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Report on Natural Resource accounting by November 2022
News: The Comptroller and Auditor General of India has stated that it would be coming up with report on Natural resource accounting (NRA) by November 2022.
What is NRA?
• It is the process of estimating the value of natural resource depletion and environmental degradation due to economic activities. In recent years, it became an important environmental assessment tool.
• It is based on the idea that ‘measurement of resource leads to its better management’.
What is the importance of NRA?
• It highlights the relation between economy and environment. It measures the non-renewable damage to the environmental resources and helps analyze development in real terms.
• It helps policymakers to understand the potential impact of their decisions.
• Asset and flow accounts have been recognized as a useful framework for monitoring, measuring and analyzing climate change.
• 4 out of 17 SDG’s can be directly related to management of natural resources and their accounting.
• Besides fulfilling the SDGs, it would help India become a part of the group of elite countries in generating Asset Accounts.
Challenges associated with NRA:
• Dearth of training and capacity building among state officers.
• Limitations in preparing the asset accounts - mapping the periodicity of data.
• Multiple agencies are involved in data collection for resources; it may give rise to the issues of data sharing/data conflict.
Initiatives taken at Global level to promote NRA
• UN General Assembly resolution titled, 'Transforming our world; the 2030 agenda for sustainable development', requires the preparation of Natural Resource Accounts. India is a signatory to this resolution.
• The UN, in 2012, adopted the System of Economic and Environmental Accounting (SEEA). It is the latest internationally accepted framework for NRA.
• India is one of the 5 countries taking part in the National Capital accounting and valuation of ecosystem services (NCAVES) Project. It is an umbrella term covering efforts to make use of an accounting framework to provide a systematic way to measure and report on stocks and flows of natural capital.