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Progress along the path: evolving issues in the measurement of genuine saving

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  • Giles Atkinson

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  • Kirk Hamilton
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    Abstract

    More than 10 years since a practical linkage between sustainable development and a measure of national wealth—expanded to include natural and environmental resources—was first posited, the empirical estimation of adjusted net savings, dubbed ‘genuine’ saving, has evolved considerably. In this paper we take stock of both progress achieved and the challenges that remain. We begin by recalling the key points made in Pearce and Atkinson (1993, Ecol Econ 8, 103), which presented the first cross-country estimates of savings rates adjusted to reflect depletion and degradation of the environment. We then briefly summarise the evolution of the theoretical argument linking savings and sustainability. However, the main focus of this paper is an aspect that concerned David Pearce greatly, namely the evolution of the measurement of genuine savings. We identify and consider the empirical evidence with regard to two particular measurement issues: the valuation of exhaustible resources and environmental degradation. Common to the both issues are concerns about measuring changes in national wealth in real world economies. Copyright Springer Science+Business Media, Inc. 2007

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    File URL: http://hdl.handle.net/10.1007/s10640-007-9114-7
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    Bibliographic Info

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 37 (2007)
    Issue (Month): 1 (May)
    Pages: 43-61

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    Handle: RePEc:kap:enreec:v:37:y:2007:i:1:p:43-61

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    Web page: http://www.springerlink.com/link.asp?id=100263

    Related research

    Keywords: Genuine saving; Sustainability; Subsoil assets; User cost; Environmental degradation; Q01; Q32; Q53; Q56;

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Kirk Hamilton & Cees Withagen, 2007. "Savings growth and the path of utility," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 703-713, May.
    2. Asheim, Geir B. & Weitzman, Martin L., 2001. "Does NNP growth indicate welfare improvement?," Economics Letters, Elsevier, vol. 73(2), pages 233-239, November.
    3. M. L. Weitzman, 1974. "On the Welfare Significance of National Product in Dynamic Economy," Working papers 125, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Thomas Eichner & Rüdiger Pethig, 2007. "Harvesting in an integrated general equilibrium model," Volkswirtschaftliche Diskussionsbeiträge 127-07, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    5. Hamilton, Kirk & Atkinson, Giles, 1996. "Air pollution and green accounts," Energy Policy, Elsevier, vol. 24(7), pages 675-684, July.
    6. Karl-Göran Mäler, 1991. "National accounts and environmental resources," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(1), pages 1-15, March.
    7. World Bank, 2005. "World Development Indicators 2005," World Bank Publications, The World Bank, number 12426, October.
    8. Hamilton, Kirk, 1994. "Green adjustments to GDP," Resources Policy, Elsevier, vol. 20(3), pages 155-168, September.
    9. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December.
    10. John Pezzey & Nick Hanley & Karen Turner & Dugald Tinch, 2003. "Augmented Sustainability Measures for Scotland," Working Papers 2003_11, Business School - Economics, University of Glasgow.
    11. Stephen Smith & Joseph Swierzbinski, 2007. "Assessing the performance of the UK Emissions Trading Scheme," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 131-158, May.
    12. Ferreira, Susana & Vincent, Jeffrey R, 2005. "Genuine Savings: Leading Indicator of Sustainable Development?," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 737-54, April.
    13. Dasgupta, Partha & M Ler, Karl-G Ran, 2000. "Net national product, wealth, and social well-being," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 69-93, February.
    14. Davis, Graham A. & Moore, David J., 2000. "Valuing mineral stocks and depletion in green national income accounts," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 109-127, February.
    15. Hamilton, Kirk & Clemens, Michael, 1999. "Genuine Savings Rates in Developing Countries," World Bank Economic Review, World Bank Group, vol. 13(2), pages 333-56, May.
    16. Kirk Hamilton & John Hartwick, 2005. "Investing exhaustible resource rents and the path of consumption," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 615-621, May.
    17. Vincent, Jeffrey R., 1997. "Resource depletion and economic sustainability in Malaysia," Environment and Development Economics, Cambridge University Press, vol. 2(01), pages 19-37, February.
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    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Environmental and Natural Resource Economics > Environmental Economics > Environmental accounting
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    Cited by:
    1. Ollivier, TO, 2009. "The usefulness of aggregate sustainability indicators for policy making: What do they say for Madagascar?," MPRA Paper 16607, University Library of Munich, Germany.
    2. Geraldine THIRY & Isabelle CASSIERS, 2010. "Alternative Indicators to GDP: Values behind Numbers. Adjusted Net Savings in Question," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2010018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Shmelev, Stanislav E., 2011. "Dynamic sustainability assessment: The case of Russia in the period of transition (1985-2008)," Ecological Economics, Elsevier, vol. 70(11), pages 2039-2049, September.
    4. repec:laf:wpaper:201201 is not listed on IDEAS
    5. Ollivier, Timothée & Giraud, Pierre-Noël, 2011. "Assessing sustainability, a comprehensive wealth accounting prospect: An application to Mozambique," Ecological Economics, Elsevier, vol. 70(3), pages 503-512, January.
    6. Gnègnè, Yacouba, 2009. "Adjusted net saving and welfare change," Ecological Economics, Elsevier, vol. 68(4), pages 1127-1139, February.
    7. Chuan-Zhong Li & Karl-Gustaf Löfgren, 2012. "Genuine saving under stochastic growth," Letters in Spatial and Resource Sciences, Springer, vol. 5(3), pages 167-174, October.
    8. Jean-Philippe Barde, 2007. "Harnessing the political economy of environmental policy: David Pearce’s contribution to OECD," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 33-42, May.
    9. Aparna Sawhney, . "Environmental Sustainability and the Account of Genuine Wealth in India," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 10-03, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    10. Gren, Ing-Marie & Isacs, Lina, 2009. "Ecosystem services and regional development: An application to Sweden," Ecological Economics, Elsevier, vol. 68(10), pages 2549-2559, August.
    11. Giuseppe Munda, 2012. "Beyond GDP: Methodological and measurement issues in redefining “wealth”," UHE Working papers 2012_09, Universitat Autònoma de Barcelona, Departament d'Economia i Història Econòmica, Unitat d'Història Econòmica.
    12. Taoyuan Wei, 2012. "Capital Gains and Income Arising from Nonrenewable Resources," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 52(2), pages 293-300, June.
    13. Louis Dupuy, 2012. "International Trade and Sustainability : A survey," Working Papers hal-00701426, HAL.
    14. Kumar, Surender, 2013. "Comprehensive wealth and sustainable development in India," MPRA Paper 43809, University Library of Munich, Germany.
    15. Lázaro-Touza, Lara & Atkinson, Giles, 2013. "Nature, roads or hospitals? An empirical evaluation of ‘sustainable development preferences’," Ecological Economics, Elsevier, vol. 95(C), pages 63-72.
    16. Kirk Hamilton & Giovanni Ruta, 2009. "Wealth Accounting, Exhaustible Resources and Social Welfare," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(1), pages 53-64, January.
    17. Ferreira, Susana & Moro, Mirko, 2010. "Constructing Genuine Savings Indicators for Ireland, 1995-2005," Stirling Economics Discussion Papers 2010-10, University of Stirling, Division of Economics.

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