OA and National Budget Processes

1. Outcome

Readers will learn which accounts and indicators feed budget decisions, how to construct budget submissions using ocean accounting data, and how to present the economic case for public investment in marine resource management and ecosystem conservation.

The guidance addresses three critical budget use cases. Natural capital budgeting uses asset accounts to quantify the value of ocean assets and changes in that value, enabling governments to assess whether economic growth is achieved at the expense of depleting marine natural capital. Finance ministries can use depletion-adjusted net domestic product (NDP) calculations to show the natural capital cost of unsustainable fishing or offshore extraction, supporting budget allocations for resource management. Medium-term expenditure framework (MTEF) development requires multi-year projections of ocean economy contributions and asset trajectories. Asset accounts enable projection of fish stock biomass under alternative management scenarios, while ecosystem extent accounts track whether mangrove restoration investments will meet MTEF targets for coastal protection services. Budget line-item justification for fisheries enforcement, marine protected area management, or coastal infrastructure requires presenting sector economic contribution, asset status and trends, and expected returns to public expenditure. The quantitative evidence from ocean accounts strengthens these requests by grounding them in internationally standardised data.

2. Requirements

• TG-0.1 General Introduction to Ocean Accounts—provides foundational understanding of Ocean Accounts structure, including the distinction between stocks and flows, the relationship to the System of National Accounts (SNA) and System of Environmental-Economic Accounting (SEEA), and the multiple-capitals framework for wellbeing and sustainability
• TG-3.8 Government Activity Relevant to the Ocean—provides environmental activity accounts and CEPA/CReMA expenditure classifications used in Section 3.7 of this Circular to identify and track ocean-related government expenditure

3. Guidance Material

3.1 Ocean accounts and fiscal planning

National budget processes typically follow an annual cycle comprising budget formulation, legislative approval, execution, and audit. In many countries, annual budgets operate within a Medium-Term Expenditure Framework (MTEF) that projects revenues and expenditures over a three-to-five year horizon. Ocean Accounts can inform both the annual and medium-term dimensions of fiscal planning by providing consistent, comparable data on: the contribution of ocean-related sectors to national production and income; the stocks of natural capital assets in marine and coastal areas; the flows of ecosystem services from ocean environments; and the depletion or enhancement of marine resource assets over time.

The 2025 SNA gives increased prominence to net income measures and now treats depletion of natural resources as a cost of production alongside depreciation^[1]. This means that Net Domestic Product (NDP)--which subtracts both depreciation and depletion from GDP--is identified as the conceptually preferred measure of economic growth for sustainability purposes^[2]. For ocean-rich countries, this change has direct implications for fiscal planning: the extraction of marine resources such as fish stocks or seabed minerals now affects measured net income, providing budget planners with clearer signals about the sustainability of resource-dependent revenue streams.

Most countries currently compile national accounts under SNA 2008, which does not treat depletion as a cost of production. Depletion-adjusted ocean GVA measures prepared using this Circular should be presented as ocean accounts supplementary measures, clearly distinguished from official GDP and NDP. This framing is consistent with the SEEA Central Framework supplementary account approach and avoids pre-empting national statistical office SNA 2025 transition timelines.^[3]

3.2 From accounts to budget decisions: which data feed fiscal planning

Asset accounts feed natural capital budgeting

Asset accounts provide the quantitative foundation for assessing whether ocean economic growth is sustainable or whether it draws down marine natural capital. Three specific account entries are particularly relevant:

Physical fish stock accounts (TG-3.1 Section 3.4.1) record opening stock, natural growth, gross catch, natural mortality, and closing stock in tonnes of biomass. The derived measure of depletion--gross catch minus sustainable yield--signals whether extraction exceeds regeneration^[4]. A fisheries ministry budget submission can state: "Commercial fish stocks declined from 180,000 tonnes to 176,800 tonnes during 2025, with catch of 24,000 tonnes exceeding sustainable yield of 22,000 tonnes by 2,000 tonnes, indicating depletion. Stabilising stocks requires increased management expenditure of $X million annually." This statement draws directly from the physical asset account structure in TG-3.1 Table 1.

Monetary fish stock accounts (TG-3.1 Section 3.3) translate physical depletion into monetary terms by multiplying depletion in tonnes by the resource rent per tonne. If resource rent is $450 per tonne and depletion is 2,000 tonnes, the monetary value of depletion is $900,000. This figure should be deducted from gross ocean GVA to calculate net ocean GVA for inclusion in MTEF projections. The calculation procedure is specified in Section 3.4 below.

Ecosystem asset accounts (TG-3.1 Section 3.5) record the extent and condition of marine ecosystems that provide coastal protection, carbon sequestration, and other services relevant to budget decisions. If mangrove extent declined by 3.2 km2 during 2025 (TG-3.1 Table 5), and each hectare provides coastal protection services valued at $12,000 per year (TG-3.1 worked example), the annual loss of coastal protection capacity is $384,000. This figure can justify budget requests for mangrove restoration by quantifying the replacement value of protection services that have been lost.

Ocean economy accounts feed sector contribution evidence

Ocean economy thematic accounts compiled under TG-3.3 Economic Activity provide the data to show the ocean sector's contribution to national income, employment, and exports. The derivation procedure from supply and use tables (SUTs) to budget indicators is detailed in TG-2.5 Section 3.7; the resulting indicators populate Table 1 in Section 3.3 below.

Flow accounts feed environmental expenditure tracking

Environmental activity accounts described in TG-3.8 Combined Presentations enable tracking of government spending on ocean-related environmental activities. These accounts classify expenditure using the Classification of Environmental Protection Activities and Expenditure (CEPA) and the Classification of Resource Management Activities (CReMA)^[5]. For budget purposes, the accounts reveal:

Marine protected area management expenditure is classified under CEPA 6 (Protection of biodiversity and landscapes). A budget submission can state: "Government expenditure on marine protected area management totalled $8.2 million in 2025, protecting 72,000 hectares of marine ecosystems that provide $23 million annually in ecosystem services (coastal protection, carbon sequestration, fish nursery habitat)." The expenditure figure comes from functional accounts; the ecosystem service values come from ecosystem service flow accounts in TG-3.2.

Fisheries management expenditure is classified under CReMA resource management activities. A budget submission can compare management expenditure to the value at risk: "Fisheries management expenditure of $5.5 million protects an ocean fishing sector contributing $175 million GVA and employing 32,000 persons. Fish stock asset value is estimated at $73 million based on net present value of sustainable yield."

3.3 Quantifying ocean contributions to national income

An ocean economy thematic account disaggregates ocean-related economic activities that are often hidden within broader classifications in standard national accounts^[6]. For the thematic and extended accounts framework (SNA 2025 Chapter 38), see TG-0.2 Standards and Frameworks. The ocean economy thematic account is a thematic account in the SNA 2025 sense: it disaggregates and rearranges items within the SNA integrated framework rather than expanding its boundaries.

The account identifies industries and products that are "ocean-related"--either because they take place in marine areas, use marine resources as inputs, or produce goods and services specifically for ocean activities^[7]. The specific activities included will vary according to national circumstances. Countries with large exclusive economic zones may place greater emphasis on offshore extraction and deep-sea activities, while small island developing States may prioritise coastal tourism and artisanal fisheries. The SEEA Ecosystem Accounting framework provides guidance on defining ocean-related activities in Section 13.5, and the GOAP Technical Guidance encourages countries to document their classification choices transparently so that cross-country comparisons can account for differences in scope^[8]. The classification should be applied consistently over time so that trend data remain meaningful.

Key ocean-related activities typically include:

• Marine fishing and aquaculture
• Offshore mineral and energy extraction (including petroleum, natural gas, and emerging marine renewable energy)
• Maritime transport (shipping, port services)
• Shipbuilding and marine equipment manufacturing
• Coastal tourism and recreation
• Marine and coastal construction
• Ocean research and education

For each activity, the thematic account records output, intermediate consumption, gross value added, compensation of employees, and other standard economic variables. The sum of gross value added across all ocean-related activities provides a measure of the ocean economy's direct contribution to GDP.

Compilation procedure: from national SUTs to budget indicators

The following step-by-step procedure enables compilers to extract ocean economy data from national supply and use tables and derive the indicators required for budget presentations. This procedure is adapted from the SF-MST approach to measuring tourism economic contribution^[9] and is described in full in TG-2.5 Section 3.7.

Step 1: Identify ocean economy industries by ISIC code. Using the TG-3.3 Section 3.4 concordance (Industry Classifications), identify all ISIC classes that constitute the ocean economy in the compiling country. For each class, determine whether it is wholly ocean-dependent (ocean ratio = 1.0) or partially ocean-related (ocean ratio < 1.0). For example:

• ISIC 0311 (Marine fishing): ocean ratio = 1.0 (wholly ocean-dependent)
• ISIC 5510 (Short-term accommodation): ocean ratio = 0.40 (40% attributable to coastal tourism in illustrative case)

Step 2: Extract ocean economy sub-matrices from national SUTs. From the balanced national supply and use tables, extract the columns corresponding to identified ocean economy industries. This creates an ocean economy supply table and use table that are subsets of the national tables.

Step 3: Determine the ocean economy ratio for each industry. For partially ocean-related industries, estimate the share of output directly attributable to ocean-related activity. Methods for estimating this ratio should be applied in the following recommended order of preference:

1. Establishment-level survey data (TG-4.2 Survey Methods)—preferred where surveys covering ocean-related businesses are available
2. Statistical proxy (e.g. tourism satellite account coastal ratios)—acceptable alternative where establishment surveys are not feasible
3. Expert judgement informed by administrative records—admissible only where neither survey data nor statistical proxies are available; must be documented with the rationale, data sources consulted, and a sensitivity range

Whichever method is used, compilers should record the method and key assumptions in a metadata annex consistent with TG-4.2 survey documentation standards.^[10]

Step 4: Calculate Ocean Economy Direct GVA. For each ocean industry, multiply the industry's gross value added from the Use Table by its ocean economy ratio:

$$\text{Ocean Economy Direct GVA} = \sum_i (\text{GVA}_i \times \text{Ocean ratio}_i)$$

Step 5: Adjust for taxes less subsidies on products. To derive Ocean Economy Direct GDP from Ocean Economy Direct GVA, add the ocean-related share of taxes less subsidies on products:

$$\text{Ocean Economy Direct GDP} = \text{Ocean Economy Direct GVA} + \text{Ocean share of (taxes - subsidies on products)}$$

Two methods are acceptable for estimating the ocean share of taxes less subsidies on products:

• (a) Direct extraction: Where fisheries subsidy data are available from the national fisheries agency or international databases (e.g. OECD Fisheries Support Estimate (FSE) database, which disaggregates fuel tax rebates and direct payments by country; WTO Fisheries Subsidies Database for notified subsidies), apply these figures directly to the ocean sector.
• (b) Proportional allocation: Where direct data are unavailable, allocate total taxes less subsidies on products proportionally to the ocean economy's share of national GVA, following the procedure in TG-2.5 Section 3.7 Step 5. Note that proportional allocation underestimates subsidised sectors (e.g. fuel rebates for commercial fishing); this limitation should be disclosed when this method is used.^[11]

Step 6: Derive employment and export indicators. Using the same ocean economy ratios, multiply the labour inputs row by ocean ratios to obtain ocean employment, and sum the Exports column across ocean-characteristic product rows to obtain ocean exports.

Budget presentation table

Table 1 presents the standard format for presenting ocean economy contribution in national budget submissions. This format directly implements the four-row structure specified in Section 3.3 of this Circular and is populated using the indicators derived in Steps 4-6 above.

Table 1: Ocean economy contribution—budget presentation format

Note: Values are illustrative synthetic data for a medium-income coastal state. Compilers should replace these with data derived from national ocean accounts following the compilation procedure described above.

The fish protein supply row represents total marine fish supply available for human consumption. This figure is derived conceptually as: total marine fish catch, less exports of fish products and non-food uses (fishmeal, industrial use), multiplied by a species-mix-weighted protein conversion factor. Compilers should refer to FAO food balance sheet methodology for the operational procedure and FAO food composition tables for protein conversion factors.^[12] Where fish constitutes a major share of national protein consumption, this indicator shows the ocean sector's contribution to food security and can justify budget allocations for fisheries management that maintain this contribution.

3.4 Net ocean GVA: accounting for natural capital depletion

Gross measures of ocean economy value added do not account for the depletion of the marine natural resources on which many ocean industries depend. The SNA 2025 treats depletion of non-produced natural resources as a cost of production (SNA 2025 Chapter 15, para 15.137), making net domestic product (NDP) the conceptually preferred measure of economic growth^[13]. For the ocean economy, this has particular significance because fisheries, offshore minerals, and other extractive ocean industries draw down natural capital stocks.

Net ocean GVA is defined as:

$$\text{Net ocean GVA} = \text{Gross ocean GVA} - \text{Depletion of marine natural resources}$$

Depletion of marine natural resources includes:

• Depletion of fish stocks—the decline in the economic value of fish stock assets due to harvesting in excess of natural regeneration
• Depletion of seabed minerals—the decline in the economic value of offshore mineral and hydrocarbon reserves due to extraction

This Circular covers only fish stock and seabed mineral depletion. Coastal and benthic habitat degradation (e.g. trawl damage, coral bleaching) represents a distinct category of natural capital cost—the decline in ecosystem asset value due to condition loss—that is excluded from the net ocean GVA calculation here. Countries should consult TG-3.1 Asset Accounts Section 3.5 for ecosystem condition and degradation accounting. Countries unable to integrate ecosystem degradation should disclose the omission explicitly in their budget submissions, noting the potential for systematic understatement of natural capital costs in reef-dependent or trawl-intensive economies.^[14]

Calculation procedure for fish stock depletion

The following procedure enables compilers to calculate monetary depletion from physical fish stock asset accounts:

Step 1: Obtain physical depletion from asset accounts. From the physical fish stock asset account (TG-3.1 Section 3.4.1), extract:

• Gross catch (tonnes)
• Sustainable yield (tonnes)
• Physical depletion = Gross catch - Sustainable yield (tonnes)

If gross catch is 24,000 tonnes and sustainable yield is 22,000 tonnes, physical depletion is 2,000 tonnes.

Compilers should use Maximum Sustainable Yield (MSY) as the default reference point for sustainable yield, sourced from stock assessment outputs in TG-6.7 Fisheries Stock Assessment. Alternative reference points—including Maximum Economic Yield (MEY), precautionary reference points (B_pa/F_pa), or nationally legislated target reference points—may be substituted where national policy or legislation defines a different indicator, provided the choice is explicitly documented. Consistent application of the reference point across periods is essential for depletion trend comparability.^[15]

Step 2: Estimate resource rent per tonne. Resource rent is the surplus remaining after deducting all costs of fishing from the gross value of catch^[16]. It is estimated as:

$$\text{Resource rent per tonne} = \frac{\text{Gross value of landings} - \text{(Operating costs + Depreciation + Normal return to capital)}}{\text{Total catch (tonnes)}}$$

Normal return to capital is estimated as the risk-free rate applied to the replacement value of the fishing fleet (SEEA CF para 5.114).

If gross value of landings is $28.8 million (24,000 tonnes at $1,200 per tonne average price), and total fishing costs are $18 million (including labour, fuel, vessel depreciation, normal return to capital), resource rent is $10.8 million. Resource rent per tonne is $10.8 million / 24,000 tonnes = $450 per tonne.

Step 3: Calculate monetary depletion. Multiply physical depletion by resource rent per tonne:

$$\text{Monetary depletion} = \text{Physical depletion (tonnes)} \times \text{Resource rent per tonne}$$

Monetary depletion = 2,000 tonnes x $450/tonne = $900,000

Step 4: Calculate net ocean GVA. Subtract total depletion (fish plus minerals if applicable) from gross ocean GVA:

If gross ocean GVA is $1,750 million and total depletion (fish $0.9 million + offshore minerals $60 million) is $60.9 million, net ocean GVA is $1,689.1 million--a reduction of 3.5% from the gross figure.

Budget application of net measures

The difference between gross and net ocean GVA reveals the extent to which the ocean economy's recorded economic contribution depends on the drawdown of natural capital. Finance ministries can use this information to assess:

• Whether ocean sector growth rates are sustainable or are achieved by depleting assets
• The fiscal sustainability of revenue streams dependent on resource extraction
• The magnitude of management investment required to stabilise stocks and protect future income flows

For MTEF purposes, projected net ocean GVA under alternative policy scenarios provides a more realistic basis for revenue forecasting than gross measures alone. If current depletion rates continue, the $60.9 million annual natural capital cost will grow, eventually eroding the sector's net contribution. Budget submissions can state: "Stabilising fish stocks to eliminate depletion would protect $900,000 annually in natural capital value, requiring estimated management expenditure of $2.5 million annually. The $900,000 in avoided annual depletion represents a direct return of 36 cents per dollar of management expenditure from natural capital preservation alone. When the broader economic benefits of maintaining the $175 million GVA fishing sector and 32,000 jobs are considered, the case for investment is substantially stronger."

3.5 Building budget requests using ocean data

Worked example: marine protected area expansion budget submission

This worked example shows how to construct a complete budget submission for marine protected area (MPA) expansion using data from ocean accounts. The example uses synthetic data for a hypothetical coastal state seeking to expand MPA coverage from 15% to 30% of territorial waters over a three-year MTEF period, in line with global Target 3 of the Kunming-Montreal Global Biodiversity Framework.

Context and policy objective: The government seeks to expand marine protected area coverage from the current 15% (450 km2 out of 3,000 km2 territorial waters) to 30% (900 km2) by 2028. The Ministry of Environment prepares a budget submission for the MTEF 2026-2028 requesting $15 million capital expenditure for MPA establishment and $3 million annually for ongoing management.

Step 1: Quantify ecosystem services from existing MPAs. Using ecosystem service flow accounts (TG-3.2), the compilers estimate that existing MPAs provide:

• Coastal protection services: 50 km of coastline protected, avoiding $8 million annually in storm damage
• Carbon sequestration: 15,000 tonnes CO2 sequestered annually, valued at $50/tonne = $750,000
• Fish nursery habitat: Spillover effects support commercial fishing worth $5 million GVA annually
• Tourism services: 80,000 visitor-days annually, generating $4 million in coastal tourism revenue

Total ecosystem service value from existing MPAs: $17.75 million annually. Per-hectare service value: $17.75 million / 45,000 hectares = $394 per hectare per year.

Step 2: Project service benefits from MPA expansion. Projecting benefits from MPA expansion requires accounting for the likelihood that additional areas will differ from existing MPAs in ecosystem condition and productivity. Where ecosystem condition accounts (TG-3.1 Section 3.5 condition scores) are available for proposed expansion areas, compilers should weight the per-hectare service values by relative condition scores rather than applying a flat proportional scalar. Where condition data for expansion areas are unavailable, a marginal productivity discount is appropriate: the evidence consistently shows that MPA expansion into adjacent or lower-priority areas yields below-average per-hectare service values^[17]. A discount of 70% of the existing per-hectare average is used as a working assumption in this example—this assumption must be disclosed and a sensitivity analysis across 50--100% of the average per-hectare value should be presented alongside the central estimate. For guidance on spatial adjustment of service values, see TG-1.9 Valuation.

Applying a 70% marginal productivity factor: additional 45,000 hectares × $394/ha/yr × 0.70 = approximately $12.4 million in additional annual ecosystem services. For comparison, the upper bound (100% factor, fully proportional) is $17.75 million; the lower bound (50% factor) is $8.9 million.

Step 3: Calculate net present value of benefits. Using a 4% real discount rate consistent with TG-1.9 Valuation guidance, and assuming a 25-year planning horizon for management commitments:

$$\text{NPV of benefits} = \text{Annual service flow} \times \frac{1 - (1 + r)^{-n}}{r}$$

Where r = 0.04 and n = 25:

Central estimate: $12.4 million × 15.622 = $193.7 million Upper bound (100% factor): $17.75 million × 15.622 = $277.3 million Lower bound (50% factor): $8.9 million × 15.622 = $139.0 million

Step 4: Calculate net present value of costs. Capital costs of $15 million occur in years 0-2, with $5 million payable at the beginning of each year: year 0, year 1, year 2. Annual management costs of $3 million continue for 25 years.

$$\text{NPV of capital costs} = 5 \times (1 + \frac{1}{1.04} + \frac{1}{1.04^2}) = 5 \times 2.886 = 14.43 \text{ million}$$

Note: this formula assumes beginning-of-year payments. Compilers replicating this calculation with end-of-year payment conventions should use the factor (1/1.04 + 1/1.04² + 1/1.04³) = 2.775, yielding $13.88 million.

$$\text{NPV of management costs} = 3 \times 15.622 = 46.87 \text{ million}$$

$$\text{Total NPV of costs} = 14.43 + 46.87 = 61.3 \text{ million}$$

Step 5: Calculate benefit-cost ratio and present budget case.

Central estimate: $193.7 / $61.3 = 3.16 Upper bound (100% factor): $277.3 / $61.3 = 4.52 Lower bound (50% factor): $139.0 / $61.3 = 2.27

Note: The step-by-step figures above are authoritative. The budget submission narrative below rounds to one decimal place (3.16 → 3.2; 4.52 → 4.5; 2.27 → 2.3; $193.7M → $194M) for readability. Compilers replicating this example should carry unrounded figures through the calculation and apply rounding only in the final narrative.

Budget submission narrative: "The Ministry of Environment requests $15 million capital expenditure over 2026-2028 and $3 million annually for ongoing management to expand marine protected area coverage from 15% to 30% of territorial waters. This expansion will approximately double the supply of coastal protection, carbon sequestration, fish nursery, and tourism services currently valued at $17.75 million annually from existing MPAs. Applying a marginal productivity discount of 70% (to account for the likelihood that expansion areas have lower average productivity than existing MPAs), the expected additional annual service flow is $12.4 million. Using a 4% discount rate over 25 years, the central-estimate NPV of benefits is $194 million against costs of $61 million, yielding a benefit-cost ratio of 3.2 (range: 2.3 to 4.5 depending on marginal productivity assumption). This investment aligns with global Target 3 of the Kunming-Montreal Global Biodiversity Framework and will contribute to national commitments under the UN Convention on Biological Diversity. Physical accounts show that existing MPAs cover 45,000 hectares; ecosystem extent accounts will track the addition of 45,000 hectares of protected area under the expansion programme, with condition monitoring to verify that service supply targets are achieved."

Three decision use cases

Beyond MPA expansion, budget officials regularly face three additional decision use cases where ocean accounts provide critical evidence:

Use case 1: Fisheries management budget justification. A national fisheries agency seeks increased budget allocation for stock assessment and enforcement activities. Using the net GVA figure and depletion calculation derived in Section 3.4, a budget submission can state: "Fish stocks declined 9.5% in 2025 due to catch exceeding sustainable yield. At current depletion rates, the sector's economic contribution will decline 25% over the MTEF period. Increased management expenditure of $2.5 million annually will stabilise stocks through enhanced monitoring and enforcement, protecting the sector's contribution to GDP and employment."

Use case 2: Coastal protection infrastructure investment. A ministry of public works evaluates whether to invest in seawall construction or mangrove restoration for coastal protection. Using Ocean Accounts data:

• Ecosystem extent account shows 500 km2 of mangroves providing coastal protection services (TG-3.1)
• Ecosystem service valuation estimates mangroves provide protection equivalent to $12,000 per hectare per year
• Engineering cost estimate for equivalent seawall is $25 million per 10 km of coastline
• Mangrove restoration cost estimate is $8,000 per hectare

Budget submission: "Ecosystem accounts show that existing mangroves provide coastal protection services worth $600 million annually (50,000 hectares × $12,000/ha/year). For context, the NPV of this annual flow at 4% over 25 years is approximately $9.4 billion. Restoring 250 hectares of degraded mangrove at $8,000/ha (total $2 million) can provide coastal protection comparable to approximately 2.5 km of seawall costing $6.25 million, depending on local conditions such as wave exposure and ecosystem health, while also supplying carbon sequestration and fish nursery services not provided by grey infrastructure."

Use case 3: Medium-term revenue forecasting for resource extraction. A ministry of finance prepares MTEF revenue projections dependent on offshore oil extraction royalties. Using Ocean Accounts data:

• Mineral asset account shows proved reserves of 100 million barrels with 15-year extraction profile
• Gross revenue from extraction is projected at $6 billion over MTEF period
• Monetary depletion is $4.8 billion (80% of resource rent flows to asset depletion, not income)
• Net revenue contribution to government (royalties and taxes) is $600 million over MTEF period

Budget submission: "Offshore extraction generates substantial gross revenue but also depletes the national mineral asset base. Asset accounts show that 80% of resource rents represent depletion rather than income. MTEF revenue projections should account for the finite nature of reserves and declining production profile. Diversification investments funded from current resource revenues are essential to maintain fiscal capacity beyond the 15-year extraction horizon."

3.6 Integration with MTEF and annual budgets

Ocean Accounts are particularly valuable for MTEF development because the accounts structure inherently supports temporal comparison and trend analysis. Asset accounts record opening and closing stocks, enabling projection of future asset values under different management scenarios. Supply and use tables for ecosystem services provide baseline data for estimating the future flow of benefits from marine ecosystems.

To integrate Ocean Accounts with MTEF processes, budget officials should:

Establish baseline accounts: Compile or obtain baseline ocean economy thematic accounts and relevant asset accounts for the most recent period for which complete data are available. These baselines serve as the reference point for projecting future contributions and assessing trends.

Project asset and income trajectories: Using the asset account structure, project forward the expected stocks of key marine assets (fish stocks, mangrove extent, coral reef condition) under current management policies. Combine this with projections of ocean economy GDP contribution to estimate the medium-term fiscal significance of the ocean sector. The worked example in Section 3.5 illustrates this projection approach for marine protected areas.

Identify decision points: Use the accounts to identify decision points where changes in management expenditure or policy could affect asset trajectories. For example, if fish stock accounts show declining trends that will cross a sustainability threshold within the MTEF period, this provides a clear rationale for increased management investment. The threshold can be defined as the stock biomass at maximum sustainable yield (BMSY) from stock assessment models (TG-6.7).

Align reporting periods: Ensure that ocean accounting compilation cycles align with MTEF and annual budget preparation timelines. Ideally, accounts should be updated at least annually and be available to budget officials during the formulation phase of the budget cycle. For annual budget integration, the key requirement is timely availability of accounting data. Many countries compile national accounts with a lag of one to two years, and environmental accounts may have additional delays. Countries seeking to use Ocean Accounts in budget processes should prioritise timeliness in their compilation programs, potentially using provisional or "flash" estimates for recent periods to inform current budget decisions. Guidance on data quality requirements for provisional estimates will be addressed in TG-0.1 General Introduction; budget submissions using provisional ocean account data should indicate clearly that the figures are subject to revision.

3.7 Government expenditure on ocean-related functions

Government expenditure on ocean-related activities can be identified using the Classification of the Functions of Government (COFOG)^[18]. Table 2 maps specific COFOG classes to ocean-related government functions, adapted from the SF-MST approach to identifying tourism-related government functions^[19].

Table 2: COFOG classes relevant to ocean economy functions

Many COFOG classes in Table 2 are mixed—they cover both ocean-related and non-ocean functions within the same classification. Compilers must estimate an ocean share for each mixed class before summing expenditure across classes; applying Table 2 without ocean-share adjustment will overstate ocean-related public expenditure. For each mixed class, the ocean share should be estimated nationally using the most relevant administrative data (for example: for COFOG 04.2, the fisheries share of the agricultural ministry budget; for COFOG 03.1, the proportion of police personnel assigned to maritime units) and documented in the metadata annex, consistent with the methodology in SF-MST Table 3.9.^[19:1] Classes that are fully dedicated to ocean functions may be assigned an ocean ratio of 1.0.

For detailed guidance on compiling environmental protection expenditure accounts and tracking government expenditure by environmental purpose, see SEEA CF Chapter IV^[5:1] and TG-3.8 Government Activity Relevant to the Ocean.

4. Acknowledgements

This Circular has been approved for public circulation and comment by the GOAP Technical Experts Group in accordance with the Circular Publication Procedure.

Authors: [To be confirmed]

Reviewers: [To be confirmed]

5. References