Ken Henry Speech to the Environment Business Australia Forum

1

THE VALUE OF THE ENVIRONMENTADDRESS TO THE ENVIRONMENT BUSINESS AUSTRALIAFORUMKen HenrySecretary to the Treasury4 March 2010Introduction

Thank you for inviting me to speak here today.Many of you would have first-hand experience of complementingtraditional commercial reporting with social and environmentalassessments. Governments also, from time to time, producereports in these three dimensions. Today, I’d like to run throughsome of the thinking contained in the Government’s most recentcontribution in this space: the 2010 Intergenerational Report.I’m going to focus on the dimension that has received the leastattention historically; environmental sustainability.Broadly, sustainability is concerned with ensuring that the wellbeingof future generations is at least as high as that of the currentgeneration. The Intergenerational Report discusses how the

2

wellbeing of a generation depends in large part on the overall‘stock’ of resources that is inherited from previous generations.This stock includes commercial, social, human and environmentalresources.The contribution of environmental resources to wellbeing is broad-ranging. And it has both instrumental and constitutive features. Inboth ways, we are enriched by its existence. The environmentsustains life, supports our physical and mental health and providespsychic enjoyment. Constitutively, Australia’s unique biodiversity isintegral to our cultural identity. Instrumentally, the environmentsupports the consumption of market products as an input toproduction. These inputs include the ecosystem services thatgenerate soil fertility, provide protection from erosion and supporttourism.In intergenerational reporting, a discussion of the environment isespecially relevant because, provided it is maintained, theenvironment is likely to offer even greater benefits for futuregenerations. It is very likely that improvements in our materialwealth and our understanding of the environment will enhance our

3

appreciation and enjoyment of the environment over time. Andtechnology developments could generate opportunities for a moresophisticated use of the environment as an input to production.There seems to be great scope, for example, for developing new orimproved food crops, medicines and industrial products from ourbiological diversity.But this is all a qualitative assessment. A quantitative assessmentwould be useful. However, as outlined in the intergenerationalreport, it is very difficult to quantify the environment’s contribution towellbeing.Even so, it is highly significant that there is a renewed global focuson the valuation of intangible contributors to wellbeing, prompted inpart by the Report by the Commission on the Measurement ofEconomic Performance and Social Progress, led by Joseph Stiglitz,Amartya Sen and Jean Paul Fitoussi.

1

Valuation difficulties are not unique to environmental contributors towellbeing. As Stiglitz, Sen and Fitoussi have pointed out, there are

1

Stiglitz, J., Sen, A. and Fitoussi, J. 2009. Report by the Commission on the Measurement of Economic Performanceand Social Progress.www.stiglitz-sen-fitoussi.fr

Category:	Uncategorized.
Rating:
Upload Date:	03/05/2010
Copyright:	Attribution Non-commercial
Tags:	This document has no tags.

Documents

People