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On The Interpretation And Applicability Of A “Green National Product”

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  • Asbjørn Aaheim
  • Karine Nyborg

Abstract

Several economists have recently suggested that the national product should be adjusted for the value of environmental damages. In this paper we look at some of the difficulties one encounters when the correcting formulae derived from simple theoretical models are transferred to applied national accounting. In particular, the paper is concerned with the question of whether a corrected national income measure will actually provide relevant information for policy‐makers. It is shown that a “green national product” will be very difficult to interpret. In general, it may not give any indications of the necessity of imposing stronger environmental policy actions. Nor does it indicate the hypothetical state of the economy after a change in environmental efforts.

Suggested Citation

  • Asbjørn Aaheim & Karine Nyborg, 1995. "On The Interpretation And Applicability Of A “Green National Product”," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(1), pages 57-71, March.
    • Handle: RePEc:bla:revinw:v:41:y:1995:i:1:p:57-71
    DOI: 10.1111/j.1475-4991.1995.tb00093.x
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    Cited by:

    1. Peter ven de Ven & Anne Harrison & Barbara Fraumeni & Andre Vanoli, 2017. "The Future of the SNA in a Broad Information System Perspective," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 238-265, December.
    2. Huhtala, Anni & Samakovlis, Eva, 2003. "Green Accounting, Air Pollution and Health," Working Papers 82, National Institute of Economic Research.
    3. Huhtala, Anni & Toppinen, Anne & Boman, Mattias, 2003. "When the theory is not enough - valuation of forest resources with "efficiency" prices in practice," Journal of Forest Economics, Elsevier, vol. 9(3), pages 205-222.
    4. Almas Heshmati, 2018. "An empirical survey of the ramifications of a green economy," International Journal of Green Economics, Inderscience Enterprises Ltd, vol. 12(1), pages 53-85.
    5. Alfsen, Knut H. & Greaker, Mads, 2007. "From natural resources and environmental accounting to construction of indicators for sustainable development," Ecological Economics, Elsevier, vol. 61(4), pages 600-610, March.
    6. Eric Neumayer, 2000. "Resource Accounting in Measures of Unsustainability: Challenging the World Bank's Conclusions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(3), pages 257-278, March.
    7. Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.
    8. Hanley, Nick & Moffatt, Ian & Faichney, Robin & Wilson, Mike, 1999. "Measuring sustainability: A time series of alternative indicators for Scotland," Ecological Economics, Elsevier, vol. 28(1), pages 55-73, January.
    9. Samakovlis, Eva, 2008. "How are Green National Accounts Produced in Practice?," Working Papers 105, National Institute of Economic Research.

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