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National Income and the Environment

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  • Geoffrey Heal

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  • Bengt Kriström

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Abstract

In this chapter, we review the concept of national income and the economic theory of national income accounting. There are two building blocks - the ideas of Fisher, Lindahl, Hicks about income as an expenditure level that can be continued into the future, and the concept of income as a welfare measure that emerges from the welfare economics and general equilibrium of the 1950s and 1960s. The former have led to an extensive literature on the use of Hamiltonians or their first-order approximations as an income measure. After reviewing this body of theory and the connections between the concepts, we suggest extensions and then consider how various proposed green accounting systems match up to the theoretical desiderata. We also review a number of empirical applications. We devote considerable space to the United Nations' proposed System of Economic and Environmental Accounts, and to accounting reforms proposed by the statistical offices of various countries.

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Bibliographic Info

Paper provided by Swedish University of Agricultural Sciences, Department of Forest Economics in its series Working Paper Series with number 03/332.

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Length: 102p
Date of creation: Mar 2003
Date of revision:
Handle: RePEc:hhs:slufec:2003_332

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Postal: Department of Forest Economics, Swedish University of Agricultural Sciences, SE 901 83 Umeå, Sweden
Phone: 090-786 62 68
Fax: 090-786 60 73
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Web page: http://www.sekon.slu.se
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Cited by:
  1. Ahlroth, Sofia, 2000. "Correcting Net Domestic Product for Sulphur Dioxide and Nitrogen Oxide Emissions: Implementation of a Theoretical Model in Practice," Working Paper 73, National Institute of Economic Research.
  2. H. Spencer Banzhaf & James Boyd, 2012. "The Architecture and Measurement of an Ecosystem Services Index," Sustainability, MDPI, Open Access Journal, vol. 4(4), pages 430-461, March.
  3. Azqueta, Diego & Sotelsek, Daniel, 2007. "Valuing nature: From environmental impacts to natural capital," Ecological Economics, Elsevier, vol. 63(1), pages 22-30, June.
  4. Gret-Regamey, Adrienne & Kytzia, Susanne, 2007. "Integrating the valuation of ecosystem services into the Input-Output economics of an Alpine region," Ecological Economics, Elsevier, vol. 63(4), pages 786-798, September.
  5. Lucas Bretschger & Simone Valente, 2011. "International trade and net investment: theory and evidence," International Economics and Economic Policy, Springer, vol. 8(2), pages 197-224, June.
  6. Partha Dasgupta, 2009. "The Welfare Economic Theory of Green National Accounts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(1), pages 3-38, January.
  7. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271 Elsevier.
  8. Berger, Mark C. & Blomquist, Glenn C. & Sabirianova Peter, Klara, 2008. "Compensating differentials in emerging labor and housing markets: Estimates of quality of life in Russian cities," Journal of Urban Economics, Elsevier, vol. 63(1), pages 25-55, January.
  9. Lange, Glenn-Marie & Wright, Matthew, 2002. "Sustainable Development In Mineral Economies: The Example Of Botswana," Discussion Papers 18019, University of Pretoria, Center for Environmental Economics and Policy in Africa.
  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. Glenn-marie Lange, 2004. "Wealth, Natural Capital, and Sustainable Development: Contrasting Examples from Botswana and Namibia," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(3), pages 257-283, November.
  12. Arby, Muhammad Farooq, 2008. "Some Issues in the National Income Accounts of Pakistan (Rebasing, Quarterly and Provincial Accounts and Growth Accounting)," MPRA Paper 32048, University Library of Munich, Germany.
  13. Samakovlis, Eva, 2008. "How are Green National Accounts Produced in Practice?," Working Paper 105, National Institute of Economic Research.
  14. Heal, Geoffrey & Kristrom, Bengt, 2008. "A note on national income in a dynamic economy," Economics Letters, Elsevier, vol. 98(1), pages 2-8, January.

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