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1.Define NRA and list three uses of NRA.

DEFINITION:
Natural Resource Accounting is a process of analyzing the stocks of natural
resources and changes in them caused by either natural processes or human use.
The aim of natural resource accounting is to provide information on the state of
natural resources and the changes affecting them. It is therefore an important
link in the chain of sustainable development. NRA is also referred to as "green-
accounting" or "resource accounting" or "integrated economic and
environmental accounting (IEEA)”.
NRAs are of two types:
a) Physical asset account
b) Monetary asset account.
Such accounts typically cover
 Agricultural land
 Fisheries
 Forests
 Minerals and Petroleum
 Water.
USES OF NRA:
1. To quantify the values of ecosystem services.
2. To provide government decision-makers and others with information
which will help in designing a sustainable ecosystem model.
3. To measure the worth of ecosystem services to human health and well-
being.

2. Elaborate how NRA helps in measuring the wealth of country.

We measure our nation’s economic performance with indicators such as the


Gross Domestic Product (GDP), stock index and commodity markets, and many
others. The reliability, utility, and popularity of these indicators are rooted in
units that are easily measured, understandable to anyone. But, we lack such
indicators for environmental performance, and those we use are measured in a
units such as acres (e.g., extent of forests and wetlands) to µg/L (contaminant
concentrations in water), and scales which range from a single point in space to
continental and global. Everyone knows the worth of a dollar, but how does the

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value of one wetland or coral reef compare to another? It is even more
challenging to compare the values of forests, prairies, estuaries, and other
natural resources etc. For solving this problem NRA comes into picture. Natural
Resource Accounting is a process of analyzing the stocks of natural resources
and changes in them caused by either natural processes or human use.

NRA is an accounting for natural resources i.e. it will take into account the
harmful effects to the environment & natural resources and steps that can be
taken resume the sustainable model. NRAs are of two types:
a) Physical asset account
b) Monetary asset account.
Such accounts cover :
 Agricultural land
 Fisheries
 Forests
 Minerals and Petroleum
 Water.

3. State any five methods adopted in calculation of NRA.

Natural Resource Accounting is a process of analyzing the stocks of natural


resources and changes in them caused by either natural processes or human use.
Traditional methods of measuring economic activity are Gross Domestic Product
(GDP), Net domestic product (NDP). But these are inadequate when it comes to
measuring contribution of environment and impact on environment. Because of
costs of environment depletion and degradation are not included. Hence there is
need for Natural resource Accounting.

FIVE METHODS ADOPTED FOR CALCULATION OF NRA ARE:

1. By measuring indicators for sustainable socio-economic progress.


2. Composite indices-This method unites various data into a single number
Example the Human Development Index, or the Environmental
Sustainability Index
3. Adjusted GDPs: Also known as green GDP, corrects conventional GDP by
taking into account country's production of goods and services
(e.g. environmental degradation and natural resource depletion) that
would not otherwise be included in the indicator, but are relevant to
sustainability.
4. By measuring the consumption habits of a population such as ecological
footprints.
5. By measuring the monetory and physical indicators.

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4. State the importance of NRA and the areas it helps in effective
policy making.

Natural Resource Accounting is a process of analyzing the stocks of natural


resources and changes in them caused by either natural processes or human use.
The aim of natural resource accounting is to provide information on the state of
natural resources and the changes affecting them. It is therefore an important
link in the chain of sustainable development. NRA is also referred to as "green-
accounting" or "resource accounting" or "integrated economic and
environmental accounting (IEEA)”.
IMPORTANCE OF NRA:

1. The old accounting procedure makes no provision for depletion of natural


resources because they are seen as a free gift with little or no value. With the
emergence of the concept of sustainable development and natural resources
accounting, the natural resources have been assigned an important place.
2. The main role of NRA is to examine the role of natural resources in economic
growth and development.
3. Proper green accounting will reveal the problems and hence help to adopt
environmentally friendly approaches to production.
4. In some countries, environmental policies themselves may be the reason of
accounting problem. For example in some countries, taxation provisions in
discriminate against natural resources. In such cases Natural resource
accounting can help save the environment.
5. The Natural resource accounting helps safeguarding the environment of an
area and will prevent exploitation of natural resources. It therefore helps in
instilling the sense of social responsibility amongst government bodies,
private, public sectors and business enterprises.

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