Environmentally Sustainable National Income: Indispensable Information for Attaining Environmental Sustainability

Environmental functions are defined as the possible uses of the non-human-made physical surroundings on which humanity is entirely dependent. Competing functions are by definition economic goods, indeed the most fundamental humanity disposes of. Environmental sustainability is defined as the dynamic equilibrium by which vital environmental functions remain available for future generations. Environmentally sustainable national income (eSNI) is defined as the maximum attainable production level by which vital environmental functions remain available for future generations. Thus the eSNI provides information about the distance between the current and a sustainable situation. In combination with the standard national income (NI), the eSNI indicates whether the part of the production that is not based on sustainable use of the environment is increasing or decreasing in the course of time. Calculation of the eSNI involves the use of environmental models and a static general economic equilibrium model. It is shown that asymmetric entries are obscuring what is happening with both environment and production and that there is no conflict between employment and safeguarding the environment.