Conference Agenda

Natural capital is an important source of wealth and income, but these assets and corresponding flows of ecosystem services are not necessarily equally distributed within countries. This paper develops a framework to systematically record the distribution of ecosystem service benefits and nature dependencies in the population by integrating the UN system for ecosystem accounting with distributional national accounts, creating distributional ecosystem accounts. I apply the framework to forest ecosystem assets in Finland, combining high-resolution geospatial forest data and micro level income data from administrative registries, linking all privately and publicly owned forests to individuals. To demonstrate how ecosystems contribute to incomes and inequality, four forest-based ecosystem services - timber provisioning, carbon sequestration, habitat maintenance, and outdoor recreation - are quantified and the beneficiaries are identified in the income distribution. I then consider the distributional impacts of forest harvests by allocating costs of natural capital depreciation across the income distribution. When applying policy instruments to incentivise socially optimal flows of ecosystem services, taxing harvests comes with an additional benefit as it has a progressive distributional effect, while subsidising providers of ecosystem services disproportionally benefits high-income households.