Handbook of environmental accounting

Abstract

The theory and practice of environmental accounting encompass measuring welfare in dynamic economies, establishing cost-benefit rules for welfare changes, and defining principles for sustainability. Theoretical foundations utilize concepts like comprehensive net national product (NNP) and the Hamiltonian as welfare indicators, while also addressing complexities introduced by market imperfections, non-stationary technology, behavioral biases such as hyperbolic discounting, and endogenous risks like health impacts. Practical aspects include the transformation of utility-based measures into money metrics, the production of green national accounts, and the integration of public sector activities involving distortionary taxation and public goods. The framework is applied to contemporary challenges including climate sensitivity and its economic implications, the design of sustainable consumption programs under population growth and global warming, and the utility of genuine saving as a sustainability measure. The relationship between abstract welfare measures and operational indicators of sustainable development is critically examined across diverse economic settings. – AI-generated abstract.