Economic Commission for Europe
Conference of European Statisticians
Group of Experts on National Accounts
Twenty-second session
Geneva, 25-27 April 2023
Item 5 of the provisional agenda
Well-being and sustainability
Indonesian Net Domestic Product (NDP)
Adjusted for Depletion of Environmental Asset
Prepared by BPS - Statistics Indonesia1
Summary
Economic theory and accounting already utilize a tightly defined sustainability
criterion when evaluating the depreciation or consumption of generated capital. This is to
make a clear distinction between income and capital to prevent consuming capital base of
income generation. By expanding the asset boundary of national accounts to include non-
produced natural assets like land/soil, minerals, forests, fish, water, and environmental sinks
for pollutants (air, water, land), a broader concept of economic performance sustainability
can be defined as the maintenance of produced and natural capital used to produce goods and
services. Costing produced and natural capital consumption in the national accounts yields a
Depletion-adjusted Net Domestic Product (NDP1). The trend of NDP1 can be considered an
indicator of sustained economic growth. This is analogous to gauging economic growth
based on the trends of GDP or NDP.
SEEA (System of Environmental-Economic Accounting) is the first international
statistical framework that looks at both the economy and the environment. SEEA physical
and monetary environmental accounts give us a picture of the uses of natural inputs such as
forest, mineral and energy resources in the economy. Further development of monetary
environmental accounts is helpful to analyze the depletion impact on national accounts as
the result of extracting natural resources. Using the SEEA framework, BPS (Statistics
Indonesia) has compiled environmental-economic accounts in which NDP1 is generated. As
of 2022, environmental depletion included in BPS' work comprises the total value of
extraction of mineral and energy resources and the value of logging less planted timber. This
paper will present the rationale for environmental accounting, depletion-adjusted NDP, and
its sustainability along with its limitations.
1 Prepared by Ria Arinda.
United Nations ECE/CES/GE.20/2023/14
Economic and Social Council Distr.: General
6 April 2023
English only
ECE/CES/GE.20/2023/14
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I. Introduction
1. There have been two important indicators of national income over the past 50 years:
Gross Domestic Product (GDP) and Net Domestic Product (NDP); with GDP being the most
generally utilized. These variables are commonly used in macroeconomic analysis and
worldwide comparisons. In addition, they have historically acted as an indicator of a country's
economic development and standard of living. Unfortunately, these conventional measures
of economic activity are inadequate and deceptive because they fail to account for the role of
the environment and its influence on economic activity.
2. First, the NDP aggregate is a representation of the value of goods and services, which
is calculated by deducting an allowance known as the consumption of fixed capital. This
allowance accounts for the use up of man-made capital, such as machinery and equipment.
However, it is important to note that the national accounts do not include an allowance for
using environmental assets, which means that they do not provide a sustainable measure of
national production.
3. On the other hand, while GDP correctly represents the production of marketed goods
and services, it falls short of providing a more comprehensive measure of social welfare.
Regarding environmental problems, GDP does not account for environmental degradation
and resource depletion. This is a critical problem, particularly in developing countries like
Indonesia, which rely heavily on natural resources. If a country clears its forests, depletes its
soil fertility, and pollutes its water sources, it will undoubtedly become poorer. However,
national income accounts only reflect the market worth of timber, agricultural produce, and
industrial output as positive contributions to GDP. This may cause policymakers to view the
country's growth in an overly rosy light - at least until the effects of environmental damage
become evident, which may take decades in the case of environmental damage.
4. Can we conclude that a country with a higher per capita income is inevitably more
prosperous than a comparable nation with a lower per capita national income? Many experts
have pointed out that the national income indicators discussed above may provide a
misleading picture of economic and human development. Therefore, taking natural capital
and environmental quality seriously influences how we estimate national wealth and well-
being and the integrated economic and environmental information can come to answer these
questions.
5. Because the goal is to account for qualitative and quantitative changes in natural
capital, the starting point could be NDP, where the depreciation of real capital has been
subtracted from GDP in a similar manner. From this, a (partially) environmentally adjusted
net domestic product (EDP) would be the proper measure, taking into consideration natural
resource depletion and degradation. However, the compilation of environmentally adjusted
NDP in this paper only includes the calculation of depletion of environmental assets.
II. System of Environmental-Economic Accounting (SEEA)
6. SEEA is part of the statistical system and guidelines developed by the world's
statistical agencies (UNSC), UN, IMF, World Bank, OECD, and European Commission. It
is linked to the System of National Accounts (SNA), which provides a global standard for
national accounts. It provides a framework that integrates physical environmental data with
monetary data from the SNA to provide a more comprehensive and multipurpose view of the
interrelationships between the economy and the environment. It contains internationally
agreed concepts, definitions, classifications, accounting rules, and tables for producing
internationally comparable statistics and accounts, which are interoperable with the SNA.
7. Two complementary approaches of the SEEA include the SEEA Central Framework
(SEEA-CF) and the SEEA Ecosystem Accounts (SEEA-EA). SEEA-CF is a compartmental
and partial approach to measuring the environment and natural resources. In the SEEA-CF,
there are four types of accounts, namely flow accounts, asset accounts, sequence of economic
accounts, and functional accounts. Flow accounts include the measurement of energy,
materials, water, and emissions to the environment. Asset accounts include the measurement
of mineral and energy, timber, fish / aquatic resources, soil, water, land, and other biological
ECE/CES/GE.20/2023/14
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resources. The depletion-adjusted economic aggregates are highlighted in a sequence of
economic accounts, while the functional accounts contain information on transactions and
other economic activities carried out for environmental purposes.
8. On the other hand, SEEA-EA is a systematic framework to measure the contributions
of ecosystems to economic activity that is aligned with the National Accounts (UN, 2014a).
It includes ecosystem services flows and ecosystem assets. Ecosystem accounting involves
expanding SNA production boundaries. This allows the inclusion of a wider range of
ecosystem services, such as regulatory services and cultural services, as well as the natural
growth of biological assets (such as timber) to measure economic activity. In turn, this can
more comprehensively record changes in ecosystem capital (Bordt, 2015). Both SEEA-CF
and SEEA- EA can provide information in the physical and monetary unit if supporting data
is sufficient.
III. SEEA Implementation in Indonesia
9. Based on the Republic of Indonesia law on Statistics Number 16 of 1997, BPS is the
national statistical organization responsible for providing basic statistics, sectoral statistics,
and special statistics in Indonesia. In addition, in accordance with Government Regulation
No. 46/2017 concerning environmental economic instruments, BPS shall coordinate with the
Ministry of National Development Planning (BAPPENAS), the Ministry of Finance (MoF)
and relevant ministries that provide data to compile SEEA accounts. Furthermore, in the
latest development plan, BAPPENAS has included environmental sustainability, disaster risk
management, and climate change mitigation and adaptation as one of the targets in the 7
medium-term development plans (RPJMN) 2020 2024. Related to this, BPS contributes by
providing SEEA accounts.
10. BPS has begun to produce a yearly publication called SISNERLING (Integrated
System of Environmental-Economics Accounts of Indonesia) since 1990. Through the
SISNERLING, BPS aims to implement SEEA accounts, such as asset accounts, flow
accounts, and environmental activity accounts.
11. As one of the components of SEEA, asset accounts in physical or monetary units,
measure the stock of natural resources and the changes in stock. The compilation of asset
accounts in BPS comprises land accounts, timber asset accounts, and mineral and energy
asset accounts. The most interesting feature in asset accounts is its ability to estimate of
natural resources depletion in physical and monetary units. For non-renewable resources,
quantity of depletion is equal to the amount of resources extracted, but for resources that can
be renewed, the quantity of depletion take the population, resources, values, growth rate, and
improvement of the sustainability rates. The valuation methodology used in the monetary
asset accounts adopts Net Present Value (NPV) method which is recommended for valuing
the environmental assets.
12. BPS also publishes an annual report specifically dedicated to energy flow accounts,
which provides a detailed overview of energy supply and consumption by both economic and
environmental units, as well as the corresponding air emissions resulting from energy-related
activities. Furthermore, BPS conducts an in-depth study analysis each year to expand its
implementation of environmental economic accounting in other areas. The selection of these
areas is based on prioritized governmental programs or critical issues that arise during that
year. For instance, in 2016 and 2017, BPS conducted an in-depth study on EPEA-EGSS,
while in 2018, BPS studied SEEA-AFF. BPS then conducted an in-depth study on sustainable
tourism in 2019 and 2020, and ocean accounts in 2021 and 2022. This year, in 2023, BPS
will conduct an in-depth study on biodiversity accounts and climate change.
IV. Data source
13. Due to limitations in available data, not all natural resources can be evaluated in
monetary terms. As a result, the valuation of monetary asset accounts in BPS is based on a
prioritization of natural resources that have a significant impact on the Indonesian economy.
ECE/CES/GE.20/2023/14
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Specifically, BPS's monetary asset accounts focus on eleven key natural resources, including
land, timber, oil, natural gas, coal, gold, silver, copper, tin, nickel, and, bauxite.
14. To compile physical asset accounts for timber in Java, BPS generally rely on forestry
data from Perum Perhutani, specifically for teak timber and other types of timber in the
region. For physical asset accounts related to timber outside of Java, data from the MoEF's
publication on FRA is used. Additionally, to complete the Monetary Asset Account for
Timber Resources in Indonesia, we utilize data from BPS-Statistics Indonesia and the MoF.
15. To compile asset accounts for mineral and energy, BPS rely on data from several line
ministries in Indonesia, including BPS itself, Ministry of Energy and Mineral Resources
(MEMR), and Ministry of Finance. Data from BPS primarily comes from national accounts,
such as output and gross value added for each mining industry by type of mineral and energy.
BPS also use information from the Input-Output Table (IOT) and the Supply and Use Tables
(SUT) which provides detailed information about cost structure of each type of mineral and
energy mining industry.
16. The MEMR has the authority in collecting sectoral data related to mineral and energy
resources in Indonesia. We use data on reserves, resources, and production of mineral and
energy obtained from the MEMR. We also rely on their data to estimate the extraction of
mineral resources in both ore and metal content forms. The classification of reserves and
resources for each type of mineral and energy resource was adjusted to the UNFC-2009
classification as recommended by the SEEA.
17. Similar to the valuation of timber asset accounts, BPS determine the monetary value
of mineral and energy assets by setting a discount rate for each type. BPS use government
bond rates obtained from the MoF as discount rate.
18. Lastly, to compile integrated economic-environmental accounts, several sources of
data are utilized in the following manner:
a. The Directorate of Expenditure Accounts BPS provides GDP data by
expenditure at current prices, which includes macro-level information such as final
consumption, capital formation, exports, imports, and depreciation of economic
assets.
b. The Indonesian 2016 input-output table is another data source used to
determine the structure of product supply and intermediate consumption.
c. The monetary asset accounts for eleven key natural resources dicussed above
V. Methodology
A. Introduction
19. Natural resources that have been compiled in monetary asset accounts in BPS consists
of timber, as well as mineral and energy comprised of oil, natural gas, coal, gold, silver,
copper, tin, nickel, and bauxite.
B. Timber Asset Account
20. The timber resource asset account is constrained by data limitations hence covers only
teak timber of Java, other timber of Java, and other timber outside of Java. The rationale for
selecting these commodities is that they make the largest contribution to the value added to
the GDP of the Forestry Subcategory. The presentation of asset account for timber resources
is therefore presented by teak timber of Java, other timber of Java, and other timber outside
of Java.
21. The additions and reductions in stock cannot be presented as detailed as the SEEA
asset account standards. In the physical asset accounts (Table 1), additions to stock are
detailed according to natural growth and reclassification (reforestation and planting); while
reductions in stock are detailed according to removals as well as losses and reclassification
ECE/CES/GE.20/2023/14
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(natural losses and catastrophic losses). The structure of the monetary asset account for
timber resources (Table 2) is almost similar to that of the physical asset account for timber
resources. However, the former includes a new element called "revaluation," which serves as
a correction factor to account for price fluctuations over a given period. The physical asset
account is measured in cubic meters (m3), while the monetary asset account is measured in
rupiah.
Table 1
Structure of physical asset account for timber in Indonesia (m3)
Detail
Timber type Total of Timber
Resources
Teak Timber of
Java
Other Timber
of Java
Other Timber
Outside Java
(1) (2) (3) (4) (5)
Opening stock
Additions to stock
Natural growth
Reclassifications
Total additions to stock
Reduction in stock
Removals
Losses and reclassifications
Total reductions in stock
Closing stock
Table 2
Structure of monetary asset account for timber in Indonesia (Indonesian rupiah)
Detail
Timber type Total of Timber
Resources
Teak Timber of
Java
Other Timber
of Java
Other Timber
Outside Java
(1) (2) (3) (4) (5)
Opening stock
Additions to stock
Natural growth
Reclassifications
Total additions to stock
Reduction in stock
Removals
Losses and reclassifications
Total reductions in stock
Revaluations
Closing stock
22. To calculate the monetary asset account for timber resources, the physical asset
account is multiplied by the unit rent (resource rent per unit of resource), which is determined
using the Net Present Value (NPV) method. The NPV method involves estimating the value
of resources by using their current price as a proxy for their future sales value, and then
subtracting the costs of exploitation. Resource rent of timber commodities is obtained using
the value of Gross Operating Surplus (GOS), namely by multiplying output by the ratio of
GOS to output. GOS ratio is obtained from the 2016 IOT.
23. The formula used is 𝑃𝑃𝑃𝑃 = ∑ 𝐹𝐹𝐹𝐹𝑡𝑡
(1+𝑟𝑟)𝑡𝑡
𝑇𝑇
𝑡𝑡=1 = ∑ 𝑁𝑁𝑡𝑡𝑄𝑄𝑡𝑡
(1+𝑟𝑟)𝑡𝑡
𝑇𝑇
𝑡𝑡=1 . Where PV = The present value
of a natural resource, FVt = Future value of a natural resource, Nt = The value of natural
ECE/CES/GE.20/2023/14
6
resource deducted by exploitation cost at year t, Qt = Exploitation volume at year t, T= year,
t = age of natural resources, r = discount rate.
C. Mineral and Energy Asset Account
24. Asset accounts for mineral and energy resources present information on the stock and
changes of these resources over time, and are presented both in physical unit and monetary
unit. Due to data limitation, the additions and reductions in stock cannot be presented as
detailed as the SEEA asset account standards. Physical and monetary asset accounts for
mineral and energy are shown in the Table 3 and Table 4 respectively.
25. Mineral and energy resources include proven reserves of oil, natural gas, coal, metallic
minerals, and nonmetallic minerals, among others. The United Nations Framework
Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC-2009) is
the framework used to determine the extent of known deposits. The mineral and energy asset
accounts do not include potential mineral deposits because in these deposits, it is not expected
that these deposits will be economically viable in the future. Moreover, there is a scarcity of
data to assess mining feasibility or the level of confidence in geological knowledge.
26. Like timber resources, mineral and energy resources are categorized as environmental
assets that offer provisioning services by being extracted from nature and benefiting
humankind. As a result, their market value is determined by estimating their resource rent
via the net present value (NPV) approach.
Table 3
Structure of physical asset account for mineral and energy resources in Indonesia
Descriptions
Type of mineral and energy resources
Crude oil
(barrels)
Natural
gas
(BSCF)
Coal
(ton)
Gold
(ton)
Silver
(ton)
Copper
(ton) Tin (ton) Nickel
(ton)
Bauxite
(ton)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Opening stock
Extraction
Other changes
in stock
Closing stock
Table 4
Structure of monetary asset account for mineral and energy resources in Indonesia
(Indonesian rupiah)
Descriptions
Type of mineral and energy resources
Crude oil Natural
gas Coal Gold Silver Copper Tin Nickel Bauxite
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Opening stock
Extraction
Other changes
in stock
Revaluations
Closing stock
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D. Compilation of integrated accounts
27. Further development of monetary asset accounts is used measure environmental
depletion, which subsequently can be integrated to the system of national accounts. Due to
the limited data available, the calculation of environmentally adjusted national accounts is
only carried out up to the generation of NDP1, namely the NDP adjusted for natural resource
depletion.
28. In the integrated economic-environmental account (Table 5), the concept of capital
formation is expanded into the concept of capital accumulation which also considers capital
produced by environment. In this account, mineral, energy, and timber reserves are regarded
as natural-made capital. As such, it is essential to calculate the costs that reflect the utilization
or reduction of this natural-made capital in economic activities in the form of depletion value.
The depletion value for mineral resources is equivalent to the extraction value, whereas for
timber resources, the depletion value equals the logging and damage value substracted by the
value of planting or addition. The adjusted NDP (NDP1), which takes into account the use
of natural assets and the environment, is obtained by subtracting the value of depletion from
the conventional NDP in the SNA.
Table 5
Structure of integrated environmental and economic accounts for timber, mineral, and
energy commodities
Components
Year
Economic Activities Non-produced
Environmental
Assets Industries Final
Consumption
Capital Rest of The
World
Produced
Assets
Non-Produced
Assets
(1) (2) (4) (5) (6) (3) (7)
1 Opening stock
Capital
a. Timber
b. Oil
c. Natural gas
d. Coal
e. Gold
f. Silver
g. Copper
h. Tin
i. Nickel
j. Bauxite
2 Supply
3 Use
4 Depreciation
5 NDP (conventional)
6 Depletion
a. Timber
b. Oil
c. Natural gas
d. Coal
e. Gold
f. Silver
g. Copper
h. Tin
i. Nickel
j. Bauxite
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7 Other changes
a. Timber
b. Oil
c. Natural gas
d. Coal
e. Gold
f. Silver
g. Copper
h. Tin
i. Nickel
j. Bauxite
8 NDP1 1
9 Revaluations
Capital
a. Timber
b. Oil
c. Natural gas
d. Coal
e. Gold
f. Silver
g. Copper
h. Tin
i. Nickel
j. Bauxite
10 Closing Stock
Capital
a. Timber
b. Oil
c. Natural gas
d. Coal
e. Gold
f. Silver
g. Copper
h. Tin
i. Nickel
j. Bauxite
VI. Results (Indonesian depletion-adjusted NDP)
29. Table 6 shows the value of natural resource depletion that impacts the level of NDP
and net capital accumulation. Net capital accumulation is a constituent of NDP, valued at
Rp2,370,880 billion in 2021, representing 17.15 percent of total NDP. When accounting for
the impact of natural resource depletion, the value of net capital accumulation reduces to only
Rp2,043,845 billion or 15.14 percent of total NDP 1. The decline in net capital accumulation
value is attributed to the deppreciation of fixed capital assets and depletion of the value of
natural assets utilized in economic activities namely timber, minerals, and energy resources.
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Table 6
Comparation of conventional NDP and depletion-adjusted NDP (NDP1)
Year Component
NDP NDP1
Value
(Billion Rp)
Distribution
(%)
Value
(Billion Rp)
Distribution
(%)
2017
1. Final consumption 9 023 120 80.86 9 023 120 82.47
2. Net capital accumulation 1 999 990 17.92 1 781 980 16.29
3. Net export 135 778 1.22 135 778 1.24
4. Total 11 158 888 100.00 10 940 878 100.00
2018
1. Final consumption 9 793 746 81.35 9 793 746 83.05
2. Net capital accumulation 2 403 579 19.97 2 157 881 18.30
3. Net export -158 599 -1.32 -158 599 -1.34
4. Total 12 038 726 100.00 11 793 028 100.00
2019
1. Final consumption 10 566 547 83.43 10 566 547 85.62
2. Net capital accumulation 2 168 420 17.12 1 844 947 14.95
3. Net export -70 411 -0.56 -70 411 -0.57
4. Total 12 664 556 100.00 12 341 083 100.00
2020*
1. Final consumption 10 575 347 84.64 10 575 347 86.48
2. Net capital accumulation 1 676 913 13.42 1 410 754 11.54
3. Net export 241 952 1.94 241 952 1.98
4. Total 12 494 212 100.00 12 228 053 100.00
2021**
1. Final consumption 10 995 483 79.54 10 995 483 81.46
2. Net capital accumulation 2 370 880 17.15 2 043 845 15.14
3. Net export 458 017 3.31 458 017 3.39
4. Total 13 824 380 100.00 13 497 345 100.00
* Preliminary figures
** Very preliminary figures
30. Table 7 provides a more detailed breakdown of the depreciation of gross fixed capital
formation and depletion of natural resources. It is evident from the table that in 2021, the
ratio of NDP to GDP (point 4) was approximately 81.46 percent, which means that the
consumption of fixed capital as a percentage of Indonesia's GDP was around 18.54 percent.
On the other hand, the ratio of NDP1 to GDP (point 5) in 2021 was about 79.53 percent.
Moreover, the natural resource depletion percentage in Indonesia in 2021 was 1.93 percent
(or 20.47 minus 18.54).
Table 7
Comparation of GDP, NDP, and NDP1
2017 2018 2019 2020* 2021**
1. GDP (Billion Rp) 13 589 826 14 838 756 15.832.657 15.438.018 16.970.789
2. NDP (Billion Rp) 11 158 888 12 038 726 12.664.556 12.494.212 13.824.380
3. NDP1 (Billion Rp) 10 940 878 11 793 028 12.341.083 12.228.053 13.497.345
4. NDP/GDP x 100
(percentage)
82.11 81.13 79,99 80,93 81,46
5. NDP1/GDP x 100
(percentage)
80.51 79.47 77,95 79,21 79,53
6. NDP1/NDP x 100
(percentage)
98.05 97.96 97,45 97,87 97,63
* Preliminary figures
** Very preliminary figures
31. By compiling integrated economic-environmental accounts, the sustainability aspects
of natural resources can be analyzed. Table 8 presents a summary of the value of national
assets, categorized based on the value of fixed capital assets (produced assets) and the value
of natural assets (non-produced assets), obtained from the natural resources accounts
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calculation. Between 2017 and 2021, the contribution of natural assets to the total national
assets varied from 14 to 21 percent. However, the monetary value of natural assets is still
relatively small since the valuation does not encompass all natural resources.
Table 8
National asset value
Year Asset value at closing year
(Billion Rp)
Total
(Billion Rp)
Asset value at closing year
(percent)
Produced
assets
Non-
produced
assets
Produced
assets
Non-
produced
assets
2017 34 987 129 9 431 868 44 418 997 79 21
2018 39 778 340 9 557 955 49 336 295 81 19
2019 44 899 711 9 204 516 54 104 228 83 17
2020* 49 796 761 8 257 793 58 054 554 86 14
2021** 55 024 615 13 204 887 68 229 502 81 19
* Preliminary figures
** Very preliminary figures
32. The sustainable development agenda emphasizes sustainability as a measure, which
asserts that the value of total assets per capita or national wealth per capita should not
experience negative growth within a given period. The aspect of sustainability assumes that
there exists perfect substitution between different types of assets; when the value of one asset
decreases, it will be compensated by an increase in the value of other assets. For instance,
depletion of oil and gas resources can be compensated by investment in fixed capital such as
oil and gas exploration. The value of national wealth per capita and its growth are presented
in Table 9.
33. Table 9 presents data indicating that from 2017 to 2021, the value of national wealth
exhibited positive growth, as demonstrated by the increase in total national wealth per capita.
In 2019 and 2020, the per capita value of natural wealth experienced a contraction in growth.
However, the growth rate of fixed capital assets per capita increased at a faster pace,
offsetting the decline in natural wealth per capita. Moreover, in 2021, there was a significant
increase in national wealth per capita.
Table 9
National asset value per capita
Year The value of asset per capita (Billion Rp) Growth (%)
Produced
assets
Non-
produced
assets
Produced
assets
Non-
produced
assets
Produced assets
Non-
produced
assets
2017 133 594 36 014 169 609 12.89 22.24 14.75
2018 150 098 36 066 186 164 12.35 0.14 9.76
2019 168 219 34 485 202 704 12.07 -4.38 8.88
2020* 184 729 30 634 215 363 9.81 -11.17 6.24
2021** 201 790 48 426 250 216 9.24 58.08 16.18
* Preliminary figures
** Very preliminary figures
34. Table 10 shows the value of depreciation of national assets that indicates the usage of
both produced and environmental assets in economic activities. The growth in produced
assets, in the form of gross fixed capital formation, fluctuated between -7.08 to 19.42 percent.
On the other hand, the use of environmental assets had the lowest growth rate of -17.72
percent in 2020, and the highest growth rate of 31.66 percent in 2019.
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Table 10
Depreciation Value of National Assets in Indonesia
Year
Depreciation value (Billion Rp) Growth (%)
Consumption of
fixed capital
Depletion of
natural resources
Produced assets Non-produced assets
2017 2 430 937 218 010 19.42 12.62
2018 2 800 030 245 697 15.18 12.70
2019 3 168 101 323 473 13.15 31.66
2020* 2 943 805 266 159 -7.08 -17.72
2021** 3 146 409 327 035 6.88 22.87
* Preliminary figures
** Very preliminary figures
VII. Conclusion and Limitation Conclusion
35. Integrated environmental-economic accounting helps to combine economic and
environmental accounts and generate adjusted macroeconomic indicators (such as NDP) that
accounts for the depletion of natural resources. BPS has compiled integrated enviromental-
economic accounts of Indonesia since 1990. In this paper, NDP1 suggests that natural
resource depletion in Indonesia is relatively low. However, it is important to interpret this
result carefully because not all environmental assets, let alone the valuation of environmental
degradation such as pollution and climate change, are accounted for in NDP1.
36. Additionally, damage aspects that were not valued due to the unavailability of
appropriate valuation techniques, such as the biodiversity aspects of acidification, can also
be included. In future calculations of environmentally adjusted macro aggregates, it is
important to also include the transboundary aspects of environmental problems, such as the
exports and imports of pollution, which have not been taken into account in this paper.
37. The discount rate used in this paper's NPV calculation is based on government bond
rates from the Ministry of Finance, which are more market-oriented and not specifically
geared towards environmental sustainability. Therefore, there is a need to explore other
suitable discount rates for intergenerational discounting purposes from an environmental
sustainability perspective such as non-constant or declining discount rates, weighted average,
or shadow capital price approach.
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References
38. Arinda, R. (2021). Investigating the use of social discount rate in the Indonesia
Mineral and Gas Asset account [Unpublished mini thesis, Wageningen University and
Research]
39. BPS. (2022). Integrated System of Environmental-Economic Accounts of Indonesia.
- Group of Experts on National Accounts
- Twenty-second session
- Indonesian Net Domestic Product (NDP) Adjusted for Depletion of Environmental Asset
- Prepared by BPS - Statistics Indonesia0F
- I. Introduction
- II. System of Environmental-Economic Accounting (SEEA)
- III. SEEA Implementation in Indonesia
- IV. Data source
- V. Methodology
- A. Introduction
- B. Timber Asset Account
- C. Mineral and Energy Asset Account
- D. Compilation of integrated accounts
- VI. Results (Indonesian depletion-adjusted NDP)
- VII. Conclusion and Limitation Conclusion
- References
Forest products conversion factors provides ratios of raw material input to the output of wood-based forest products for 37 countries of the world. Analysts, policymakers, forest practitioners and forest-based manufacturers often have a need for this information for understanding the drivers of efficiency, feasibility and economics of the sector.