Soil natural capital in europe; a framework for state and change assessment

Soils underpin our existence through food production and represent the largest terrestrial carbon store. Understanding soil state-and-change in response to climate and land use change is a major challenge. Our aim is to bridge the science-policy interface by developing a natural capital accounting structure for soil, for example, attempting a mass balance between soil erosion and production, which indicates that barren land, and woody crop areas are most vulnerable to potential soil loss. We test out our approach using earth observation, modelling and ground based sample data from the European Union’s Land Use/Cover Area frame statistical Survey (LUCAS) soil monitoring program. Using land cover change data for 2000–2012 we are able to identify land covers susceptible to change, and the soil resources most at risk. Tree covered soils are associated with the highest carbon stocks, and are on the increase, while areas of arable crops are declining, but artificial surfaces are increasing. The framework developed offers a substantial step forward, demonstrating the development of biophysical soil accounts that can be used in wider socio-economic and policy assessment; initiating the development of an integrated soil monitoring approach called for by the United Nations Intergovernmental Technical Panel on Soils.

Coastal water bodies and intertidal areas 42x, 52x Figure S1, SEEA land cover map for the EU-25 corresponding to the area covered by the first LUCAS survey. The legend corresponds to the habitats in Table S1. The map is derived from the Corine data 1 overlaid on the Esri world terrain base map (relief/ocean map) 2 using ArcGIS 10.2 environment.

Ecosystem services
The final piece of the accounting framing in relation to soil resources is to make the connection to the rapidly growing measurement discipline of ecosystem services. In the SEEA-EEA core model, there are three key measurement components. The first is the delineation of ecosystem assets and the measurement of that ecosystem's condition. This supports understanding of how the ecosystem asset is changing over time and provides a basis for the measurement of the accounting concept of degradation as a cost of capital due to human activity.
The second is measurement of flows of ecosystem services, commonly differentiated between provisioning, regulating and cultural services. These services are considered to flow to economic units, households and society generally. In some cases they are inputs to goods and services that are already recorded in standard economic accounts (e.g. crops, timber). In other cases they reflect additional consumption, for example in terms of flood mitigation provided by local forests. The analogy to standard accounting is that each ecosystem asset is effectively a new producing unit (like a factory) that supplies ecosystem services as outputs through the application of ecosystem processes. Its capacity to supply these services into the future will be directly related to the condition of the ecosystem.
The third component is accounting for the benefits obtained. In the SEEA-EEA, ecosystem services are defined as "contributions to benefits" thus making a distinction between flows of ecosystem services (e.g. air filtration) and the resulting outcomes (e.g. clean air). This can be quite significant in terms of valuation since different considerations will be relevant in assessing the value of clean air as distinct from the role of ecosystems in contributing to this outcome.
As noted above, the SEEA-EEA framework does not currently extend to considering soil as a distinct asset but, at least conceptually, the ecosystem accounting model just described could be easily adapted to reflect such a change. This change would see both an ecosystem asset (i.e. the above ground flora and fauna combination) and a soil asset being accounted for as distinct producing units. The soil asset would then be considered to supply 'soil services'.
The additional extension to the current SEEA-EEA model that is required is to incorporate flows of intermediate or supporting services. These would arise when a soil asset provides services to an ecosystem asset rather than direct to an economic unit or household. In the For accounting purposes the primary ambition is to estimate values that can be integrated with existing measures of economic activity, such as GDP and national wealth, and hence provide more complete measures that take in account or are adjusted for environmental stocks and flows, for example degradation adjusted measures of GDP. With this in mind, the valuation concept applied in the SEEA is "transaction prices", i.e. based on prices for environmental assets and services that would apply if the associated asset or service was exchanged between two units, where for example ecosystem assets can also be considered a unit.
An alternative valuation purpose is to assess the overall, societal value of environmental assets. Another valuation purpose is to compare potential differences between the welfare outcomes that arise under different policy choices (e.g. different tax regimes). Each of these different valuation purposes will require the use of different valuation concepts and different valuation techniques. In general, the information on physical stocks and flows recorded in an accounting setting can be used to underpin all valuation purposes and to this extent the SEEA provides a multi-purpose framework to support different valuation work.
There is a range of valuation techniques that can be used to estimate transaction prices. Of most relevance in relation to soil resources are production function methods, hedonic pricing, resource rents and replacement cost approaches. In all cases, these approaches use information on transactions in marketed goods and services to derive the price of an associated service. For example, the prices of soil services involved in the production of wheat could be estimated on the basis of wheat prices. Research is ongoing to determine appropriate valuation techniques for different soil services for use in an accounting context. Work to date, e.g. World Bank 4 , reveals that many methods currently used for other purposes are likely to be appropriate when the services supplied are inputs to existing economic activity or can be adapted to provide transaction prices.
Irrespective of the valuation concept applied, the largest challenge in valuation is estimating prices and values that taken into account local circumstance given that the interactions with the environment do not involve actual exchanges of money. While no money is exchanged, it is important to recall that, at least for accounting purposes, the intent is to record actual transactions that economic units and people have with the environment, i.e. the aim is to record past events. Recording these past events through an accounting framework is thus particularly important to underpin subsequent valuations.