Green accounting

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This page is still in construction. Full references to authors cited will be available on Monday.

Accounts environmentally adjusted has resulted from the necessity to modify the worldwide System of National Accounts (SNA) for calculating Gross Domestic Product (GDP), economic growth over time and other related aggregate measures in order to better reflect natural resources depletion and environmental degradation (O’Connor et al., 2001). That is why since 1980s, there were attempts to correct SNA to take full account of the depletion of natural resources and the deterioration of environmental functions. This led to accounts environmentally adjusted. This methodology can be complementary to I-O analysis and CGE since it can serve to greening I-O tables with the aim to use them for economic assessment of environmental policy options.

Accounts environmentally adjusted can be grouped under three main approaches even though these methods are often very closely interlinked and built upon each other (O’Connor et al., 2001):

a) National Accounts Matrix including Environmental Accounts (NAMEA) :

The basic principle of the NAMEA, also called Directly Expanded National Accounts, is to directly expand national accounts with environmental information in physical or monetary units, or both. This allows us tracing back the origin of the environmental pressures to industrial branches responsible for it as well as allocating pressures to final demand categories (e.g. to household consumption) using input–output analysis.

In the NAMEA, a link has been established between the national accounts and environmental statistics. By doing so, NAMEA reveals the interrelation between macro-indicators for the economy (net domestic product, net saving, external balance etc.) and the environment. The NAMEA can function as an instrument for all kinds of analysis. For example, the direct and indirect environmental effects of consumption or export of certain products can be demonstrated (CBS, 2006). An example is shown Tableau 3.