The welfare economic theory of green national accounts

Partha Dasgupta

Research output: Contribution to journalArticlepeer-review

Abstract

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. © 2008 Springer Science+Business Media B.V.
Original languageEnglish
Pages (from-to)3-38
Number of pages35
JournalEnvironmental and Resource Economics
Volume42
Issue number1
DOIs
Publication statusPublished - Jan 2009

Keywords

  • Capital depreciation
  • Comprehensive wealth
  • Ecosystems
  • Income
  • Intergenerational well-being
  • Natural capital
  • Net national product
  • Population growth
  • Shadow prices
  • Sustainable development
  • Technological uncertainty
  • Wiener process

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