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Accounting Price of an Exhaustible Resource: A Comment

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  • Taoyuan Wei

Abstract

In a paper titled “Wealth Accounting, Exhaustible Resources and Social Welfare”, Hamilton and Ruta (Environ Resour Econ 42(1):53–64, 2009 ) derived accounting price for an exhaustible resource in Eq. (18), in the so-called “El Serafy economy” (El Serafy in Environmental accounting for sustainable development. The World Bank, Washington, 1989 ). However, the result is not plausible since they improperly replace constant extraction in the value of the resource stock (Eq. 17) with current resource stock divided by reserve life in their derivation. In the short comment, I show that the accounting price should be the same as the unit “user cost” defined by El Serafy (Environmental accounting for sustainable development. The World Bank, Washington, 1989 ). Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Taoyuan Wei, 2015. "Accounting Price of an Exhaustible Resource: A Comment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(4), pages 579-581, April.
    • Handle: RePEc:kap:enreec:v:60:y:2015:i:4:p:579-581
    DOI: 10.1007/s10640-014-9780-1
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    References listed on IDEAS

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    1. Kirk Hamilton & Giles Atkinson, 2013. "Resource Discoveries, Learning and National Income Accounting," GRI Working Papers 117, Grantham Research Institute on Climate Change and the Environment.
    2. Kirk Hamilton & Giovanni Ruta, 2009. "Wealth Accounting, Exhaustible Resources and Social Welfare," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(1), pages 53-64, January.
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    Cited by:

    1. Kirk Hamilton & Giovanni Ruta, 2017. "Accounting Price of an Exhaustible Resource: Response and Extensions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 527-536, November.
    2. Kirk Hamilton, 2016. "Measuring Sustainability in the UN System of Environmental-Economic Accounting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(1), pages 25-36, May.
    3. Edward B. Barbier & Joanne C. Burgess, 2019. "Scarcity and Safe Operating Spaces: The Example of Natural Forests," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1077-1099, November.

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    More about this item

    Keywords

    Environmental accounting; Exhaustible resources; Genuine saving; Social welfare; Q01; Q03;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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