Statistics: Adjusted savings: net forest depletion (% of GNI)
Definition: Adjusted savings: net forest depletion (% of GNI)
Net forest depletion is calculated as the product of unit resource rents and the excess of roundwood harvest over natural growth. If growth exceeds harvest, this figure is zero.
Development relevance: Adjusted savings: net forest depletion (% of GNI)
Adjusted net national income is particularly useful in monitoring low-income, resource-rich economies, like many countries in Sub-Saharan Africa, because such economies often see large natural resources depletion as well as substantial exports of resource rents to foreign mining companies. For recent years adjusted net national income gives a picture of economic growth that is strikingly different from the one provided by GDP. The key to increasing future consumption and thus the standard of living lies in increasing national wealth - including not only the traditional measures of capital (such as produced and human capital), but also natural capital. Natural capital comprises such assets as land, forests, and subsoil resources. All three types of capital are key to sustaining economic growth. By accounting for the consumption of fixed and natural capital depletion, adjusted net national income better measures the income available for consumption or for investment to increase a country's future consumption.
Limitations and Exceptions: Adjusted savings: net forest depletion (% of GNI)
A positive net depletion figure for forest resources implies that the harvest rate exceeds the rate of natural growth; this is not the same as deforestation, which represents a change in land use. In principle, there should be an addition to savings in countries where growth exceeds harvest, but empirical estimates suggest that most of this net growth is in forested areas that cannot currently be exploited economically. Because the depletion estimates reflect only timber values, they ignore all the external and nontimber benefits associated with standing forests.
Statistical concept and methodology: Adjusted savings: net forest depletion (% of GNI)
Adjusted net national income complements gross national income (GNI) in assessing economic progress (Hamilton and Ley 2010) by providing a broader measure of national income that accounts for the depletion of natural resources. Adjusted net national income is calculated by subtracting from GNI a charge for the consumption of fixed capital (a calculation that yields net national income) and for the depletion of natural resources. The deduction for the depletion of natural resources, which covers net forest depletion, energy depletion, and mineral depletion, reflects the decline in asset values associated with the extraction and harvesting of natural resources. This is analogous to depreciation of fixed assets. Growth rates of adjusted net national income are computed from constant price series deflated using the gross national expenditure (formerly domestic absorption) deflator.