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 Greening the National Accounts: Approach and Policy Use
Focus: ICT for MDGs
Description: Green national accounts capture the interaction between environment and economy. The objective is to assess the long-term sustainability can be operationalized in terms of produced and non-produced (natural) capital maintenance. Integrated environmental and economic accounts expand therefore the asset boundary of the conventional national accounts. The integrative power of such accounting is based on pricing 'priceless' environmental phenomena. Monetary valuation is thus controversial, and alternative physical accounting is also discussed. The main policy applications are (a) the use of environmentally adjusted 'eco-nomic' variables in macroeconomic policy and (b) the setting of market instruments of cost internalization according to the environmental cost generated by economic agents.
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