Environmental Accounting in Action

Environmental Accounting in Action

Case Studies from Southern Africa

Glenn-Marie Lange, Rashid Hassan, Kirk Hamilton and Moortaza Jiwanji

Environmental Accounting in Action studies the experiences of Namibia, Botswana and South Africa, the core countries of a unique, regional environmental accounting programme in Southern Africa. Covering minerals, forestry, fisheries and water, each chapter provides important lessons about sustainable resource management. As a whole, the case studies demonstrate how to overcome the many challenges of constructing environmental accounts and the mechanics of successful implementation. By providing a transparent system of information about the relationship between human activities and the environment, the accounts have improved policy dialogue among different stakeholders and have played a significant role in environmental policy design.

Chapter 6: Managing Natural Capital and National Wealth

Kirk Hamilton and Glenn-Marie Lange

Subjects: development studies, development economics, economics and finance, development economics, environmental economics, environment, environmental economics


Kirk Hamilton and Glenn-Marie Lange 6.1 INTRODUCTION The preceding chapters have presented a rich set of data on the natural resource endowment of the selected African countries. This final chapter aims to place this micro information into the macro context. We wish to examine the following broad questions: • What is the role of natural resources in development, and how can natural resource accounting assist in the analysis of this question? • What are the links between total wealth (including natural resources), welfare and sustainability? • What is the evidence on the evolution of national wealth in Botswana, Namibia and South Africa? • What are the policy challenges that resource-dependent economies face? 6.2 THE ROLE OF NATURAL RESOURCES IN DEVELOPMENT It is notable that the role of natural resource endowments in development is treated only lightly, if at all, in the traditional literature on development economics. Where they are discussed it is generally in the context of first, the agricultural sector, and second, the question of the declining terms of trade for natural resource exporting countries. The discussion of the agriculture sector in the development economics literature focuses on two issues: the low productivity of this sector, and the inevitable decline in relative importance of the sector owing to Engel’s Law. The productivity issue is key, since the process of development is dependent on the accumulation of surpluses for investment. Generally speaking, the low productivity in the agricultural sector is attributed to low levels of technology and low levels of inputs, and only occasionally...

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