CHAPTER 6 LAND AND ECOSYSTEM ACCOUNTING



Introduction

This chapter introduces the land and ecosystem accounts of the SEEA and on reports on the experimental land accounts produced by the ABS.

The SEEA Central Framework describes accounts for land cover and land use in monetary and physical terms. That is the land has both an area, as measured in hectares, as well as a price, as measured in dollars per hectare. Land cover or land use accounts in monetary and physical terms have been produced for three regions of Australia, namely:

• the Great Barrier Reef region (Land Account: Great Barrier Reef Region, Experimental Estimates (ABS cat. no. 4609.0.55.001));
• the Murray-Darling Basin (Completing the Picture: Environmental Accounting in Practice, Chapter 6, Managing the Murray-Darling Basin (ABS cat. no. 4628.0.55.001)); and
• the state of Victoria (Land Account, Victoria, Experimental Estimates (ABS cat. no. 4609.0.55.002)).

The SEEA Central Framework also describes accounts for soil and timber resources both of which are associated with land accounts but as yet none of these accounts have been produced by the ABS.

The SEEA Experimental Ecosystem Accounts provides guidance on accounting for ecosystem condition. In this “ecosystem condition reflects the overall quality of an ecosystem asset, in terms of its characteristics(footnote 1) ”. Characteristics include the living (e.g. flora and fauna) and non-living (e.g. soil and water) components of ecosystems and their interactions as well as other things related to the location of ecosystems such as climate and topography. Condition can be measured in two ways. The first is by assessing the extent of ecosystem service flows, and the second by assessing the physical characteristics of the components of ecosystems.

An example of the measurement of condition using physical characteristics is soil condition which can be measured according to its type, depth, extent and levels of soil degradation (e.g. acidification, salinity and sodicity). Alternatively, the condition of biodiversity can be measured by the extent of ecosystems or the number, distribution and abundance of species occurring within ecosystems. Such data are typically resource intensive to collect.

Accounting for ecosystem condition is still in the early stages of development in Australia, but a range of activity is occurring. For example:

• Department of Sustainability, Environment, Water, Population and Communities (SEWPaC) ecosystem services key concepts and applications(footnote 2)
• The Department of Agriculture, Forestry and Fisheries discussion paper on ecosystem services(footnote 3)
• The Wentworth Group of Concerned Scientists is conducting trials in the Natural Resource Management areas of Australia using measurement of the physical characteristics of ecosystems (e.g. biodiversity, soil, carbon and water)(footnote 4)
• Ecosystem Services Framework of the South East Queensland Catchment Management Authority(footnote 5)
• Victorian Department of Sustainability and Environment have produced a set of experimental ecosystem accounts, including an estimate of condition using the metric “habitat hectares”.

The starting point for accounting for ecosystem conditions at the ABS is to determine the extent of different land cover types. These can be measured using remote sensing techniques and hence are amendable to large scale estimation and regular (i.e. annual) production. The Land Account, Victoria, Experimental Estimates (ABS cat. no. 4609.0.55.002) provides a series of tables showing land cover for the years 1750 and 2006, for each natural resource management region as there is a correlation between native vegetation extent and number of species (Brooks et al 2002(footnote 6) ). The area of native vegetation may be used to predict the number of species in a particular region and provides an indication of biodiversity that region. Figure 6.1 shows the percentage of native vegetation remaining in 2006 compared to 1750 for each of the NRM regions of Victoria.

Land Account, Victoria, Experimental Estimates (ABS cat. no. 4609.0.55.002) is the first iteration of the account, consequently no further timeseries data can be presented. It provides environmental, economic and social information about land in Victoria.

Two geographical classifications are used in the account. The full suite of account data is presented only by Natural Resource Management (NRM) region, and more focused profile data are presented by ABS defined Statistical Areas Level 1 (SA1). NRMs are defined as having a common natural resource element that binds them, commonly (but not always) river basins. SA1s are built from aggregations of Mesh Blocks which are designed by the ABS to capture small groups of population, or common land use (e.g. parkland). Victoria consists of 10 NRMs and over 13,000 SA1s and these are shown in figure 6.2.

Land cover classification

The Land Account uses an international standard classification of land cover, ISO-19144-2:2012, Land Cover Meta Language(footnote 7) . This has been adapted to suit Australian land cover by Geoscience Australia in conjunction with the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) to create the Dynamic Land Cover Dataset (DLCD) and a corresponding map of Australia spatially displaying the DLCD cover types. The DLCD reduces the number of categories in the classification to reflect only those ground cover types found in Australia.

For this publication, the full classification has been aggregated to seven categories of land cover Figure 6.3 shows the concordance between the complete DLCD and the AEEA categories.

Figure 6.3 Concordance between Australian Dynamic Land Cover and presented categories
Australian Dynamic Land Cover	AEEA presentation
Built Up Areas	Built Up Areas
Rainfed Cropping	Rainfed cropping and pasture
Rainfed Pasture
Alpine Grasses - Open	Grasses and Sedges
Hummock Grasses - Open
Sedges - Open
Tussock Grasses - Open
Hummock Grasses - Sparse
Tussock Grasses - Sparse
Trees - Closed	Trees
Trees - Open
Trees - Scattered
Trees - Sparse
Irrigated Cropping	Irrigated cropping and pasture
Irrigated Pasture
Shrubs - Closed	Shrubs
Shrubs - Open
Chenopod Shrubs - Open
Shrubs - Scattered
Shrubs - Sparse
Chenopod Shrubs - Sparse
Extraction Sites	Other
Inland Water bodies
Salt Lakes
Wetlands

Value of Land

The total rateable value of land (based on a land valuation file from the State of Victoria) in Victoria as at June 2012 is valued at $1,047 billion and covers approximately 23 million hectares. In the land account, land value can be presented according to:

• type of land cover;
• industry activity occurring on the land (by ANZSIC division);
• NRM region; and/or
• type of land use.

Figure 6.4 shows that Victoria’s land value is dominated by built up areas, with 50% of the state’s land value represented by this category. The next two significant are rainfed cropping and pasture (31.2%) and tree cover areas (16.8%).

Taking an industry viewpoint of land value in figure 6.5 (i.e. excluding households) shows that three industry divisions (or clusters of divisions in the case of all other industries) hold almost all of the land value in Victoria. Together, agriculture and all other industries hold nearly 89% of land value (43% and 45% respectively) while another 11% is held by manufacturing, leaving less than 1% of value to mining and electricity, gas, water and waste services.

The most significant contributor to all other industries is retail trade, with 17% of the total land value ($30b).

Figure 6.6 shows that the vast majority of Victoria’s land value is contained within the Port Phillip and Westernport NRM region. This NRM region includes Melbourne where the land is valued at $874 billion, or 83% of the value of all land in Victoria. Of this, $773 billion is attributable to land used for residential purposes, and another $45 billion and $33 billion for commercial and industrial purposes respectively. The land used for each of these purposes in Port Phillip and Westernport is individually valued higher than the entire land value of any other NRM region. Although it contributes less than 2% of total land value in the region, the land used for primary production in Port Phillip and Westernport, valued at over $17 billion, represents 23% of the state total for this land use, (i.e. agriculture, horticulture, forestry, etc.), more than for any other NRM.

Land in the Corangamite NRM is the second highest valued in the state at $61 billion. This NRM includes Geelong, Victoria’s second largest city and $46 billion (or 75% of its total value) is attributable to land used for residential purposes.

Land values contained within the experimental land account for Victoria are consistent with the value of land for Victoria contained with the national balance sheet of the ASNA (ABS cat. no. 5204.0).


Area of Land

Figure 6.7 Area of land by type of use, Victoria
		Hectares	% of total area
Australian Valuation Property Classification Code
	Primary Production Total	12766759	56.1
	Residential	1108107	4.9
	Commercial	30909	0.1
	Industrial	45967	0.2
	Extractive industries	21717	0.1
	Infrastructure and Utilities (Industrial)	92611	0.4
	Community services	4340	0.0
	Sport, heritage and culture	33671	0.1
	National Parks, conservation areas, forest reserves and natural water reserves	3638186	16.0
	Non-active assessments and header records	2527	0.0
	Transport easements	655862	2.9
	Unallocated	4370233	19.2

Victoria’s land is dominated by three use categories that make up over 91% of the state’s area. Primary production activities, including agriculture, aquaculture and horticulture use 56.1% of Victoria’s land, while national parks and other conservation areas cover 16.0%. 19.2% of Victoria’s land was not classified under the Australian Valuation Property Classification Codes (AVPCC).

The remaining use types share in just 9% of the state’s land use. Land used for residential purposes covers 4.9% of the state, while transport easements (roads and other transport corridors) cover 2.9% of the state. All remaining uses of land each account for less than one half of one per cent of Victoria’s land area.


Average value of land

By land cover group

As expected, built up areas contain easily the most valuable land per hectare in Victoria, with the average hectare valued at $3,560,000.

Figure 6.8 presents the remaining land cover types, and shows that land covered in shrubs reports the next highest value of the land cover groups at an average of $16,000 per hectare. Land covered by shrubs amounts to less than one half of one per cent of Victoria’s area.

When “shrubs” is broken into its components, land covered in scattered shrubs is the most valuable, averaging $88,000 per hectare. Forty-three per cent of scattered shrub land by area and 68% by value lie in the Westernport and Port Phillip NRM regions, its proximity to built up areas being the probable explanation for its high value. The shrubs group of covers also contains Victoria’s least valuable land cover type, closed shrubs, valued on average at only $280 per hectare.

By use
As shown in figure 6.9, land being used for commercial purposes is, on average, valued at over $1,709,000 per hectare in Victoria, more than double the value of land used for any other purpose. The average value for a hectare of industrial and residential land is similar, at $809,000 and $792,000 respectively. Community services and sport, heritage and culture are the next most valuable use types per hectare valued at $322,000 and $92,000 per hectare respectively.

Not shown in figure 6.9 is land used for primary production, which is valued at just under $6,000 per hectare, the lowest of all land use types. Within this group the average value of land across the state varies from $1,000 per hectare for land of native vegetation and agricultural cropping, up to $19,000 per hectare used for horticultural vegetable and fruit crops. Land used for primary production that has been improved (with, for example, sheds, cages, greenhouses, etc.) is the most valuable in this group, valued on average at $20,000 per hectare for livestock use and $21,000 for special purpose horticultural use.

1 Para 2.34, SEEA Experimental Ecosystem Accounting <back
2 http://www.environment.gov.au/biodiversity/publications/pubs/ecosystem–services.pdf <back
3 http://www.daff.gov.au/natural–resources/ecosystem–services/ecosystem–services–report <back
4 Accounting for Nature (2008) and Trials of Environmental Asset Condition (2001) http://www.wentworthgroup.org/ <back
5 http://www.ecosystemservicesseq.com.au/ <back
6 Brooks, T.M, Mittermeier, R.A., Mittermeier, C.G, da Fonseca, G.A.B., Rylans, A.B., Konstant, W.R., Flick, P., Pilgrim, J., Oldfield, S., Magin, G., Hilton–Taylor, C. (2002). Habitat loss and extinction in the hotspots of biodiversity. Conservation Biology 16(4): 909–923 <back
7 This classification is also slated to be used in future SEEA Ecosystems work <back