Macroeconomics and the Environment

Macroeconomics and the Environment

Essays on Green Accounting

Advances in Ecological Economics series

Salah El Serafy

Though scientists and environmentalists have long expressed concern over the rapid deterioration of the global environment, economists have largely failed to recognize the issue’s relevance to their field. Salah El Serafy argues for an increased focus on the economic aspects of environmental degradation, calling for a fundamental shift in how economists measure and discuss national income.

Chapter 10: Disagreements and misunderstandings

Salah El Serafy

Subjects: economics and finance, environmental economics, international accounting, environment, ecological economics, environmental economics


This chapter continues the elucidation of the user-cost method for greening the national accounts, but approaches the topic from the standpoint of its critics. The chapter garners a number of disagreements and tries to address them. The instances cited I believe cover the whole range of adverse views. It will be seen that the claimed faults are in many respects repetitive and interdependent. Attempting to address them here should, however, throw greater light on the user-cost method and hopefully also confirm my belief that had this method been properly understood from the beginning progress towards a green accounting consensus might have developed faster. Again I am confining my coverage to monetary accounting, and overlooking physical accounting, which is obviously necessary in any case as a preliminary step. Physical accounting has been pursued with advantage in many situations and without much controversy. For presenting my arguments I have had two alternatives. One was a thematic approach, grouping censure by category of fault whether real or imagined. The other option was to identify critics, whether individuals or institutional, by name. I chose the latter, partly on grounds of convenience, but also to reveal some interesting interconnections between dissenters.

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