Economic Growth and Valuation of the Environment

Economic Growth and Valuation of the Environment

A Debate

Edited by Ekko C. Van Ierland, Jan van der Straaten and Herman Vollebergh

The debate on the valuation of nature and the environment, sustainable national income and economic growth is one of prime importance in environmental economics. Economic Growth and Valuation of the Environment deals with the fundamental approaches to calculating sustainable national income and their implications for the valuation of the environment.

Chapter 11: Alternative calculations of a sustainable national income for the Netherlands according to Hueting

Harmen Verbruggen, Rob B. Dellink, Reyer Gerlagh and Huib M.A. Jansen

Subjects: economics and finance, environmental economics, environment, environmental economics


Harmen Verbruggen, Rob B. Dellink, Reyer Gerlagh, Marjan W. Hofkes and Huib M.A. Jansen* 1 INTRODUCTION It is well understood that national income is an inadequate indicator of social welfare. Dependant on the angle, national income is either incomplete or misleading, or both. Hence, there are quite a number of attempts to improve and/or supplement this central statistic of national accounts. One of these attempts is extensively dealt with in this contribution, namely the correction of national income for environmental losses. To be more precise, the aim of this study is to investigate the feasibility of calculating a national income for the Netherlands that takes the environment as a welfare-generating economic good into account, according to the methodology so strongly advocated by Hueting. This methodology would result in a so-called sustainable national income (SNI). Here, Hueting’s SNI methodology is briefly summarized, but not discussed. However, in operationalizing this methodology, an empirical and integrated environment-economy model has to be used. This intermediate step makes the operationalization certainly not a simple exercise. A number of choices have to be made and additional assumptions have to be formulated to make the model run and come up with credible results. Of course, these choices and additional assumptions can be questioned. For that very reason, a number of alternative calculations have been performed to gather insight into the impact of different choices and assumptions, both with * The research that is reported here is commissioned jointly by the Ministry of Economic Affairs and...

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