This article was originally published in The Global And Mail.
The Capitals Coalition are collaborating with several partners in Canada to set up a national platform on capitals thinking. This article highlights the growing interest in Canada to measure and value what matters.
“The unprecedented levels of government debt brought by the COVID-19 pandemic have Canadians questioning how this debt can be managed. The federal government’s Debt Management Strategy forecasts financial requirements of $469-billion for fiscal 2020-21 alone.
What is not reflected on the government’s balance sheet, however, is a significant source of wealth: the country’s natural infrastructure. The economic value of our abundant network of forests, wetlands and green spaces is not reflected in financial statements, even though it could be higher than our debt. Nature’s ability to capture carbon dioxide in the atmosphere – known as carbon sequestration – helps to slow down the rate of climate change. In coastal regions, dunes, reefs and coastal marshes reduce the impacts of storm surges, flooding and erosion. Elsewhere, wetlands, ponds and other green spaces protect communities from flooding, while providing a range of other valuable benefits – cleaner water, enhanced habitat and recreational space.
One argument for why natural assets aren’t currently recognized in government financial statements is that their value can’t be reliably measured. But new data-driven techniques are emerging to help make that happen. In 2016, the Insurance Bureau of Canada, the International Institute for Sustainable Development and the Intact Centre on Climate Adaptation established a framework to estimate the total economic value of natural assets. The group highlighted the value that wetlands offer in disaster-cost reduction for flood-prone communities. For instance, estimates show that wetlands in Southern Ontario would reduce damage costs to buildings in the Grand River watershed by more than $50-million if we were to experience another severe weather eventsuch as Hurricane Hazel in 1954…”