HALIFAX – A climate change think tank has released a guide encouraging municipalities to assign specific dollar values to natural assets ranging from wetlands to coastal dunes.
The University of Waterloo’s Intact Centre on Climate Adaptation published its “Getting nature into financial reporting” guide on Wednesday. Lead author Joanna Eyquem says putting values on natural assets gives municipal planners ammunition when they need to make a case for the assets’ preservation.
“Money talks. Nature does not have a voice in economic decisions when it is not laid out in dollars,” Eyquem said in an email this week. “Without integrating nature into financial reporting, Canada has already lost more than 70 per cent of wetlands — and up to 98 per cent (of wetlands) in densely populated areas,” she added.
The document, which drew on consultations with 120 experts in accounting and other fields, says that natural features such as forests and wetlands “that have not been purchased” by local governments currently aren’t on municipal balance sheets. That’s because the national body that sets accounting standards for the public sector has yet to issue common standards for their valuation, says the report.
Still, the climate centre found that about 150 Canadian communities are nonetheless identifying, valuing and managing natural assets to put them in separate ledgers off the balance sheet. The guide urges others to follow their example, providing a list of resources to help them.
The accounting systems being developed are based on the “services provided” by the lakes, rivers, wetlands, coastal marshes, soils, forests, fields and dunes that might otherwise be regarded as barren or unused properties, says the report.
The guide also lists draft accounting standards that municipalities can use to get started.
In an interview Tuesday, Mike Kennedy, the chief financial officer in Rossland, B.C., said his municipality is among those already calculating dollar values for a “natural asset inventory.”
He said his team has priced woodlands on slopes that surround a human-built reservoir for their value in reducing erosion and mitigating flooding, as well as recreational use. The total annual “services” value attached to forested areas in the municipality is currently set at $26 million, while wetlands are valued at about $2.8 million a year.
The work is challenging because values depend on the land’s specific location, he said. “A plot of land in two different spots in our town could provide to you very different valuations.” However, Kennedy said the figures are useful in municipal decision-making.
He gives the hypothetical example of a development that proposes to build on wetlands or on land near a waterway. If a dollar value is assigned to water purification “services” those areas provide, it can be measured against the cost of having to build or expand water filtration facilities to achieve the same benefit.
The guide describes a number of terms that Eyquem says she hopes may become part of accounting language.
“Ecosystem goods and services,” are products obtained from the ecosystem such as food and fresh water, while “regulation and maintenance services” include water purification and temperature regulation.
In addition, each step in doing the evaluations is laid out in the guide, along with where financial officers can find methods to evaluate the natural assets, evaluate their condition, pinpoint the services provided and convert that into a monetary figure.
Jillian Prosser, a climate adaptation specialist for the City of Calgary says she’s been working on natural asset valuations for the past six years.
She said the knowledge gained in the annual financial disclosures has led her team to develop plans to enhance and maintain the woodlands and waterways identified. Prosser said in an interview Tuesday the city is beginning to include them in wider “corporate asset management planning.”
She spoke while in Ralph Klein Park, which she described as a municipal asset that helps absorb and treat stormwater runoff from an industrial area in the city’s east end.
“We think that by including that value, we can better understand the services that they provide to us and recognize how important it is to invest in these areas,” she said.
This report by The Canadian Press was first published Jan. 29, 2025.
