Green Accounting in Europe

Green Accounting in Europe

A Comparative Study, Volume 2

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Anil Markandya and Marialuisa Tamborra

Using spatially desegregated data on measures of pollution to derive economic damage estimates, the main purpose of the book is to gauge the environmental damage sustained as a result of economic activities and to offer an insight into how the information generated can be used in conjunction with conventional economic accounts. The first few chapters review recent developments in both green accounting and pathway analysis. The book goes on to evaluate the progress made in estimating dose response functions and valuing environmental damages. The authors discuss the methodology used for the estimation of damages caused by ambient air pollution and the cost of defensive expenditures. They also present the results of the analysis and draw important policy conclusions for environmental accounting, particularly in the EU.

Chapter 1: Introduction and Project Objectives

Anil Markandya and Marialuisa Tamborra

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


Anil Markandya and Marialuisa Tamborra THE CONTEXT As countries become richer, a heightened interest in the environment comes from two sources. Individuals have a greater concern for the quality of the ambient environment, as more pressing needs are satisfied. At the same time the pressures on that ambient environment increase, with a higher loading of pollution from transport, power, industry and household consumption. One way in which this increased awareness of environmental problems manifests itself is through the demand for better information on what is happening to the environment and what that means for us as citizens and human beings. It is not surprising therefore that there has been an explosion of work on measuring impacts in terms of the pressures on the ambient environment, the state of that environment and the responses of society to these pressures (Adriaanse, 1993). This work has been carried out almost exclusively in physical units, with little attention paid to the economic implications of the environmental changes. At the same time, it is clear that there is an economic dimension to the changes. The environment provides an economic function and it is at our peril that we ignore that function. But, in drawing up traditional measures of economic activity, such as Gross Domestic Product, that is precisely what we do. We do not take account of damages done to the stock of natural capital, nor of the losses of welfare that economic activities cause through increased pollution. In response to these concerns, a...