Enriching the Italian genuine saving with water and soil depletion : national trends and regional differences

Abstract

National and international governments aim to promote the responsible management of the natural capital but measuring its contribution to economic growth is still a challenging exercise. The natural capital supports a plurality of environmental functions whereas the economic growth is frequently measured by aggregated indicators. In this paper, we propose an extended version of the Genuine Saving macro indicator to account for water and soil depletion. Further, as natural capital is spatially heterogeneous we estimate Genuine Saving for Italy for the period 2000–2015 at the regional level. Whilst the case study produces specific results for Italy the methodological framework is broadly applicable to other states. The Italian comparison shows that soil and water provide an absolute change of roughly 1% of the GS but average relative regional variations are between 5 and 33% of GDP, showing that the geographical scale of sustainability analysis is a crucial element for responsible management of national assets. The methodological contribution suggests that the Genuine Saving can support policy makers in developing targeted policies for sustainable growth.