Natural resource accounting methods are applied in a case study of fuelwood consumption in Zimbabwe. The study estimates values of economic depreciation of timber stocks from fuelwood consumption from 1990 to 1996. Fuelwood is an appropriate variable to study because of the country’s high dependency on wood for energy, particularly in rural areas where most of the population lives.
There is substantial criticism of the linkage between the environment and national accounts in most countries including Zimbabwe. Traditional national income data such as Gross Domestic Product (GDP) do not fully capture the total economic value of natural resource stocks such as forests. First, the depreciation of natural capital upon which subsequent commercial uses are based is not measured. Second, only market-based uses such as logging, lumber and pulp production are included in GDP. Non-market consumptive uses such as domestic fuelwood cut by villagers, fruits and building materials are excluded.
Distinct natural resource accounting methodologies for valuing fuelwood depletion are reviewed and applied to commercial/domestic consumption. The main difference in the various approaches commonly used is in the valuation of physical stocks. Most studies use average net price as a measure of economic rent while a more refined approach suggested by Vincent and Hartwick (1997) uses marginal net price. Using average net price can increase bias in calculating net depreciation values of timber stocks. Using either method, the resulting depreciating values are then used to adjust the national accounts.
The results for Zimbabwe, based on specific methods, data and assumptions, imply no significant difference between normal GDP and an adjusted Net Domestic Product (NDP). A general conclusion based only on these data is that the economy could have actually consumed more per capita and still not jeopardised sustainable development. However, the results are aggregated at the national level and mask local sustainability issues with forest stocks. Many regions of Zimbabwe suffer from severe and unsustainable deforestation. The results also show that economic depreciation of timber stocks from fuelwood consumption alone represents about 0.16 percent of annual GDP. This figure is quite substantial and suggests that estimating other non-market forest values might be worth undertaking as part of a broader forest policy review. Finally, the study demonstrates some of the advantages, disadvantages and practical data limitations inherent in trying to adjust national accounts for resource depletion in a developing country context. Data limitations are especially problematic, even in Zimbabwe, which has a fairly well-developed system of national accounts and natural resource statistics. This case study demonstrates that natural resource accounting can be used even where data constraints exist. However, to fully capture the benefits of more refined methods such as using marginal net price for resource consumption, better quality data are required.
This study was sponsored by the FAO and the World Bank.
