Implications of 1993 SNA Update on Natural Asset Classification

1. Classification of natural assets: implication of the update of the 1993 SNA and possible issues to address Alessandra Alfieri and Ivo Havinga London Group (New York, 19 - 21 June 2006)

2. Overview • Background • Definition of assets in 1993 SNA and SEEA • Changes in the 1993 SNA Rev.1 asset classification and impacts in the SEEA-2003 • Proposal for aligning the classification of natural resources in the 1993 SNA Rev.1 with SEEA-2003 • Terminology issues • Presentation issues

3. Background • 1993 SNA update considered the issue of classification of assets • AEG recommended that 1993 SNA and SEEA-2003 be aligned, in particular for classification of natural resources • Requested the editor and UNSD to do it

4. Main changes in the 1993 SNA Rev.1 asset classification • Replace “tangible non-produced assets” with “natural resources” • Replace “intangible non-produced asset” and split it in “contracts, leases and licenses” and “goodwill and marketing assets” • Record “Land improvements” as GFCF of buildings and structures and not under land • Align terminology of natural resources with SEEA-2003

5. Differences in terminology between 1993 SNA Rev.1 and SEEA-2003 • “Natural resources” • SNA – includes including land • SEEA – both cultivated assets and “tangible non-produced assets”, no land identified separately

6. Differences – Mineral and energy • Terminology • SNA: “Subsoil”, • SEEA: “Mineral and energy” • SNA: “Coal, oil, mineral gas” • SEEA: “Fossil fuels” • Definition of reserves • Suggest to expand asset boundary to probable and possible? • Expansion of asset boundary to non-renewable resources?

7. Non-cultivated biological resources • Terminology • SNA: Natural forests • SEEA: Timber • SNA: Wild stocks of fish and aquatic mammals • SEEA: Aquatic resources • Conceptual • Fish stocks outside the EEZ • High seas, if country has access rights

8. Water resources • SNA Rev.1: Expansion of asset boundary • Terminology • SNA: “Aquifers” , “Other” • SEEA: “Surface water”, “Ground water”

9. Other natural resources • Terminology • SNA: Radio spectra + other resources • SEEA: Atmospheric ecosystem • Ecosystems • Should the SNA mention that natural resources can be classified twice (according to whether they provide goods “natural resources” or services “ecosystems”)?

10. Differences in presentation • Order in presentation of natural resources • SNA: land, subsoil, non-cultivated biological resources, water, other • SEEA: Mineral and energy, soil, water, biological resources, LAND (separate from natural resources), Ecosystems

11. 1993 SNA Rev.1 SEEA-2003 Inventories Work in progress Work in progress on cultivated assets Plantations Non-cultivated Natural forests Biological resources Timber resources Cultivated Non-cultivated Differences in presentation (2) • Grouping of produced and non-produced assets • The SEEA-2003 does not make explicit the distinction between • fixed asset and inventory

12. Why differences in presentation? • Perspective • SNA groups the items according to how to value them • SEEA groups them according to the resource Should SNA and SEEA have the same presentation in the asset classification?

13. Questions to the LG? Do you agree with: • Would you like to see an Annex in the SNA explaining the difference between SNA and SEEA asset classification? • Dropping the item “recreational land” from both the SNA and SEEA? • Mentioning in the SNA the category ecosystems, although not in the classification?

14. Questions to the LG? (2) • Should the SEEA align its classification with the SNA? • In terms of order (land, mineral and energy, etc. or mineral and energy, land, etc.)? • In terms of grouping (by produced, non-produced, or by type of resource)?