Accounting for the Value of Indonesia's Nature: Webinar

The Changing
Wealth of Nations (CWON)
Stefanie Onder, Senior Economist, World Bank

sonder@worldbank.org
May
May31,
31,2023
2023
 Overview
Ringkasan
• Wealth as a complementary metric to GDP
Kekayaan sebagai metrik pelengkap PDB

• Wealth accounting done by the World Bank

Akuntansi kekayaan yang dilakukan oleh Bank Dunia
•Results of CWON 2021
Hasil CWON 2021
•Frontiers in Natural Capital Accounting
Garda terdepan dalam Neraca Sumber Daya Alam

• Concluding remarks
Kata penutup

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 The world is clearly moving “beyond GDP”
Dunia jelas bergerak "melampaui PDB"
• It is widely recognized that we do not measure
economic success properly
Diakui secara luas bahwa kita tidak mengukur keberhasilan
ekonomi dengan tepat
• UN Secretary-General calls GDP “a glaring blind
spot”
Sekretaris Jenderal PBB menyebut PDB "titik buta yang
mencolok“
• G7 heads recognize that GDP is “insufficient for
measuring success”
Pemimpin G7 menyadari bahwa PDB “tidak cukup untuk
mengukur kesuksesan”
• Leading academics call for systematic use of NCA
Akademisi terkemuka mendukung penggunaan NCA secara
sistematis
• The question is, where will we go?
Pertanyaannya, kemana tujuan kita?
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 What type of measure would be useful and used?
Pengukuran jenis apa yang berguna dan telah digunakan?
• Precise and concise / Tepat dan ringkas
• Actionable / Dapat ditindaklanjuti Vs.
• Theoretically and empirically robust /
Kuat secara teoretis dan empiris

Tax base / Dasar pengenaan pajak

Assessment of economic and Price stability / Kestabilan harga
social progress or welfare Jobs / Pekerjaan
Penilaian kemajuan ekonomi dan sosial Productivity / Produktivitas
atau kesejahteraan Credit worthiness / Kelayakan kredit

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 Bird’s eye view of the economy
‘Pandangan atas’ terhadap ekonomi
What people care about
Apa yang orang-orang pedulikan
Tax base
Leisure Security Homemade Goods Family Berbasis pajak
Kenyamanan Keamanan Barang Buatan Rumah Keluarga Price stability?
Kestabilan harga?
Consumption
Konsumsi
Jobs?
GDP Pekerjaan?
Productivity?
Produktivitas?
Making stuff (production)
Pembuatan barang (produksi)
Credit worthiness?
Kelayakan kredit?

Wealth-based
Stuff we made approaches
(produced capital) Labor Pendekatan
Barang yang kita buat
(modal produksi)
Tenaga Kerja berbasis
kekayaan

Climate, Environment, Nature People, Health & Education

(Human Capital) Progress
Source: Fenichel (Natural Capital)
Iklim, Lingkungan Hidup, Alam Masyarakat, Kesehatan, & Pendidikan Kemajuan
(2023) (Modal Sumber Daya Alam) (Modal Manusia)
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The World Bank has been measuring wealth since the 1990s
Bank Dunia telah mengukur kekayaan sejak tahun 1990-an

• Regularly produce a consistent global database comparable

across countries and over time
Secara teratur menghasilkan basis data global yang konsisten dan dapat
dibandingkan dengan berbagai negara dari waktu ke waktu
• Methodology is aligned with current and emerging SNA and
SEEA statistical standards and guidelines
Metodologi selaras dengan standar dan pedoman statistik SNA dan
SEEA saat ini dan yang sedang berkembang
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Key Findings of CWON 2021
Temuan Kunci CWON 2021

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Downward trends in per capita wealth put sustainable prosperity at risk for some
Tren penurunan kekayaan per kapita menempatkan risiko kemakmuran berkelanjutan bagi sebagian orang
Percent Change in Wealth Per Capita 1995 -2018
Persen Perubahan Kekayaan Per Kapita 1995 -2018

5/30/23
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But in Indonesia, per capita wealth has been increasing
Namun di Indonesia, kekayaan per kapita semakin meningkat

60.000

50.000
constant 2018 US$ per capita

40.000

30.000

20.000

10.000

0
1995 2000 2005 2010 2015 2018
-10.000

Produced capital Natural capital - renewable Natural capital - nonrenewable

Human capital Net foreign assets 9
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These trends are consistent with experiences of other MICs
Tren ini konsisten dengan pengalaman negara berpenghasilan menengah (MIC) lainnya

• Human capital is the largest share of global wealth Rest of

wealth
Modal manusia adalah bagian terbesar dari kekayaan global
36% Human
• Labor income growth and growing educational attainment is driving these trends Capital
Pertumbuhan pendapatan tenaga kerja dan peningkatan pencapaian pendidikan mendorong tren ini 64%

Annual Growth Rate of Human Capital per Capita, by Annual Growth Rate of Human Capital per
Income Group, 1995–2018 (%) Capita, by Region, 1995–2018 (%)
Tingkat Pertumbuhan Tahunan Modal Manusia Tingkat Pertumbuhan Tahunan Modal Manusia per
per Kapita, menurut Kelompok Pendapatan, 1995–2018 (%) Kapita, berdasarkan Wilayah, 1995–2018 (%)

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 Natural capital wealth has been increasing over time but unevenly
Kekayaan modal alam telah meningkat dari waktu ke waktu tetapi secara tidak merata

Natural Capital Per Capita - Indonesia Natural Capital in 2018 - Indonesia

7.000 4% 7%
4%
constant 2018 US$ per capita

6.000
2%
2%
5.000

4.000 25% 6%

3.000

2.000

1.000

0 3%
1995 2000 2005 2010 2015 2018

Forests, timber Forests, ecosystem services

Protected areas Mangroves
47%
Fisheries Cropland
Pastureland Fossil fuel energy 11
Minerals Official Use
The volatility in non-renewable natural capital is driven by a range of factors
Volatilitas modal alam tak terbarukan didorong oleh berbagai faktor

• Global commodity price boom

Lonjakan harga komoditas dunia
• Growing production and unit costs in MICs
Pertumbuhan biaya produksi dan biaya satuan di MIC
Fossil Fuel Wealth Decomposition, by Income
Decomposition of the Change in Fossil Fuel Wealth, 1995–2018 Group, 1995–2018
Dekomposisi Kekayaan Bahan Bakar Fosil, menurut
Dekomposisi Perubahan Kekayaan Bahan Bakar Fosil, 1995–2018 Kelompok Pendapatan, 1995–2018

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Natural capital assets can be measured using standard SNA/SEEA approaches
Aset modal alam dapat diukur menggunakan pendekatan standar SNA/SEEA

•Residual Value Method

Metode Nilai Residu

•Estimated NPV of resource rents

Estimasi NPV dari resource rent
•Until resource is exhausted (non-renewables)
Sampai sumber daya habis (tidak dapat diperbarui)
•For 100 years (renewables)
By Asset and Policy Scenario (% below baseline)
Selama 100 tahun (terbarukan)

•Used for designing sectoral policies (revenue sharing, taxes,

pricing) or macroeconomic policies (debt ratings)
Digunakan untuk merancang kebijakan sektoral (pembagian
keuntungan, pajak, penetapan harga) atau kebijakan ekonomi
makro (peringkat utang)
Cooperative Unilateral Unilateral High ambition
•Used for scenario analysis for low carbon energy transition climate climate action with cooperative
Digunakan untuk analisis skenario transisi energi rendah karbon action action by fuel border carbon climate action
importers adjustment Official Use
Ecosystem services require modeling and experimental valuation approaches
Jasa ekosistem memerlukan pendekatan pemodelan dan valuasi eksperimental

• Shoreline protection services of mangroves: avoided

damages
Layanan perlindungan garis pantai mangrove: menghindari
kerusakan

Annual Expected Benefit for Flood Protection

200.000

150.000

100.000

• Used for zoning, DRM and 50.000

insurance premia 0
1996 2010 2015 2020
Digunakan untuk zonasi, manajemen risiko bencana (DRM)
14
dan premi asuransi China Viet Nam Australia United States India IndonesiaUse
Official
Ecosystem services require modeling and experimental valuation approaches
Jasa ekosistem memerlukan pendekatan pemodelan dan penilaian eksperimental

• Non-wood forest ecosystem services: spatially explicit valuation using

meta-regression and ML models
Jasa ekosistem hutan bukan kayu: penilaian eksplisit spasial menggunakan model meta-regresi dan ML

• Used for designing PES, debt-for-nature swaps, green finance

Digunakan untuk merancang pembayaran jasa lingkungan (PES),
pengalihan utang untuk membiayai konservasi , keuangan hijau
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 Frontiers in NCA
Garda Terdepan dalam Neraca SDA

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 Innovations in the global database
Inovasi dalam database global

Comprehensive wealth
Measured in MER, PPP and as a volume-based index

Non-
Net
Produced renewable Human
Renewable natural capital foreign
capital natural Capital
assets
capital

Forests
Agricultural
Renewable Timber, wood Mangroves Labor force
Fossil fuels land
Machinery, energy fuel Shoreline Marine Male,
Oil, gas, coal Crop land, Fisheries
structures Solar, wind, Carbon retention, protection, female Assets-
pastureland
Minerals hydropower four non-wood carbon Industrial, employed/ liabilities
Urban land Carbon
12 minerals , ecosystem retention artisanal self-
geothermal retention services
services (by employed
services
protection status)
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 Example: Draft estimates of carbon stock
Contoh: Draf estimasi cadangan karbon
% change in carbon stock in mangroves, 1996-2020 % change in carbon stock in forests, 2001-2020
% perubahan cadangan karbon di mangrove, 1996-2020 % perubahan cadangan karbon di hutan, 2001-2020

Inclusion of carbon storage poses several conceptual challenges

Penyertaan penyimpanan karbon menimbulkan beberapa tantangan konseptual
• Valuation: Market vs. shadow price
Valuasi: Pasar vs. harga bayangan
• Attribution: Country vs. global benefits
Atribusi: Manfaat negara vs. global
• Aggregation: Double counting
Agregasi: Penghitungan ganda Official Use
Concluding remarks
Kata penutup
• A complementary metric to GDP is needed
Perlu ada metrik pelengkap untuk PDB
• GDP tells us whether growth is occurring
PDB memberi tahu kita apakah pertumbuhan sedang terjadi
• Wealth per capita tell us whether that growth is sustainable
Kekayaan per kapita memberi tahu kita apakah pertumbuhan itu berkelanjutan
• Measuring wealth per capita is challenging
Mengukur kekayaan per kapita merupakan sesuatu yang menantang
• Wealth can never be “comprehensive”
Kekayaan tidak pernah bisa "menyeluruh"
• Inclusion of natural capital is critical but can be challenging
Penyertaan modal alam sangat penting tapi implementasinya bisa menantang
• Low hanging fruit: natural capital traded in markets
Hal yang mudah dijangkau: modal alam yang diperdagangkan di pasar
• Challenge: non-market natural capital can be measured, but valuation is difficult
Tantangan: modal alam non-pasar dapat diukur, namun penilaiannya sulit
• Inclusion of human capital is equally critical and possible
Menyertakan modal manusia sama pentingnya dan mungkin dilaksanakan
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Thank you!
Terima kasih!
Access report and data at
Akses laporan dan data di
https://www.worldbank.org/en/publication/changing-wealth-
of-nations

Contact
Kontak
sonder@worldbank.org

Official Use