Ownership of everythingThe planet is made up of land (rocks/soil), water, air, living beings and movements of energy.
|
For the purposes of accounting for it all, I'm going to define that everything (and everywhere), that is not cultivated by humans is "owned" by an entity others have described as "Gaia" (as per James Lovelock's "Gaia Theory"). These assets are described in SEEA EA (see later) as "ecosystem assets".
For the purposes of this Theory of Value, everything in, on and around planet Earth (including its atmosphere), or which is entering it or leaving it (eg heat from the Sun) is owned either by Gaia or by humans.
Everything that is cultivated by humans is "owned" by humans (or by the legal entities we create for administrative purposes). These items are inside the production boundary, to use another economics term. I'll say more about production boundaries later.
Whereas Gaia has a tendency to create or maintain a balance, or equilibrium, humans have a tendency (collectively) to upset that balance through our actions.
For the purposes of this Theory of Value, everything in, on and around planet Earth (including its atmosphere), or which is entering it or leaving it (eg heat from the Sun) is owned either by Gaia or by humans.
Everything that is cultivated by humans is "owned" by humans (or by the legal entities we create for administrative purposes). These items are inside the production boundary, to use another economics term. I'll say more about production boundaries later.
Whereas Gaia has a tendency to create or maintain a balance, or equilibrium, humans have a tendency (collectively) to upset that balance through our actions.
This doesn't mean that I believe in the Gaia Theory, or that humans don't have the ability to create balance. It's purely a theoretical device for making a distinction between what is owned by humans and what is not owned by us, in a way that enables an accounting theory to progress to beneficial results and outcomes. It also recognises the destabilising effect that humanity has had, collectively, on the planet and its living beings.
Assets
Natural Assets are productive things (either natural resources such as fossil fuel deposits and minerals deposits or ecosystems such as forests) that have permanence for longer than just a short timespan and are able to produce either natural products or ecosystem services to human and non-human beings. According to SNA2025, Natural Capital is understood to comprise the stocks of natural resources and ecosystem assets that provide some benefits to humans. Note from the discussion further below that some natural Capital is inside the production boundary for SNA and some is outside it. This makes accounting for Natural Capital complex and potentially confusing. The System of Environmental-Economic Accounting (SEEA) bridges this by expanding the asset boundary in physical terms (air, water) while aiming to align with the valuation methods of the SNA. More about that later.
The natural assets (whether Natural Capital or not) turn 'raw material' inputs such as water, nitrogen and carbon (from air and soils), and other nutrients into natural products (such as wood and fibre) and ecosystem services such as breathable air and drinkable water.
In these ways they are similar to productive machinery in human industries.
Largely, we do not treat these two types of assets the same way. Whereas we account for (and make consideration payments on exchange of) the inputs and outputs from human industrial machinery, we rarely account for the outputs from natural assets that are used by humans, let alone the inputs used by those natural assets. This is a major flaw in our approach, and one for which the emergence of the field of Natural Capital Accounting is only just starting to scratch the surface.
Supply and consumption
In the Earth economy, transfers of natural products and/or ecosystem services pass between nature and humans. Mostly, they pass from nature to humans, not the other way round. We continue a system that is essentially extractivist. And a lot of the transfers happen without any financial consideration being exchanged. Gaia is forced to make the transfers without payment (ie they happen for free).
When there was a relatively small number of humans in existence, hundreds of thousands of years ago, the cycle of life recycled the atoms making up our bodies, using the natural mechanisms and ecosystems that Gaia kept in balance, in timescales that nature could cope with. It closed the loop and returned those atoms to the natural environment and kept things in balance - in a type of dynamic equilibrium.
But then, humanity grew rapidly and we started having much more significant impacts on nature by the size of our populations and the amount of change we made in the environments around us. Our population (and our livestocks) embody a much larger stock of living material that is not available to nature until we (and our animals) die. That's a lot more material 'borrowed' from nature than used to be the case. Our built infrastructures have altered and reduced natural habitats beyond recognition. Furthermore, the pace of change has accelerated far beyond any rates that could be accommodated by nature, especially during the Industrial Revolution and the modern era. The biggest cycles important for a consideration of Gaia Theory operate on timescales of centuries to millennia. Our acceleration has swamped those effects.
Some people argue that humans are part of Gaia, and would ask how we can separate ourselves from Gaia, for the purposes of assessing ownership of things. However, the counterargument is that our numbers have grown so overwhelmingly, and we have impacted natural systems so significantly with our "otherness" towards them, and done that so rapidly, that we have placed ourselves outside Gaia's direct influences, to all intents and purposes. It's not just our own species that is affected. We've generated a new mass extinction event.
Because of these factors, today, Gaia is struggling to create or maintain balance. Gaia needs help. If we fail to help Gaia, we might breach one or more of several ecosystem and climate tipping points, that might generate major, permanent shifts to a more hostile global environment which might not be capable of supporting over 8 billion people. There is a strong element of self-interest to be tapped into. Even just slowing down the pace of physical change would help - to enable Gaia-timescale processes to re-assert themselves.
The Gaia Account
Taking a fresh look at some of the accounting tools we've created could be helpful.
For example, if we identify some financial transfers into what we might call a "Gaia Account", or "Gaia's Account", in consideration for some of the transfers of products or ecosystem services to humans, then those funds could be used, on Gaia's behalf, to finance actions towards correcting the imbalances and helping Gaia to move towards a new balance more quickly than would be the case without such actions.
The Production Boundary in SNA and going beyond that boundary in SEEA EA
From DeepSeek ------------
Based on the System of Environmental-Economic Accounting Central Framework (SEEA CF), the boundary between nature and humanity is defined by a clear line: the production boundary of the System of National Accounts (SNA).
Think of it like a factory gate:
- Inside the gate is the economic sphere (humanity), where production, consumption, and accumulation occur using labor and produced assets.
- Outside the gate is the environmental sphere (nature), which provides resources and absorbs waste
The SEEA CF treats the environment as a passive provider of inputs and a passive receiver of outputs . It records what is extracted, but it does not record the complex internal processes of an ecosystem (like photosynthesis, nutrient cycling, or natural regeneration) as "production" .
This is where the companion SEEA Ecosystem Accounting (SEEA EA) comes in. The SEEA EA extends the analysis by considering ecosystems as active "producers" of services (e.g., a forest purifying water or a wetland providing flood control), going beyond the strict production boundary of the SNA.
Based on the System of Environmental-Economic Accounting Ecosystem Accounting (SEEA EA), the treatment of natural assets goes significantly beyond the traditional SNA production boundary.
The key difference is a shift in perspective: while the SNA views nature as a collection of individual resources (timber, oil, etc.) that enter the economy, the SEEA EA views nature as integrated ecosystem assets that provide services to both the economy and society, regardless of whether those services are bought and sold in a market.
Here is how natural assets are treated inside and outside the SNA production boundary according to the SEEA EA:
💡 The SEEA EA's Broader Asset Lens:
The SEEA EA introduces a new asset classification: ecosystem assets. This is the most important shift. Instead of measuring just the timber (a resource), it measures the forest as an asset that also provides carbon sequestration, flood control, and recreation.
Because many of these services are public goods with no market price, the SEEA EA relies on valuation techniques (like replacement costs or stated preferences) to estimate their economic contribution. This allows the framework to record the depreciation of natural assets—referred to as depletion (for resources) and degradation (for ecosystem condition)—as costs that affect measures of sustainable economic welfare, which standard GDP overlooks.
DeepSeek ends ---------------------
I asked DeepSeek:
"What is the significance and impacts of the lack of financial compensation occurring for transfers of natural products and ecosystem services across the SNA production boundary?"
DeepSeek answer (with some emphasis added by me) ---------------
This is a penetrating question. You've moved from how the boundary is defined to the consequences of that definition.
The core issue is that the SNA production boundary only recognizes a transaction when a payment is made (or an ownership transfer occurs). When a natural product or ecosystem service crosses from nature into the economy without a financial payment—which is almost always the case—the SNA records it as a "gift of nature" with a value of zero in the core national accounts (like GDP).
Here is the significance and the cascading impacts of this lack of financial compensation.
The Core Significance: Nature is Invisible Capital
The lack of payment creates a fundamental asymmetry:
The SEEA frameworks exist to correct this by creating satellite accounts that impute values, but these do not change the core SNA numbers.
"What is the significance and impacts of the lack of financial compensation occurring for transfers of natural products and ecosystem services across the SNA production boundary?"
DeepSeek answer (with some emphasis added by me) ---------------
This is a penetrating question. You've moved from how the boundary is defined to the consequences of that definition.
The core issue is that the SNA production boundary only recognizes a transaction when a payment is made (or an ownership transfer occurs). When a natural product or ecosystem service crosses from nature into the economy without a financial payment—which is almost always the case—the SNA records it as a "gift of nature" with a value of zero in the core national accounts (like GDP).
Here is the significance and the cascading impacts of this lack of financial compensation.
The Core Significance: Nature is Invisible Capital
The lack of payment creates a fundamental asymmetry:
- Produced assets (machines, buildings) are expensive to buy and maintain, so they are used efficiently.
- Natural assets (clean air, wild fish, carbon absorption) are free to "harvest," so they are used until they collapse.
The SEEA frameworks exist to correct this by creating satellite accounts that impute values, but these do not change the core SNA numbers.
The Crucial Distinction: Natural Products vs. Ecosystem Services
Your question correctly separates these two. Their lack of financial compensation has slightly different impacts:
The SEEA's Response (But Not a Solution)
The SEEA CF and EA are satellite accounts. They exist alongside the SNA but do not replace it [I think "do not get included within it" would be a better expression]. They:
- Impute values for these free transfers (e.g., depletion of timber is calculated as the resource rent that should have been paid).
- Create physical accounts showing the volume of water abstracted or CO2 absorbed, regardless of payment.
The Bottom Line
The lack of financial compensation for transfers across the SNA boundary means that our primary measure of economic success (GDP) is systematically biased toward liquidating natural capital.
Every time a forest is cut, a fish is caught, or a river is polluted, GDP records a gain. The loss—the degradation of the asset—is invisible [to our core accounting systems and economic performance measurement (GDP)]. This creates a powerful institutional inertia against sustainability, even when the physical reality is clear.
DeepSeek answer ends --------------
Key Questions
1. Will the production boundary in SNA be expanded in future to include Natural Capital assets (eg some ecosystem assets) that are currently outside that production boundary?
2. Does my classification of asset ownership between Gaia and humanity help or hinder such future developments?
3. Could some Natural Capital assets be brought within the SNA production boundary, while still recording their ownership by Gaia, rather than require transferring their ownership to humanity as part of that change of approach?
4. Can the creation and use of a "Gaia Account" to pass financial payments through, based on satellite accounts, help to address some of the problems discussed above, irrespective of future changes to SNA and its production boundary?
