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Forest Resource Accounts for Ethiopia

  • Sisay NuneEmail author
  • Menale Kassie
  • Eric Mungatana
Chapter
Part of the Eco-Efficiency in Industry and Science book series (ECOE, volume 28)

Abstract

Ethiopia is a natural resource dependent country that needs an assessment of its natural resources for the sustainable use of the country’s resources as well as to facilitate the formulation of effective and integrated environmental and economic policies. Gross domestic product (GDP) growth has for long been the key indicator for macroeconomic policy-making. However, national income accounts suffer from the major limitation that they focus mainly on goods and services that are bought and sold in markets and ignore nonmarketed services such as those provided by natural assets. As a result, there is inconsistent treatment of man-made capital and natural capital. Capital goods like machinery, tools and equipment are valued as productive capital and are written off against the value of production as they depreciate. However, no account is made for the depletion or degradation of natural resources: they are viewed as a ‘free gift of nature’. In addition, no account is made for growth in natural capital (e.g. through tree planting and natural regeneration). On the other hand, in the present system of national account (SNA), changes in man-made capital (i.e. investment) are recorded and form part of the GDP/GNP. The failure to capture properly the accumulation and depletion of ­natural resources in the SNA leads to generation of incorrect measures of economic performance and wellbeing such as the rate of savings and capital formation.

Keywords

Forest resource accounts Ethiopia Forest ecosystem services 

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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Environmental Economic Policy Forum for EthiopiaEthiopian Development Research Institute (EDRI)Addis AbabaEthiopia
  2. 2.Centre for Environmental Economics and Policy in AfricaUniversity of PretoriaPretoriaSouth Africa

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