Salient Institutional Issues
New Horizons in Environmental Economics series
Edited by Albert Breton, Giorgio Brosio, Silvana Dalmazzone and Giovanna Garrone
Chapter 10: Environmental Accounting at Different Levels of Government: The State of the Art
Silvana Dalmazzone and Alessandra La Notte 1 INTRODUCTION Although, depending on the context, the expression ‘environmental accounting’ is used with a few slightly different meanings, a definition general enough to encompass them all could be that of ‘a structure aimed at collecting, organizing and managing environmental data, expressed both in physical and monetary terms’. The intent to develop environmental accounting schemes stems from the well-known weaknesses of the traditional Systems of National Accounts (SNA): developed half a century ago, at a time when concern about the environment was not high on the agenda, SNAs do not account for the quantitative depreciation of natural assets, the qualitative degradation of environmental media and most kinds of environmental expenditures. The economic and welfare consequences associated with the depletion of natural capital have, however, reached a scale such that ignoring them leads to a significantly misleading description of a socioeconomic system’s performance. The first attempts to make up for these weaknesses were represented by academic research aimed at introducing adjustments in the calculation of GDP, including natural resource depletion, defensive expenditures and degradation, leading to the derivation of aggregates such as an environmentally adjusted gross domestic product (‘green GDP’), or environmentally adjusted net saving (‘genuine saving’). The use of money as a common numerator to quantify all environmental impacts and compare their value with that of the economic activities that generate them, however, proved to involve several limitations, which led to a decline of this line of enquiry and to a turn towards the...
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