territorial sea, see TG-6.9 Offshore Energy and TG-6.10 Maritime Transport. Where port approach channels or breakwaters extend into the exclusive economic zone, apply the same institutional unit (resident port authority) and asset classification (AN1122) used for the landward components, noting the geographic extent in spatial metadata.

Related circulars:

• TG-6.2 Mangrove and Coastal Wetland Accounting — mangrove extent, condition, and service accounting relevant to Section 3.3.2. Practitioners are strongly encouraged to consult TG-6.2 as a co-requisite.
• TG-2.4 Environmental (including Ecosystem) Goods and Services Section 3.10 — valuation methods; TG-3.1 Asset Accounts Section 3.3 — discount rate selection and the NPV approach used in Section 3.2.
• TG-2.9 Disaster Risk — coastal hazard exposure, vulnerability, and infrastructure protection capacity.
• TG-2.8 Climate Indicators — climate-related indicators for adaptation investment tracking in Section 3.5.
• TG-6.9 Offshore Energy — infrastructure associated with offshore energy operations beyond the territorial sea.
• TG-6.10 Maritime Transport and Ports — maritime transport infrastructure including offshore port elements.

Physical infrastructure data:

• Asset registers for ports, harbours, and marine terminals
• Coastal protection structure inventories (seawalls, breakwaters, groynes, revetments)
• Reclaimed land area and construction records
• Dredging and channel maintenance records

Ecosystem asset data:

• Mangrove extent and condition assessments (see TG-6.2 Mangrove and Coastal Wetland Accounting)
• Coral reef coverage and health indicators
• Seagrass meadow extent
• Salt marsh and coastal wetland boundaries

Remote sensing platforms provide essential data for consistent time-series monitoring of ecosystem extent. Landsat (30 m resolution, records from 1972) and Sentinel-2 (10 m resolution, from 2015) offer freely available multispectral imagery suitable for detecting changes in mangrove, seagrass, and salt marsh coverage. The Global Mangrove Watch initiative demonstrates how satellite-derived extent data can be integrated into accounting frameworks.

Financial data:

• Capital expenditure on coastal construction
• Maintenance and rehabilitation costs
• Insurance valuations and damage assessments
• Market transactions for coastal land and facilities

This guidance aligns with the SEEA Central Framework (AN1122 Other structures), Central Product Classification (CPC) for construction services, Classification of the Functions of Government (COFOG) for coastal protection expenditure, and IUCN Global Ecosystem Typology for coastal ecosystem types.

Readiness and sequencing. Whether a country is positioned to compile this account at all — mandate, data architecture, capacity and the order in which to build — is assessed under TG-0.8 Implementation Readiness Assessment, and is not restated here.

3.1 Coastal Infrastructure Types

3.1.1 Port and Harbour Infrastructure

Ports and harbours represent major produced assets within the coastal zone. The 2025 SNA classifies harbour facilities under “other structures” (AN1122), including:

“harbour bottoms and harbour channels, breakwaters, quays, piers, jetties, docks, wharves and similar structures”

Key infrastructure categories include:

Structural facilities: quay walls and wharves; piers and jetties; breakwaters and wave barriers; dry docks and slipways; cargo handling facilities.

Navigation infrastructure: dredged channels and basins; navigation aids (lighthouses, buoys, beacons); vessel traffic management systems.

Supporting facilities: storage and warehousing; road and rail connections; utilities and services.

Port infrastructure valuation should apply the perpetual inventory method (PIM) using acquisition costs, service lives, and appropriate depreciation profiles. The SEEA Central Framework notes that “consumption of fixed capital (commonly known as depreciation) should be deducted from income and recognized as a cost of production.”

To illustrate the PIM approach: a concrete quay wall constructed in 2010 at USD 50 million with a 60-year service life and 3.3 per cent geometric depreciation would, by 2025, have a net value of roughly USD 30 million in constant 2010 prices after approximately 40 per cent accumulated depreciation.

3.1.2 Coastal Protection Structures

Coastal protection infrastructure comprises engineered structures designed to defend shorelines from erosion, flooding, and storm damage.

Seawalls and Revetments

Seawalls are vertical or near-vertical structures providing a hard barrier between land and sea. Revetments are sloped structures armoring the shoreline using rock, concrete blocks, or similar materials. Both are classified as produced assets under AN1122, recorded at construction cost less accumulated depreciation. Typical service lives range from 25 to 75 years depending on materials, design, and environmental exposure. Major rehabilitation that extends useful life should be recorded as gross fixed capital formation.

Breakwaters and Groynes

Movable flood barriers and tidal gates manage water levels in estuaries and tidal zones. These assets combine structural elements with mechanical and electrical systems, requiring separate depreciation schedules for each component category. Notable systems include the Thames Barrier (operational since 1984), the Maeslantkering (part of the Netherlands Delta Works), and Venice’s MOSE barrier (completed 2020, 78 mobile gates). These examples illustrate capital values in the billions of dollars, design lives of 50—100 years, and ongoing maintenance that must be classified between intermediate consumption and capital formation.

Land reclamation creates new terrestrial area through the deposition of fill material and conversion of seabed or intertidal zones to dry land. The SEEA Central Framework recognises that land area may increase “owing to reclamation of land through the construction of dykes and other barriers.” Reclaimed land represents a produced asset distinct from the underlying natural seabed.

Accounting treatment records:

• Initial construction costs as gross fixed capital formation
• The resulting land area as an addition to produced assets
• Ongoing maintenance costs (pumping, drainage, structural repairs)
• Ecosystem service losses from converted marine or intertidal areas

SNA classification of reclamation works and reclaimed land: The engineered works (dykes, fill structures, drainage, containment walls) are recorded as gross fixed capital formation in AN1122. Once reclamation is complete and the land functions as a productive asset, the land area itself is reclassified to AN.211 (Land underlying buildings and structures) or AN.212 (Land under cultivation) as a non-produced asset, whilst the engineered works retain their AN1122 classification. The two components — engineered structures (produced) and land area (non-produced) — must be recorded separately to avoid double counting. Cross-reference SNA 2025 paragraph 11.85 and TG-3.1 Asset Accounts.

When coastal ecosystems are converted to reclaimed land, the framework captures both sides: the new produced land asset is recorded as gross fixed capital formation, whilst the ecosystem asset loss is recorded as ecosystem degradation and conversion in extent and condition accounts. The SEEA EA provides that “the value of losses in ecosystem services that result from ecosystem degradation should be recorded as an ecosystem degradation cost,” enabling a structured comparison between the produced asset gain and the ecosystem capital loss.

3.2.1 Capital Stock Measurement

Coastal infrastructure assets should be valued following SNA principles for produced non-financial assets using the perpetual inventory method (PIM). For PIM principles and price index selection, see TG-3.1 Asset Accounts.

The PIM requires:

1. Historical investment series — gross fixed capital formation in coastal infrastructure over the expected asset life
2. Price indices — construction cost indices to express investments in current prices
3. Service life assumptions — expected useful life by asset type
4. Depreciation functions — geometric, linear, or other profiles reflecting loss of productive capacity

The 2025 SNA specifies that “consumption of fixed capital in the SNA is calculated on the basis of the estimated opportunity costs of using the assets at the time they are used, as distinct from the prices at which the assets were acquired.”

3.2.2 Depreciation and Service Lives

Consumption of fixed capital for coastal infrastructure should reflect physical wearing out, normal obsolescence, and expected terminal costs.

Table 3.2.2: Indicative service lives and depreciation profiles for coastal infrastructure

The maintenance cost column assists compilers in distinguishing routine maintenance expenditure (intermediate consumption) from major rehabilitation (capital formation). Where annual maintenance expenditure exceeds the indicative percentages by a material margin, the excess may indicate capital improvements that should be classified as gross fixed capital formation.

Service life estimates should be adjusted based on local environmental conditions including wave climate, storm frequency, sediment dynamics, and water quality factors.

3.2.3 Asset Classification for Coastal Protection

Table 3.2.1: Coastal protection asset classification

Produced assets are valued at construction cost less accumulated depreciation. Ecosystem assets are valued through the net present value of expected ecosystem service flows. Hybrid assets require attribution between their produced and ecosystem components.

3.2.4 Maintenance and Rehabilitation

Routine maintenance that sustains current productive capacity should be recorded as intermediate consumption, not capital formation. Major rehabilitation extending asset life or materially improving capacity constitutes gross fixed capital formation.

Dredging presents particular accounting challenges. Maintenance dredging to restore design depths is typically treated as intermediate consumption. Capital dredging creating new or expanded facilities represents gross fixed capital formation. The SEEA Central Framework includes “dredgings” within the physical flow accounts for material resources.

Living shorelines use natural materials and ecosystem features to provide coastal protection while maintaining ecological function. Components may include planted vegetation (salt marsh grasses, mangroves, dune vegetation), oyster reef structures, submerged aquatic vegetation, natural or placed rock features, and biodegradable erosion control materials.

Accounting treatment depends on primary purpose and ownership:

Ecosystem restoration expenditure — where the primary objective is habitat restoration, costs should be recorded as environmental protection expenditure under CEPA classification and tracked through ecosystem extent and condition accounts.

Coastal protection investment — where the primary objective is shore protection with ecological co-benefits, engineered components may be capitalised as produced assets whilst ecosystem elements are tracked through ecosystem accounts.

3.3.2 Where the ecosystem protection service is recorded

Mangroves, salt marshes, coastal wetlands, seagrass meadows and coral reefs all provide coastal protection through wave attenuation, sediment stabilisation and storm surge reduction. Five circulars in this publication touch that service, so the recording point has to be stated rather than left to the compiler. Protection is a final ecosystem service distinct from fisheries habitat and recreation, so recording it once does not suppress the other services the same asset supplies.

What this Circular adds is the interface: where a protection service recorded in an ecosystem circular is the reason an engineered work was deferred, reduced in scope or avoided altogether, that avoided capital expenditure is recorded in the infrastructure investment account with a note identifying the ecosystem asset and the circular carrying its service value. The avoided expenditure and the ecosystem service value are two views of one benefit and must not be summed.

3.3.3 Condition variables that carry protection capacity

A compiler planning protection infrastructure should read these variables as a forward signal: an ecosystem asset on a declining condition trajectory will deliver less protection over the life of the works being appraised, which is a change in the counterfactual and not a change in the discount rate. Changes in condition affecting protection capacity are recorded as ecosystem degradation or enhancement in the ecosystem asset account, and restoration investment as environmental protection expenditure, in both cases under the ecosystem circular.

3.4.1 Hybrid Infrastructure Systems

Hybrid infrastructure combines engineered structures with natural ecosystem elements to achieve coastal protection objectives. Examples include breakwaters designed to support coral growth, seawalls with integrated mangrove planting, groyne fields with saltmarsh restoration, and artificial reefs for wave attenuation and habitat.

Accounting for hybrid systems requires clear attribution between:

1. Produced asset components (engineered structures) — valued at construction cost less depreciation
2. Ecosystem asset components (natural or restored ecosystems) — valued through NPV of expected ecosystem service flows
3. Land area changes resulting from infrastructure or restoration

Components that are clearly engineered should be recorded as produced assets, and components that are clearly natural should be recorded as ecosystem assets.

3.4.2 Ecosystem Enhancement Investment

Where infrastructure investments improve ecosystem condition, the SEEA EA provides for recording ecosystem enhancement:

“Ecosystem enhancement is the increase in the value of an ecosystem asset over an accounting period that is associated with an improvement in the condition of the asset during that accounting period.”

Enhancement activities in coastal zones include rehabilitation of degraded mangroves and wetlands, reef restoration and transplantation, seagrass meadow replanting, sediment management improving habitat quality, and water quality improvements benefiting coastal ecosystems.

Restoration, rehabilitation, and reclamation activities have different implications:

• Restoration aims to re-establish pre-existing structure and function including biotic integrity
• Rehabilitation aims to reinstate ecosystem functionality with a focus on supplying ecosystem services
• Reclamation aims to return degraded land to a useful state

The value of ecosystem enhancement should be measured through changes in the NPV of expected ecosystem service flows, not simply as expenditure incurred. There should be “no prior expectations regarding the results of such a comparison” between enhancement value and expenditure levels.

3.5.1 Sea Level Rise Resilience

Climate change affects the required performance and expected service life of coastal infrastructure. The SEEA EA recognises that “changes at the edges of the realms and associated transition areas, particularly between the marine and terrestrial realms, are likely to occur, for example, through coastal erosion, sediment deposition and aggradation and sea level rise.”

Infrastructure accounting should address:

Design standard adjustments — new infrastructure designed for higher sea levels or increased storm intensity should be fully capitalised as gross fixed capital formation.

Stranded asset recognition — infrastructure that becomes functionally obsolete due to sea level rise or permanent inundation may require accelerated depreciation or full write-off. Where sea level rise projections indicate specific infrastructure will be rendered obsolete before the end of its originally estimated service life, compilers should revise the depreciation schedule to write off the remaining value over the shortened horizon. Where infrastructure is abandoned due to managed retreat, the residual book value should be written off through the other changes in volume account.

3.5.2 Adaptation Investment Tracking

Coastal climate adaptation investment spans multiple asset categories:

Grey infrastructure: raised seawall heights; strengthened flood defences; upgraded drainage systems; relocated facilities.

Nature-based solutions (green and blue):

Terrestrial (green): dune restoration and stabilisation; coastal riparian planting; inland wetland creation contributing to coastal flood attenuation.

Marine and coastal (blue): mangrove restoration and expansion; coastal wetland creation; beach nourishment; seagrass and oyster reef establishment.

Hybrid solutions: integrated defence systems combining structural and natural elements; managed realignment creating new intertidal habitat; building with nature approaches.

The Framework for the Development of Environment Statistics (FDES) identifies relevant indicators including “sea level” and “flood/storm surge, sea level rise, coastal storm risk” for tracking climate-related changes affecting coastal infrastructure.

Investment tracking should link to:

Privately owned coastal infrastructure: Infrastructure owned by private enterprises and households (resort seawalls, private marina structures, industrial facility protection) should be included where material, consistent with SNA’s balance sheet coverage of all institutional sectors. In many tourism-dependent and SIDS contexts, privately owned coastal protection constitutes a substantial share of total coastal resilience infrastructure. Data sources include construction permit records, property insurance databases, sector surveys, and cadastral records. Where private infrastructure cannot be directly measured, estimation using construction permit volumes combined with sector-specific asset intensity ratios provides a practical approach, with all assumptions documented in metadata.

For each identified asset, record:

1. Physical characteristics: type, dimensions, materials, location
2. Ownership and institutional unit: government, port authority, private, or mixed
3. Construction date and original cost: for PIM application
4. Current condition: inspection reports, condition ratings
5. Functional status: operational, partially operational, decommissioned, or planned

Map each asset to AN1122 Other structures and relevant sub-categories consistent with the national chart of accounts.

Step 2: Assemble financial data

Collect historical and current financial data for each asset or asset category:

Historical investment series (for PIM):

Apply the PIM framework from Section 3.2.1, using the indicative service lives from Table 3.2.2, geometric depreciation for structural assets, and construction cost indices for price revaluation.

Key account identity:

• Closing stock = Opening stock + GFCF - Depreciation - Retirements ± Other volume changes

Record catastrophic losses from storms and reappraisals of service life in the other-changes-in-volume sub-account.

Step 4: Record ecosystem asset changes

Where hybrid or blue-grey infrastructure systems involve ecosystem components, compile parallel ecosystem extent and condition accounts:

Extent changes (from mangrove restoration, coral transplantation, living shoreline establishment):

• Opening extent (hectares) at start of accounting period
• Managed expansion: area established or restored through deliberate investment
• Natural expansion: area of natural colonisation or accretion
• Closing extent (hectares) at end of period

Condition changes:

• Select condition variables relevant to coastal protection function: mangrove canopy density, coral structural complexity, seagrass shoot density (see TG-3.1 Asset Accounts, Section 3.5.2 for guidance)
• Record opening and closing values for each variable
• Where monetary asset accounts exist, record ecosystem enhancement as the change in NPV of expected future ecosystem service flows

Expenditure attribution:

• Depreciation in capital account equals consumption of fixed capital in production account
• GFCF recorded in capital formation agrees with construction output in supply-use tables
• Ecosystem enhancement expenditure appears in environmental protection accounts (CEPA)

Step 6: Quality assurance and documentation

Internal consistency:

• Asset account identity: Closing stock = Opening stock + Additions - Reductions ± Revaluations
• Cross-check depreciation rates against observed asset lifetimes
• Compare maintenance expenditure percentages (Table 3.2.2) against actual port authority accounts

External benchmarking:

• Compare total infrastructure capital stock to international port statistics and infrastructure benchmarks
• Validate ecosystem asset values against comparable restoration cost or avoided damage studies
• Cross-reference climate adaptation investment totals with government climate finance reporting to UNFCCC

Documentation:

• Record all classification decisions, service life assumptions, and depreciation profiles
• Document data sources and estimation methods for each asset category
• Prepare metadata describing coverage, quality, and limitations

The accounting area is Coastal City, population 250,000, with a container port, 12 km of urban seawall, and a 150-hectare mangrove restoration project. The accounting period is calendar year 2025. Key infrastructure includes:

Step 2: Calculate accumulated depreciation by vintage

Geometric depreciation at 3% per annum. Accumulated depreciation = 1 - (1 - 0.03)^age:

Step 3: Record current-period changes

During 2025:

• GFCF: No new quay construction (USD 0)
• Depreciation: 3% of opening stock = USD 2.5 million
• Catastrophic losses: Cyclone damage requiring USD 1.2 million write-off (recorded as other changes in volume)
• Revaluation: 3% construction cost inflation = USD 2.5 million holding gain

Physical asset account for port quay walls (USD million, current prices)

Reconciliation between current-price and constant-price closing stock: The USD 82.7 million current-price closing stock includes the USD 2.5 million holding gain from construction cost inflation. Removing the revaluation effect yields 83.9 - 2.5 - 1.2 = USD 80.2 million, which is the figure presented in the constant-price integrated Table 3.7.2 below.

Interpretation: The net capital stock of quay walls declined by USD 1.2 million during 2025 on a current-price basis despite a holding gain of USD 2.5 million, because depreciation and cyclone damage exceeded the revaluation. In constant 2025 prices, the real decline was USD 3.7 million, the combined effect of capital consumption and storm damage.

Methodological note on condition index construction: The condition index used in this worked example is an unweighted arithmetic mean of three normalised condition ratios (canopy density, prop root height, sediment accretion). In national compilation, condition weighting schemes should reflect the relative contribution of each variable to the specific service being valued. Where coastal protection is the primary service, structural complexity variables (canopy density and prop root architecture) should be assigned higher weights than biogeochemical variables (sediment accretion). Compilers should document the weighting scheme and reference a published condition scoring framework. See TG-2.1 Aggregate Biophysical Indicators of Environmental State for condition variable selection guidance.

Monetary valuation

Ecosystem service valuation (annual flow):

• Coastal protection: Replacement cost of equivalent seawall = USD 8,000 per hectare per year
• Carbon sequestration: 10 tonnes CO2 per hectare per year × USD 50 per tonne = USD 500 per hectare per year
• Fisheries nursery: Productivity contribution = USD 400 per hectare per year
• Total annual service flow: USD 8,900 per hectare per year

Adjusted for current condition:

• Condition index = (68/85 + 52/70 + 9/10) / 3 = (0.80 + 0.74 + 0.90) / 3 = 0.81 (81% of reference condition)
• Adjusted service flow = USD 8,900 × 0.81 = USD 7,209 per hectare per year

Discount rate selection and sensitivity: A social discount rate of 4% per annum is applied, consistent with indicative rates used in multilateral development bank cost-benefit analyses. National compilers should select a rate consistent with national fiscal guidelines or central bank long-run real rates. See TG-1.9 Valuation for selection criteria.

Asset value (NPV at 4% discount rate, perpetual horizon):

• Asset value per hectare = Annual service flow / discount rate = USD 7,209 / 0.04 = USD 180,225 per hectare
• Total asset value (151 ha) = USD 27.2 million

Note on the perpetuity assumption: The perpetuity formula treats the adjusted annual service flow as continuing indefinitely. For recently restored ecosystems subject to sea level rise, cyclone mortality, and management uncertainty, a finite horizon may be more appropriate. For comparison, a 50-year finite-horizon NPV at 4% yields approximately USD 154,800/ha — materially below the USD 180,225/ha perpetuity figure. Compilers should select horizon assumptions appropriate to the maturity and risk profile of the restored ecosystem and present sensitivity ranges. See TG-1.9 for guidance.

Sensitivity table — per-hectare mangrove asset value at alternative discount rates (perpetual horizon, USD per hectare):

The sensitivity table illustrates that a 1-percentage-point change in the discount rate alters the asset value by approximately 25—50%. This magnitude makes explicit discount rate justification and sensitivity testing important to any compilation that reports mangrove asset values.

Monetary ecosystem asset account (USD million)

Interpretation: The mangrove asset value increased by USD 3.8 million during 2025, driven by both extent expansion (6 hectares net, contributing USD 1.1 million) and condition improvement (canopy density increased from 62% to 68%, contributing USD 2.7 million).

Integrated infrastructure and ecosystem account

Table 3.7.2: Coastal City total coastal protection asset value (USD million, constant 2025 prices)

1. Capital maintenance gap: Produced infrastructure depreciation (USD 4.3 million) exceeded new investment (USD 3.2 million), indicating net capital consumption. The cyclone damage compounded this gap.

2. Ecosystem asset performance: The mangrove restoration generated USD 3.8 million in asset value increase. At an establishment cost of USD 2.5 million over 2018—2022 (amortised to USD 500,000 per year), the ecosystem enhancement exceeds annual expenditure.

3. Portfolio diversification: The combined portfolio of grey and blue infrastructure maintained nearly constant total value despite the cyclone impact. The mangrove asset was unaffected by the storm that damaged the quay. Hybrid protection systems spread risk across asset types that do not share the same failure mode.

Infrastructure maintenance and adaptation budget request (2026)

The asset accounts provide the evidence base. Produced infrastructure is depreciating faster than it is being replaced, cyclone damage demonstrates exposure to climate hazards, and mangrove investment has delivered measurable returns.

Coastal infrastructure accounting integrates produced asset measurement with ecosystem accounting approaches to cover the full range of assets that protect and modify coastal zones.

Key principles:

1. Classification — distinguish produced assets (ports, seawalls, reclaimed land) from ecosystem assets (mangroves, coral reefs, wetlands) whilst recognising functional equivalence in service provision, as summarised in Table 3.2.1

2. Valuation — apply perpetual inventory methods to produced assets and net present value of ecosystem services to natural assets, following TG-1.9 Valuation

3. Integration — account for hybrid systems through clear attribution of produced and ecosystem components, avoiding double counting whilst capturing full asset values

4. Adaptation — track climate adaptation investments across grey, green, and hybrid infrastructure with linkages to TG-2.8 Climate Indicators

5. Cross-references — maintain consistency with related circulars, particularly TG-6.2 Mangrove and Coastal Wetland Accounting and TG-2.9 Disaster Risk