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To What Extent Green Accounting Measure Sustainable Development

  • Arief Anshory Yusuf

    ()

    (Department of Economics, Padjadjaran University)

  • Armida Alisjahbana

    ()

    (Department of Economics, Padjadjaran University)

To what extent green accounting can properly measure sustainable development, not only depend on how well we maintain the link between the indicators and a clearlydefined concept of sustainable development but also on cautious interpretation of those indicators. Information from green accounting in general could be used to calculate adjusted, and better indicator of macroeconomic aggregates such as Green GDP, Genuine Savings, and Change in Wealth Per Capita. Green GDP, the most popular indicators, however, could not tell straightforwardly whether or not an economy is on sustainable path, neither could the growth of Green GDP. We show from a simple formal analysis of growth accounting that there are cases where interpretation of Green GDP growth could be misleading, especially when we are making comparison across economies (such as across province or districts) with differing resources dependence. Thus cautious interpretation of Green GDP (and its growth), is needed, and we propose that other indicators i.e. Genuine Saving and Change in Wealth Per Capita, which are easier to interpret, are better measures of sustainable development.

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File URL: http://lp3e.fe.unpad.ac.id/wopeds/200307.pdf
File Function: First version, 2003
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Paper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 200307.

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Length: 18 pages
Date of creation: Dec 2003
Date of revision: Dec 2003
Handle: RePEc:unp:wpaper:200307
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  1. Pearce, David W. & Atkinson, Giles D., 1993. "Capital theory and the measurement of sustainable development: an indicator of "weak" sustainability," Ecological Economics, Elsevier, vol. 8(2), pages 103-108, October.
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