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National income and the environment

In: Handbook of Environmental Economics

Author

Listed:
  • Heal, Geoffrey
  • Kristrom, Bengt

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.

Suggested Citation

  • Heal, Geoffrey & Kristrom, Bengt, 2005. "National income and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 22, pages 1147-1217, Elsevier.
    • Handle: RePEc:eee:envchp:3-22
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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 Papers 73, National Institute of Economic Research.
    2. Matero, Jukka & Saastamoinen, Olli, 2007. "In search of marginal environmental valuations -- ecosystem services in Finnish forest accounting," Ecological Economics, Elsevier, vol. 61(1), pages 101-114, February.
    3. H. Spencer Banzhaf & James Boyd, 2012. "The Architecture and Measurement of an Ecosystem Services Index," Sustainability, MDPI, Open Access Journal, vol. 4(4), pages 1-32, March.
    4. 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.
    5. Alejandro Caparrós & José L. Oviedo & Alejandro Álvarez & Pablo Campos, 2015. "Simulated exchange values and ecosystem accounting," Working Papers 1512, Instituto de Políticas y Bienes Públicos (IPP), CSIC.
    6. 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.
    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. 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.
    9. Azqueta, Diego & Sotelsek, Daniel, 2007. "Valuing nature: From environmental impacts to natural capital," Ecological Economics, Elsevier, vol. 63(1), pages 22-30, June.
    10. Caparrós, Alejandro & Oviedo, José L. & Álvarez, Alejandro & Campos, Pablo, 2017. "Simulated exchange values and ecosystem accounting: Theory and application to free access recreation," Ecological Economics, Elsevier, vol. 139(C), pages 140-149.
    11. 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.
    12. 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.
    13. Heal, Geoffrey, 2007. "Environmental accounting for ecosystems," Ecological Economics, Elsevier, vol. 61(4), pages 693-694, March.
    14. 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.
    15. Glenn-marie Lange, 2004. "Wealth, Natural Capital, and Sustainable Development: Contrasting Examples from Botswana and Namibia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 257-283, November.
    16. Kabir, Mahfuz & Salim, Ruhul, 2019. "Valuation of subsoil minerals in Bangladesh: An application of the system of environmental-economic accounting," Resources Policy, Elsevier, vol. 62(C), pages 193-204.
    17. Goio, Ilaria & Gios, Geremia & Pollini, Claudio, 2008. "The development of forest accounting in the province of Trento (Italy)," Journal of Forest Economics, Elsevier, vol. 14(3), pages 177-196, June.
    18. Partha Dasgupta, 2009. "The Welfare Economic Theory of Green National Accounts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(1), pages 3-38, January.
    19. 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.
    20. Fleurbaey, Marc, 2015. "On sustainability and social welfare," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 34-53.
    21. Mahfuz Kabir, 2017. "Valuation of Subsoil Minerals: Application of SEEA for Bangladesh," Working Papers id:11919, eSocialSciences.
    22. Samakovlis, Eva, 2008. "How are Green National Accounts Produced in Practice?," Working Papers 105, National Institute of Economic Research.
    23. Heal, Geoffrey & Kristrom, Bengt, 2008. "A note on national income in a dynamic economy," Economics Letters, Elsevier, vol. 98(1), pages 2-8, January.

    More about this item

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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