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Glossary

Asset value. The asset value of a natural resource is conceptually the market value of the asset if it was sold. However, in practice market values will not always be available. Where market prices do not exist the asset value is estimated as the net present value of discounted resource rent.

Discount rate. Annual percentage by which future income is discounted to give an equivalent value in the present period. The discount rate expresses a time preference for money now rather than in the future. A social discount rate or social rate of time preference reflects the time and risk preferences of society as a whole. It reflects the value that society attaches to present, as opposed to future consumption. A social discount rate will usually be applied by government in relation to its decision-making on behalf of a society.

Environmental assets. Naturally occurring living and non-living components of Earth, together constituting the biophysical environment, which may provide benefits to humanity.

Gigawatt hour (GWh). Unit of energy representing one billion (1,000,000,000) watt hours and is equivalent to one million kilowatt hours. Gigawatt hours are often used as a measure of the output of large electricity power stations. One GWh equals 0.0036 petajoules.

Gross operating surplus. Surplus generated by operating activities after the labour input has been compensated.

Lifespan. Estimated time for which an asset will continue to be in use and produce revenue.

Megawatt. Unit for measuring power that is equivalent to one million watts. A megawatt hour (MWh) is equal to 1,000 kilowatt hours (KWh). It is equal to 1,000 kilowatts of electricity used continuously for one hour.

Net generation. Generation that excludes that used on-site for auxiliary services (eg lighting, coal grinders) and internal losses. Net generation does not include transmission/distribution losses.

Net operating surplus (NOS). Gross operating surplus, less consumption of fixed capital.

Net present value (NPV). Value of an asset based on the summed value of discounted future earnings from the use of the asset.

Non-renewable energy. Exhaustible energy source that cannot be regenerated after exploitation.

Rate of return. Measures the ‘profitability’ of an asset. Often calculated by dividing the operating surplus by the capital stock. Stats NZ adopted a 4 percent real rate of return for capital assets in the compilation of productive capital stock and productivity estimates for all industries and all years.

Renewable energy. Energy source that after exploitation can return to previous stock levels by natural processes of growth or replenishment, as long as the resource is managed adequately.

Resource rent. The revenue generated from a resource, less all costs incurred in its extraction.

System of Environmental-Economic Accounting (SEEA). System developed jointly by the United Nations, European Commission, International Monetary Fund, Organisation for Economic Co-operation and Development, and World Bank. SEEA is the international standard for measuring the links between the environment and the economy.

System of National Accounts (SNA). Developed jointly by the United Nations, European Commission, International Monetary Fund, Organisation for Economic Co-operation and Development, and World Bank. The SNA is the international standard for measuring economic statistics. For this report we used the 2008 version.

User cost of produced capital. Cost of using produced capital assets in a year. It accounts for the price change of the asset, an exogenous rate of return, depreciation, and the sum of all taxes-less-subsidies that the government levies on owning certain assets.  

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