OA and Environmental Impact Assessment

1. Outcome

This Circular provides guidance on using Ocean Accounts to support environmental impact assessment (EIA) and strategic environmental assessment (SEA) processes in marine and coastal contexts. Environmental impact assessment is a procedural requirement in most jurisdictions for proposed developments that may significantly affect the environment, while strategic environmental assessment applies these principles at the level of policies, plans, and programmes. Effective EIA requires baseline data on environmental conditions, methods for predicting and evaluating potential impacts, and frameworks for assessing cumulative effects over time. Ocean Accounts, grounded in the System of Environmental-Economic Accounting (SEEA), provide structured information systems that directly support these assessment requirements.

By integrating Ocean Accounts into EIA and SEA practice, practitioners can establish rigorous baselines using ecosystem extent and condition accounts, quantify impacts using ecosystem service flows and physical residual accounts, assess cumulative effects through time series analysis, and--where appropriate--express environmental values in monetary terms consistent with national accounting principles. This integration strengthens the scientific basis for impact prediction, improves comparability across assessments, and supports more defensible regulatory decisions. The guidance addresses practical integration pathways while acknowledging the distinct purposes and legal contexts of accounting and assessment processes.

Decision use cases supported by this integration include: EIA baseline establishment from condition accounts (Section 3.1), cumulative impact assessment using time series of extent and residual flow accounts (Section 3.2), compensatory mitigation calculation using ecosystem service valuation (Section 3.3), and damage cost estimation for ecosystem degradation (Section 3.5). These applications connect Ocean Accounts to the EIA screening, scoping, impact prediction, mitigation design, and post-approval monitoring phases that structure the assessment workflow (Section 3.6).

Downward connections to account types enable these applications. Ecosystem condition accounts (TG-3.5 Ecosystem Condition Accounts) provide quantitative baselines characterizing ecosystem state relative to reference conditions. Asset accounts (TG-3.1 Asset Accounts) record opening and closing stocks of ecosystem assets and natural resources, enabling impact valuation and offset calculations. Ecosystem service accounts (TG-3.4 Ecosystem Services Accounts) quantify the flows of provisioning, regulating, and cultural services that may be affected by proposed developments, supporting assessment of significance and mitigation priorities. Physical supply and use tables (PSUTs) from SEEA Central Framework record residual flows such as nutrient discharges, pollutant emissions, and sediment inputs, enabling pollution impact assessment and cumulative pressure analysis (Section 3.4). Together, these account types provide the data infrastructure that makes account-based EIA operationally feasible.

The ecosystem condition and services account structures referenced throughout this Circular are detailed in TG-3.5 Ecosystem Condition Accounts and TG-3.4 Ecosystem Services Accounts, while appropriate use of monetary values in decision contexts is addressed in TG-1.9 Safe Usage of Monetary Valuation. The integration of accounts with impact assessment also supports marine hazard and risk assessment processes described in TG-2.9 OA and Ocean Risk Assessment and offshore energy assessment contexts addressed in TG-6.9 Offshore Energy.

2. Requirements

This Circular requires familiarity with:

• TG-0.1 General Introduction to Ocean Accounts -- for foundational understanding of Ocean Accounts, the Ocean Accounts Framework, and the relationship between ecosystem accounting and decision support
• TG-3.5 Ecosystem Condition Accounts -- for detailed technical guidance on compiling condition accounts referenced throughout this Circular, including condition indicators, reference levels, and condition indices
• TG-3.4 Ecosystem Services Accounts -- for detailed technical guidance on ecosystem service measurement and valuation approaches used in impact quantification

Related Circulars:

• TG-1.9 Safe Usage of Monetary Valuation -- provides guidance on appropriate use and interpretation of monetary values in decision contexts, essential for valuation applications in EIA
• TG-2.9 OA and Ocean Risk Assessment -- provides complementary guidance on hazard and risk assessment that informs the cumulative impact dimensions of EIA
• TG-3.1 Asset Accounts -- provides the framework for recording opening and closing stocks of ecosystem assets and natural resources, essential for valuation and offset calculations
• TG-3.7 Governance and Institutional Accounts -- provides context on the regulatory and institutional frameworks within which EIA operates

3. Guidance Material

3.1 Ocean Accounts as EIA Baseline Data

Environmental impact assessment fundamentally depends on establishing baseline conditions against which potential impacts can be measured. The United Nations Convention on the Law of the Sea (UNCLOS) Article 206 establishes that states shall assess the potential effects of planned activities when there are reasonable grounds to believe they may cause substantial pollution or significant and harmful changes to the marine environment^[1]. This assessment requires characterization of existing environmental conditions--the baseline from which change is measured.

Ocean Accounts provide a structured framework for organizing baseline data that serves EIA purposes. The SEEA Ecosystem Accounting framework identifies three primary account types that directly support baseline establishment^[2]:

Ecosystem extent accounts record the area of different marine and coastal ecosystem types within defined spatial units. For EIA purposes, extent accounts establish the baseline distribution and area of ecosystems such as seagrass meadows, coral reefs, mangroves, kelp forests, and open water habitats within a project's area of influence. The accounts organize spatial data consistently across time periods, enabling clear documentation of pre-project ecosystem configuration. The IUCN Global Ecosystem Typology provides the reference classification for ecosystem types, ensuring consistency across assessments^[3]. Technical guidance on compiling extent accounts is provided in TG-3.1 Asset Accounts, Section 3.5.1.

Ecosystem condition accounts record the state of ecosystem assets relative to reference conditions. Following the SEEA Ecosystem Accounting approach, condition is measured through ecosystem characteristics organized into physical, chemical, compositional, structural, functional, and landscape/seascape categories^[4]. For marine ecosystems, relevant characteristics include water quality parameters (temperature, salinity, dissolved oxygen, nutrient concentrations, pH), biodiversity indicators (species richness, population abundance, community composition), habitat structural complexity, and connectivity measures. Condition accounts establish quantitative baselines that EIA can reference when predicting how proposed activities may alter ecosystem state. Detailed guidance on condition account compilation is provided in TG-3.5 Ecosystem Condition Accounts.

Ecosystem services accounts record the contributions of ecosystems to benefits used in economic and other human activity^[5]. For EIA baseline purposes, services accounts document the current flows of provisioning services (fish provisioning, aquaculture production), regulating services (coastal protection, water purification, carbon sequestration), and cultural services (recreation, tourism, scientific research, spiritual and cultural values) that depend on the ecosystems within the project area. Technical guidance on services account compilation is provided in TG-3.4 Ecosystem Services Accounts.

The Framework for the Development of Environment Statistics (FDES) reinforces the importance of baseline conditions, noting that "without information on these baseline conditions, it is difficult for governments to judge the need for and efficacy of policies"^[6]. The same principle applies to project-level EIA: without rigorous baselines, impact significance cannot be reliably determined.

Application procedure for EIA practitioners

To access and use Ocean Accounts data for EIA baseline development, practitioners should follow this procedure:

Step 1: Identify relevant accounting areas. Determine which Ecosystem Accounting Areas (EAAs) or Basic Spatial Units (BSUs) intersect with the proposed project's area of influence. Contact the national statistical office or environmental agency responsible for Ocean Accounts compilation to obtain spatial boundary files.

Step 2: Obtain account data. Request the most recent ecosystem extent accounts, condition accounts, and service flow accounts for the relevant EAAs. Ideally, request time series data covering at least two accounting periods to establish baseline trends rather than single-point-in-time values.

Step 3: Assess spatial resolution. Compare the spatial resolution of the accounts (typically compiled at regional or sub-national scale) with the scale of the proposed project. If the project footprint is smaller than the accounting spatial unit, additional project-specific surveys may be needed to characterize site-level variability while ensuring consistency with the accounting framework classifications and methods.

Step 4: Extract baseline indicators. From condition accounts, extract the values of condition variables relevant to the ecosystem types present in the project area. From extent accounts, extract opening extent (hectares or km²) for each ecosystem type. From service flow accounts, extract the annual flow rates of ecosystem services potentially affected by the project.

Step 5: Document reference conditions. Identify the reference levels used in the condition accounts and document these as the baseline against which project impacts will be assessed. Where account data are not available or are of insufficient spatial resolution, conduct supplementary baseline surveys using methods consistent with the accounting framework, enabling future contribution of project monitoring data back to the accounts.

Integration of Ocean Accounts into EIA baseline development offers several advantages over traditional approaches:

1. Consistency: The accounting framework ensures consistency in definitions, classifications, and measurement methods across different assessments
2. Spatial standardization: The spatial organization using Basic Spatial Units (BSUs) and Ecosystem Accounting Areas (EAAs) provides a standardized geographic framework
3. Temporal depth: The time series nature of accounts means that baselines can reference multiple accounting periods rather than single-point-in-time surveys, reducing the influence of seasonal or interannual variability on baseline characterization
4. Contextual integration: Integration with national environmental and economic statistics enables impact assessments to be placed within broader regional and national contexts

SEEA Ecosystem Accounting explicitly recognizes EIA as one application of condition accounts, noting that condition data "can be used to inform policy- and decision-making across a range of sectors that impact or depend on ecosystems and natural resources, including land-use planning, environmental impact assessment, agricultural planning and authorization processes, and programmes for ecosystem rehabilitation or restoration"^[7].

Existing ocean accounts implementations illustrate the practical value of account-based baselines. Australia's Environmental-Economic Accounts provide ecosystem condition indicators for marine regions that can serve as regional baselines for project-level EIA. The United Kingdom's natural capital accounts include marine ecosystem extent and condition data that support consistency across assessments within UK waters. Norway's ocean accounts programme integrates physical and monetary data for marine ecosystems along its extensive coastline. While these national programmes vary in scope and maturity, they demonstrate that account-based baselines are operationally feasible and provide data infrastructure that strengthens EIA practice at both project and strategic levels.

3.2 Cumulative Impact Assessment

Individual EIAs assess project-specific impacts, but marine ecosystems increasingly face cumulative effects from multiple activities and stressors operating over extended time periods and spatial scales. The FDES conceptual framework recognizes that "it is often difficult to establish causal links between changes in environmental quality and individual human activities or natural processes because the impact results from combined and cumulative processes and effects over space and time"^[8].

Ocean Accounts provide an information infrastructure that supports cumulative impact assessment in several ways:

Time series analysis: Ocean Accounts are designed to be compiled regularly (ideally annually) to support ongoing monitoring and trend analysis^[9]. This time series structure enables assessment of cumulative changes in ecosystem extent, condition, and service flows over extended periods. Where accounts reveal declining condition indices or contracting ecosystem extent over successive accounting periods, this provides objective evidence of cumulative degradation that individual project EIAs should consider. For example, if coral reef extent accounts for a coastal region show a decline from 5,000 ha in 2020 to 4,200 ha in 2025, this 16% reduction provides quantitative context for assessing whether an additional coastal development project would contribute to cumulative habitat loss beyond sustainable thresholds.

Spatial integration: The accounting framework integrates data across defined spatial units within Ecosystem Accounting Areas. This spatial structure supports assessment of how multiple projects and activities within a region combine to affect ecosystem assets. Rather than assessing each project in isolation, cumulative assessment can reference accounts that capture the aggregate state and trends of ecosystems subject to multiple pressures. The spatial aggregation from Basic Spatial Units to EAAs enables practitioners to assess whether localized project impacts, when combined with other activities within the broader region, may trigger ecosystem-scale responses.

Physical flow accounts: The SEEA Central Framework establishes accounts for physical flows between the economy and environment, including residual flows such as emissions, wastewater, and solid waste^[10]. These physical supply and use tables (PSUTs) enable tracking of pollution loads, nutrient flows, and other pressures that cumulate across activities and time. For marine environments, relevant residual flows include nutrient discharges, sediment inputs, chemical pollutants, marine debris, and greenhouse gas emissions affecting ocean acidification and warming. Compiling PSUTs at regional scale allows practitioners to assess whether a proposed project's incremental loading would exceed assimilative capacity when added to existing background loads.

Pressure-state relationships: By linking physical flow accounts (pressures) to ecosystem condition accounts (state), Ocean Accounts support analysis of pressure-state relationships essential to cumulative assessment. The Taskforce on Nature-related Financial Disclosures (TNFD) defines impacts as "changes in the state of nature (quality or quantity), which may result in changes to the capacity of nature to provide social and economic functions. Impacts can be positive or negative. They can be the result of an organisation's or another party's actions and can be direct, indirect or cumulative"^[11]. This definition emphasizes that cumulative impacts manifest as changes in ecosystem state--exactly what condition accounts are designed to measure.

For cumulative impact assessment in practice, Ocean Accounts support a structured approach:

Table 1: Cumulative Impact Assessment Framework

The SEEA EA research agenda recognizes the importance of understanding ecosystem capacity and thresholds, noting connections to the "critical natural capital" concept in economics and the "planetary boundaries" concept in ecology^[12]. Cumulative assessment should consider whether additional impacts risk crossing such thresholds. The Guidelines on Biophysical Modelling for Ecosystem Accounting provides methods for assessing ecosystem capacity that can inform threshold identification^[13].

Cumulative impact assessment requirements vary across regulatory frameworks but share common analytical needs that accounts can support. Under the EU Strategic Environmental Assessment (SEA) Directive (2001/42/EC), assessment of plans and programmes must consider cumulative effects on the environment, including biodiversity and ecosystem interactions. Under the United States National Environmental Policy Act (NEPA), agencies must consider cumulative impacts defined as impacts resulting from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions. In both contexts, Ocean Accounts provide the time series data, spatial integration, and pressure-state linkages necessary for rigorous cumulative analysis. By establishing a consistent information base across assessments within a jurisdiction, accounts reduce the fragmentation that undermines cumulative assessment when each project EIA constructs its baseline independently.

3.3 Ecosystem Service Valuation in EIA

Monetary valuation of ecosystem services can inform EIA by expressing environmental impacts in terms comparable to project economic benefits. This supports more complete cost-benefit analysis and can reveal the full costs of development pathways that damage marine ecosystems. However, valuation requires careful application of appropriate methods and interpretation of results. Readers should consult TG-1.9 Safe Usage of Monetary Valuation for detailed guidance on appropriate use of monetary valuation in decision contexts.

The SEEA Ecosystem Accounting framework establishes exchange values as the appropriate monetary concept for accounting purposes^[14]. Exchange values represent "the values at which goods, services, labour or assets are in fact exchanged or else could be exchanged for cash"^[15]. This differs from welfare values commonly used in environmental economics, which include consumer surplus and other non-market values. While accounting uses exchange values for consistency with national accounts, EIA cost-benefit analysis may appropriately use welfare values that capture broader social values. The choice of valuation concept affects whether results can be directly compared with project economic values such as net present value of investment returns.

The UN SEEA Valuation guidance establishes a tiered hierarchy of valuation methods, ranked by proximity to observed market prices^[16]. This hierarchy is consistent with the methodological framework presented in TG-1.9 Safe Usage of Monetary Valuation and aligns with the broader SEEA EA monetary valuation principles. As valuation methods and guidance continue to develop, compilers should consult the most recent SEEA technical guidance and ensure that their application in EIA contexts follows the principles outlined in TG-1.9.

Table 2: Valuation Method Hierarchy for Marine Ecosystem Services

For EIA applications, valuation can support:

• Impact quantification: Expressing predicted changes in ecosystem services in monetary terms enables comparison with project economic benefits
• Mitigation prioritization: Valuation reveals which ecosystem services have greatest economic significance, guiding mitigation priorities. For example, if coastal protection services are valued at USD 12,000/ha/year while cultural services are valued at USD 800/ha/year, mitigation efforts may prioritize protection of reef structures that deliver coastal protection over purely aesthetic considerations.
• Compensation determination: Where residual impacts require offsetting, valuation informs compensation calculations using asset valuation approaches from TG-3.1 Asset Accounts
• Stakeholder communication: Monetary values can communicate environmental significance to audiences more familiar with economic than ecological metrics

Important limitations apply. The SEEA EA acknowledges that "monetary values will not fully reflect the importance of ecosystems for people and the economy"^[17]. Specific limitations relevant to EIA include:

1. Many ecosystem services lack market values or close market analogues
2. Non-use values (existence, bequest, option values) are excluded from exchange value accounting
3. Indigenous and local community relationships with marine environments may not be commensurable with monetary valuation
4. Exchange values may understate impacts on ecosystem services that are underpriced or unpriced in existing markets
5. Valuation uncertainty may be substantial, particularly for services far from market transactions

EIA practitioners should use monetary values as one input alongside qualitative and non-monetary quantitative information about impacts. TG-1.9 Safe Usage of Monetary Valuation provides detailed guidance on contexts where monetary valuation is and is not appropriate, including the recommendation that physical accounts should always be compiled and published alongside monetary accounts to support appropriate interpretation.

3.4 Residual Flows and Pollution Assessment

Physical flow accounts within the SEEA Central Framework provide a systematic structure for recording emissions and residual flows from economic activities to the environment^[18]. For marine and coastal EIA, these accounts support assessment of pollution impacts from proposed developments.

The SEEA Central Framework defines emissions as "substances released to the environment by establishments and households as a result of production, consumption and accumulation processes"^[19]. The framework distinguishes emissions to air, water, and soil, with specific accounting treatments for each. For marine environments, relevant residual flows include:

Table 3: Residual Flow Categories for Marine EIA

Physical supply and use tables organize these flows, recording which industries generate which residuals and distinguishing residuals collected/treated from those flowing directly to the environment. For EIA, this structure enables:

Source attribution: Identifying which economic activities contribute which residual flows to marine receiving environments. For example, physical flow accounts may reveal that aquaculture operations contribute 45% of total nitrogen loading to a coastal embayment, land-based agriculture contributes 35%, and urban wastewater contributes 20%, providing context for assessing a proposed expansion of aquaculture operations.

Load estimation: Quantifying total residual flows entering marine ecosystems from multiple sources. Accounts compiled at regional scale provide baseline pollution loading against which project incremental loads can be compared.

Pathway tracing: Following residual flows from generation through collection, treatment, and ultimate discharge. This enables assessment of whether proposed treatment measures are adequate to prevent unacceptable impacts.

Impact linkage: Connecting residual flow accounts to ecosystem condition accounts to assess how pollution loads affect ecosystem state. For example, if condition accounts show declining dissolved oxygen in a coastal zone while physical flow accounts show increasing nutrient loads, this establishes an empirical pressure-state relationship that can inform EIA predictions for projects that would add nutrient loads.

The FDES organizes environmental statistics relevant to residuals into Component 3, covering emissions to air (3.1), wastewater generation and management (3.2), waste generation and management (3.3), and release of chemical substances (3.4)^[20]. These statistics, organized within the FDES framework, provide source data for compiling SEEA physical flow accounts.

For EIA application, integration of Ocean Accounts enables a five-step pollution assessment framework:

1. Baseline pollutant loading: Reference existing physical flow accounts to characterize current residual flows to the marine environment within the project area. If PSUTs are unavailable, request data from environmental agencies on existing pollution loads by source category and discharge location.
2. Incremental loading: Estimate additional residual flows from the proposed project using emission factors appropriate to the activity type, process technology, and any proposed treatment systems.
3. Cumulative loading: Sum baseline and incremental loads to assess cumulative pollution pressure. Compare cumulative loading against water quality standards or ecosystem assimilative capacity thresholds.
4. Condition response: Use established relationships between residual loads and ecosystem condition indicators (from historical accounts or scientific literature) to predict impact on condition accounts. For example, if historical data show that nitrogen loading >100 kg/ha/year correlates with seagrass canopy density <60%, this threshold informs impact prediction.
5. Service effects: Trace how predicted condition changes may affect ecosystem service flows using the relationships documented in TG-3.4 Ecosystem Services Accounts.

This integrated approach connects pollution assessment to ecosystem accounting, providing a more complete picture than assessment of pollutant concentrations alone. By grounding EIA in the same accounting framework used for national environmental monitoring, this approach supports feedback loops where EIA monitoring data contribute to updating physical flow accounts.

3.5 Ecosystem Degradation and Damage Cost Valuation

Ecosystem degradation--the decline in ecosystem condition--can be expressed in monetary terms using damage cost approaches that estimate the economic value of lost ecosystem service flows resulting from condition decline. This application is particularly relevant for EIA when quantifying residual impacts after mitigation, calculating compensation requirements, or comparing alternative development scenarios.

The SEEA Ecosystem Accounting framework defines ecosystem degradation as the decline in the monetary value of an ecosystem asset resulting from declining condition during an accounting period^[21]. Degradation is measured by:

Degradation = (Condition decline) × (Present value of affected service flows)

For EIA application, this formula enables practitioners to estimate the damage cost of predicted ecosystem impacts. Consider a coastal development expected to reduce coral reef condition index from 0.75 to 0.60 (20% decline) across 100 hectares. If the reef provides coastal protection services valued at USD 10,000/ha/year and biodiversity habitat services valued at USD 2,000/ha/year, and using a 4% discount rate for perpetual service flows:

Worked calculation:

• Annual service flow per hectare = USD 12,000/ha/year
• Asset value per hectare (perpetual annuity) = USD 12,000 / 0.04 = USD 300,000/ha
• Total reef asset value (100 ha) = USD 30,000,000
• Degradation (20% condition decline) = 0.20 × USD 30,000,000 = USD 6,000,000

This damage cost represents the present value of lost ecosystem service flows over the lifetime of the asset, providing a basis for comparing mitigation costs against avoided damages. If engineering solutions to reduce reef impacts would cost USD 4,000,000, the cost-benefit comparison suggests such measures are economically justified.

Important methodological considerations:

Non-linearity: The relationship between condition decline and service flow reduction may not be linear. Some services may exhibit threshold responses where small condition declines produce disproportionate service losses. Practitioners should consult condition-service relationships from ecosystem-specific literature or apply conservative assumptions (e.g., service loss proportional to condition decline squared) when non-linear responses are expected.

Service-specific responses: Different ecosystem services may respond differently to the same condition change. For example, coral cover decline may reduce coastal protection services linearly but reduce biodiversity habitat services exponentially if critical shelter structures are lost. Degradation estimates should separately assess each major service type.

Discount rate sensitivity: The choice of discount rate substantially affects damage cost estimates, particularly for long-lived impacts. TG-1.9 Safe Usage of Monetary Valuation recommends conducting sensitivity analysis using a range of discount rates (e.g., 2%, 4%, 7%) to assess robustness of conclusions.

Uncertainty: Both condition predictions and service valuations involve uncertainty. Practitioners should propagate uncertainty through calculations and present results as ranges rather than point estimates where feasible.

For EIA contexts, degradation-based damage costs provide a quantitative basis for regulatory decisions about impact acceptability, mitigation requirements, and offset sizing. The monetary values enable direct comparison with project economic benefits, supporting more informed decisions about whether development should proceed, what conditions should be imposed, and what compensation is required for residual impacts.

3.6 EIA-Account Integration Points

The integration of Ocean Accounts into EIA practice follows the standard EIA process phases, with each phase drawing on different account types and data products. Table 4 maps these integration points, providing a practical reference for EIA practitioners seeking to incorporate accounting data into their assessments.

Table 4: EIA-Account Integration Points

This integration framework illustrates how accounts support each stage of the EIA process, from initial screening through post-approval monitoring. During screening, ecosystem extent accounts identify whether sensitive or high-value ecosystem types are present within and adjacent to the proposed project area, informing decisions about whether full EIA is required. A simple query to the extent account database (e.g., "Are coral reefs, seagrass meadows, or mangroves present within 5 km of the project footprint?") provides an efficient screening filter.

During scoping, condition accounts inform the selection of key condition variables to be monitored in project-specific baseline surveys and post-approval monitoring. By using the same condition variables as the national accounts, EIA practitioners ensure that project monitoring data can contribute to updating accounts in future compilation cycles.

During baseline establishment, condition accounts provide quantitative reference data on the state of ecosystems, reducing reliance on costly one-off baseline surveys and ensuring consistency with broader national or regional datasets. Where account data are available at appropriate spatial resolution, they can substitute for or supplement field surveys, lowering EIA costs while maintaining scientific rigor.

During impact prediction, ecosystem service flow accounts enable practitioners to quantify which services may be affected and estimate the magnitude of change. The linkages between condition variables and service flows documented in TG-3.4 Ecosystem Services Accounts provide the basis for translating predicted condition changes into expected service flow impacts.

During mitigation design, monetary asset values from the accounts support cost-benefit comparison of alternative mitigation measures, helping to identify the most efficient approaches. For example, if protecting 10 hectares of reef costs USD 500,000 but provides USD 3,000,000 in avoided degradation (using asset valuation methods), this demonstrates that protection is economically justified.

During monitoring, condition indicators drawn from the accounting framework provide standardized metrics for tracking post-project changes against the same baselines used in the original assessment. This ensures comparability and enables assessment of whether actual impacts match predictions, supporting adaptive management.

This phased integration also supports the feedback loop between project-level monitoring and national accounting: monitoring data collected through EIA compliance can contribute to updating ecosystem condition and extent accounts, strengthening the information base for future assessments. Regulatory agencies should establish data-sharing protocols that enable project monitoring data to flow back to national accounts compilers, creating a virtuous cycle of continuous improvement.

3.7 Linking Accounts to Approval Processes

The procedural integration of Ocean Accounts into regulatory EIA processes requires consideration of institutional arrangements, data governance, and the distinct purposes of accounting versus assessment.

Institutional arrangements: Effective integration requires coordination between national statistical offices (NSOs) that typically lead ecosystem accounting, environmental regulatory agencies that administer EIA, and technical agencies that manage environmental monitoring data. The SEEA EA recognizes this need, noting that "implementation necessitates a highly collaborative approach and the active participation of representatives of many different agencies and disciplines, including geography, ecology, economics and statistics"^[22]. For EIA integration, this collaboration should extend to environmental assessment practitioners and regulators through formal agreements specifying data access, update protocols, and reciprocal obligations.

Data access and standardization: EIA practitioners require access to Ocean Accounts data in usable formats. This includes:

• Spatial data on ecosystem extent at resolution relevant to project scales (ideally vector layers with <1 km² spatial units)
• Condition account data for ecosystem types within project areas, including raw variable values and normalized indicators
• Physical flow data for residual loads in project regions, disaggregated by source sector
• Service flow data for ecosystem services potentially affected, including valuation coefficients where available

Standardized data products derived from accounts can facilitate EIA application. The spatial organization of accounts using defined BSUs and EAAs provides a geographic framework that EIA practitioners can reference. NSOs and environmental agencies should jointly develop data access portals or API services that enable EIA practitioners to query accounts by geographic coordinates, ecosystem type, or administrative region.

Temporal alignment: EIA timelines often do not align with accounting periods. Assessments may occur between account compilation years or require baseline data for periods before accounting began. Account data should be supplemented with project-specific surveys while ensuring consistency in methods and definitions with the accounting framework. Where accounts are compiled biennially or triennially rather than annually, interpolation methods may be needed to estimate conditions for intermediate years, with uncertainty clearly documented.

Legal and procedural integration: Formal integration of accounts into EIA requires regulatory recognition. Options include:

Table 5: Regulatory Integration Mechanisms

Monitoring and follow-up: Post-approval monitoring can contribute data back to accounts, creating a feedback loop between project-level assessment and national accounting. Where EIA predicts impacts on specific condition indicators, monitoring these indicators strengthens both compliance verification and the accounts themselves. Regulators should establish reporting requirements that standardize monitoring data formats to facilitate integration with national accounts databases.

The SEEA EA notes that accounts can support "the design and monitoring of policy responses" including "authorization processes"^[23]. This explicitly encompasses the regulatory authorization function that EIA serves.

Environmental offsets and no-net-loss policies

Ocean Accounts provide a quantitative foundation for environmental offset and no-net-loss policies that are increasingly required in marine EIA contexts. Where residual impacts remain after mitigation, many jurisdictions require biodiversity offsets or compensatory measures to achieve no net loss of ecosystem values.

Ecosystem extent and condition accounts establish the quantitative baselines against which offset requirements can be calculated. For example, if a port expansion will result in the loss of 5 hectares of seagrass at condition index 0.80, the offset requirement can be calculated as:

Offset requirement = (Lost extent) × (Condition) × (Multiplier)

Using a 2:1 multiplier to account for implementation risk and time lag:

Offset = 5 ha × 0.80 × 2 = 8 hectares of seagrass at reference condition

This can be achieved through restoration of 10 hectares of degraded seagrass from condition 0.60 to 0.80 (net gain of 0.20 × 10 = 2 ha-equivalents, less than the 8 required) or protection of 8 hectares of high-quality seagrass at risk of loss.

Ecosystem service flow accounts enable assessment of whether proposed offsets adequately compensate for lost service flows, not just habitat area. If the 5 hectares of lost seagrass provided coastal stabilization services valued at USD 2,000/ha/year and fish nursery services valued at USD 1,500/ha/year, the offset must provide equivalent service flows:

Required service compensation = 5 ha × USD 3,500/ha/year = USD 17,500/year

The offsetting actions must demonstrably provide this level of service flow to achieve functional equivalence.

Monetary asset values from the accounts can inform offset pricing and compensation calculations where financial payments are used in lieu of physical offsetting. Using asset valuation methods from TG-3.1 Asset Accounts, the present value of the lost asset is:

Lost asset value = (Annual service flow) / (Discount rate) Lost asset value = USD 17,500 / 0.04 = USD 437,500

This provides a quantitative basis for determining financial compensation where physical offsetting is not feasible.

Time series data support assessment of whether offsets achieve their intended outcomes over the long term. Post-implementation monitoring should track condition variables and service flows using the same methods as the accounts, enabling objective assessment of offset success and triggering adaptive management responses if targets are not met.

The accounting framework ensures that offset calculations use consistent methods and data across projects, reducing the risk of systematic underestimation of offset requirements. Countries implementing marine offset policies should ensure that offset accounting is consistent with their broader Ocean Accounts framework to maintain coherence between project-level compensation and national ecosystem reporting^[24].

Practical considerations for regulatory integration include:

• Proportionality: Account-based assessment should be proportionate to project scale and impact significance. Major projects warrant detailed integration; minor projects may reference summary indicators.
• Uncertainty acknowledgment: Both accounts and EIA involve uncertainty. Integration should maintain transparency about data quality and predictive confidence, using uncertainty ranges where feasible.
• Adaptive management: Account time series enable adaptive management by tracking actual changes against EIA predictions, informing management responses when impacts exceed predictions.
• Transboundary considerations: Marine ecosystems often cross jurisdictional boundaries. Account-based assessment can support transboundary EIA by providing consistent data frameworks across jurisdictions, particularly for shared regional seas.

3.8 Worked Example: EIA for Coastal Development Using OA Data

This section presents a synthetic worked example demonstrating how Ocean Accounts data support EIA for a proposed coastal resort development. The example illustrates the application procedure described in Section 3.1, the integration points mapped in Section 3.6, and the valuation and offset calculations detailed in Sections 3.3, 3.5, and 3.7.

Project description

A private developer proposes to construct a 200-room coastal resort on a 15-hectare site at Coral Bay, including hotel buildings, marina facilities for 50 vessels, wastewater treatment infrastructure, and beach access amenities. The project is located within the Coral Bay Ecosystem Accounting Area, for which the national statistical office compiles annual ocean accounts.

Step 1: Screening and account data access

The EIA practitioner contacts the NSO to obtain ecosystem extent accounts for the Coral Bay EAA. The extent account reveals that within 2 km of the proposed site:

• 120 hectares of fringing coral reef (condition index 0.72)
• 45 hectares of seagrass meadow (condition index 0.68)
• 180 hectares of mangrove forest (condition index 0.75)

The presence of these sensitive ecosystems triggers full EIA requirements under national regulations.

Step 2: Baseline establishment from condition accounts

The practitioner requests condition accounts for the three ecosystem types. The accounts provide baseline values for six ECT classes:

Coral Reef Condition Variables (2025 baseline):

• A1 Physical: Sea surface temperature 28.2°C (reference: 27.5°C)
• A2 Chemical: pH 8.05 (reference: 8.15)
• B1 Compositional: Coral species richness 42 species (reference: 55 species)
• B2 Structural: Live coral cover 38% (reference: 55%)
• B3 Functional: Net calcification 4.8 kg CaCO₃/m²/yr (reference: 7.0)
• C Seascape: Connectivity index 0.65 (reference: 0.85)

These baseline values establish the pre-project state against which impacts will be assessed.

Step 3: Impact prediction using condition-service relationships

The project Environmental Impact Statement predicts that marina construction will directly impact 2 hectares of coral reef and 1 hectare of seagrass through dredging. Indirect impacts from increased turbidity, nutrient loading, and visitor pressure are predicted to reduce coral reef condition index from 0.72 to 0.60 across an additional 8 hectares (total 10 ha affected, with 2 ha direct loss and 8 ha degradation).

Using ecosystem service flow accounts from TG-3.4 Ecosystem Services Accounts, the practitioner quantifies affected services:

Coral Reef Services (per hectare per year):

• Coastal protection (avoided damage): USD 8,500/ha/yr
• Fish nursery habitat: USD 1,800/ha/yr
• Tourism/recreation: USD 3,200/ha/yr
• Total annual flow: USD 13,500/ha/yr

Seagrass Services (per hectare per year):

• Coastal stabilization: USD 2,000/ha/yr
• Carbon sequestration: USD 400/ha/yr (at USD 50/tonne CO₂)
• Fish nursery habitat: USD 1,200/ha/yr
• Total annual flow: USD 3,600/ha/yr

Step 4: Degradation and damage cost calculation

Using methods from Section 3.5:

Coral reef degradation:

• Extent loss (2 ha): Asset value = 2 ha × (USD 13,500/yr / 0.04) = USD 675,000
• Condition decline (8 ha, 17% decline from 0.72 to 0.60): Degradation = 8 ha × (USD 13,500/yr / 0.04) × 0.17 = USD 459,000
• Total coral reef damage: USD 1,134,000

Seagrass degradation:

• Extent loss (1 ha): Asset value = 1 ha × (USD 3,600/yr / 0.04) = USD 90,000

Total damage cost: USD 1,224,000

This quantification enables cost-benefit comparison with project economic benefits (estimated at USD 8,500,000 NPV over 30 years) and informs mitigation design.

Step 5: Mitigation design and residual impact assessment

The developer proposes three mitigation measures:

1. Relocate marina to sandy substrate, avoiding direct coral reef impact (saves 2 ha reef, cost USD 400,000)
2. Install advanced wastewater treatment to reduce nutrient loading by 80% (reduces condition decline from 8 ha to 3 ha, cost USD 250,000)
3. Implement visitor management plan limiting reef access (further reduces degraded area from 3 ha to 2 ha, cost USD 50,000)

Residual impacts after mitigation:

• Seagrass loss: 1 ha (damage cost USD 90,000)
• Coral condition decline: 2 ha at 17% decline (damage cost 2 × USD 337,500 × 0.17 = USD 115,000)
• Total residual damage: USD 205,000

Mitigation cost: USD 700,000

Avoided damage: USD 1,224,000 - USD 205,000 = USD 1,019,000

Cost-benefit analysis shows mitigation is economically justified (benefit/cost ratio 1.46).

Step 6: Offset calculation

For residual impacts, regulators require 3:1 biodiversity offset:

Seagrass offset: 1 ha loss × 3 = 3 hectares of seagrass at reference condition required. The developer commits to restoring 4 hectares of degraded seagrass from condition 0.50 to 0.80, providing net gain of 4 × 0.30 = 1.2 ha-equivalents (meets requirement with margin).

Coral offset: 2 ha × 0.17 decline × 3 = 1.02 ha-equivalents required. The developer commits to funding a 5-hectare marine protected area expansion, protecting reef at condition 0.75 from fishing pressure that would otherwise reduce condition to 0.55, providing 5 × 0.20 = 1.0 ha-equivalents (meets requirement).

Step 7: Monitoring using account indicators

The approved EIA includes monitoring requirements using the same condition variables as national accounts:

• Annual monitoring of coral cover, species richness, and pH at 10 fixed stations within 1 km of development
• Biennial seagrass surveys measuring canopy density and extent
• Quarterly water quality monitoring for nutrients, turbidity, and temperature

Monitoring data will be provided to the NSO to support future account updates, enabling assessment of whether actual impacts match predictions and whether offsets achieve intended outcomes.

Summary of account integration benefits

This worked example demonstrates how Ocean Accounts integration:

1. Streamlined baseline establishment by providing standardized ecosystem extent and condition data
2. Enabled quantitative impact assessment through condition-service relationships from service flow accounts
3. Supported economic analysis through damage cost valuation using asset account methods
4. Informed mitigation design through cost-benefit comparison of alternative measures
5. Provided objective basis for offset calculation using extent and condition metrics
6. Established monitoring framework using account indicators for post-approval compliance

The developer reduced EIA costs by USD 120,000 by using existing account data rather than commissioning comprehensive baseline surveys, while achieving higher scientific rigor through consistency with national monitoring programmes. Regulators gained confidence in impact predictions through linkage to established pressure-state relationships in the accounts. This integration demonstrates the operational feasibility and decision-utility of account-based EIA.

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: Gerald Singh (Co-Author)

Reviewers: [To be added following review process]

5. References