Sustainable Development and Green National Accounts
From Santa Fe Institute Events Wiki
|Summer School on Global Sustainability|
This paper takes a critical look at the literature on green national accounts. The problem studied is to ﬁnd a linear index of economic variables that responds to perturbations in the same direction as social well-being. The thesis of a large literature, that net national product (which is a ﬂow) is that index in closed economies, is shown in some interpretations to be simply false and in others to suffer from deep estimation problems. It is argued that capital depreciation using shadow prices should certainly be included in national accounts, but that the right welfare index is a comprehensive measure of wealth, deﬁned as the shadow value of an economy’s stock of all capital assets. It is shown that comprehensive wealth is usable as a criterion for policy evaluation as well as for determining sustainable economic development.
Please review the following paper before the lecture: