The practice of full-cost accounting is gaining momentum as a means to provide a long-term view on public policy, planning decisions, and corporate social responsibility. This broader look at accounting includes both direct and indirect costs, providing a means of quantifying environmental, societal, and economic costs and benefits. This “triple bottom line” approach requires a new methodology with more holistic thinking, and also new tools to provide transparency for this highly-charged shift in management practices.
The nature of indirect costs are often a sticking point for taking this new tact. However, the subjectivity of these measurements can be combated by recording metrics on-the-ground, tying them to locations that can then be visualized and analyzed with Geographic Information Systems (GIS), and providing a means for calculating and auditing impacts at different geographic scales.
Infrastructure Accounting
GIS has been applied to the inventory and valuation of infrastructure assets in the built environment since its inception for such assets and networks as roads, utility corridors, pipelines, etc. In the United States, the closer valuation of city assets became a mandatory function with GASB 34 in the late 1990s, which provided a new rigor to how local governments track and record the valuation of their built environments. The essential function and role of GIS here is to create and maintain an up-to-date inventory of all the assets.
An evolution of how the city is viewed is taking place now that treats the built environment as a sort of ecosystem where material and energy flows are studied in order to optimize efficiency. The urban ecology and industrial ecology approaches advocate full-cost accounting where the processes of resource use are tracked closely. The ultimate aim of this new approach is to move from linear individual systems into more closed loops where the waste from one process become inputs for other processes. In order to achieve the desired efficiency gains we must study the metabolism of our cities, closely monitor the inputs, and model and simulate the processes. GIS is ideally suited to move beyond inventory maintenance toward the next step of linking processes through the common denominator of geography.
Ecosystem Services
There are a broad scale of services that we get from our boreal and temporate forests, tundra and grasslands. The ecosystem goods and services fall into categories of provisions (food, fresh water, fuel), regulating capacity (climate, disease, floods), and cultural benefits (recreation, aesthetic, inspirational, educational). A healthy ecosystem also helps support other ecosystems through the treatment of waste and formation of life-sustaining soil. Our dependence on these ecosystems are increasingly apparent when the balance is lost due to overuse or the unsettling patterns of global change.
The growing awareness of our impacts on the earth, and our need to better manage our ecosystems in order to sustain our species, is leading to a number of efforts to quantify and account for the value of the natural world. From the assessment of biodiversity, to carbon accounting to take stock of deforestation, or the species contributions in face of devastating illnesses, the geospatial toolset is being applied to understand long-term ecosystem health and its role in enabling human habitation and economic activity.
Valuations and Risks
In light of these new ways of looking at impacts, industrial processes are increasingly under greater scrutiny in terms of their role in disrupting ecological balances. Corporations hold new liability to understand and diminish the impacts of their processes. This new approach requites a company to assess their ecological footprint and compare their demand on resources, along with their waste outputs, to the services they provide.
At present, there is largely self regulation with the approach of corporate social responsibility, but as the pressures on our planet increase, this longer-term monitoring and regulating of corporate impacts will likely become mandatory. GIS has a central role to play in modeling processes, analyzing their ecological impact, and refining them so that they become more efficient.
Core to all of these initiatives is the imperative that our data must be consistent, reliable, transparent, available, and flexible. Without a transparent means to access, analyze and display data, we invite the feelings that these outcomes can be manipulated to achieve the objectives of specific viewpoints, and while numbers can be buried, numbers associated with places can’t hide. The elements of sustainability must depoliticized in order to make progress for a more balanced way forward. Cost accounting provides a healthy and objective approach to weigh the pros and cons of different pathways to our future, and GIS and geospatial technology provide the means to visualize, rationalize, and make relevant to all geographies, the costs and benefits of our actions.
Resources
Full cost accounting definition, via Wikipedia
EcoBudget, the environmental management system developed by ICLEI with a focus on local government
Mapping Ecosystem Services: Practical Challenges and Opportunities in Linking GIS and Value Transfer, Austin Troy and Matthew A. Wilson, Ecological Economics, Vol. 60, Issue 2, Dec. 2006
