National Income and the Environment

100 Pages Posted: 28 Aug 2002

See all articles by Geoffrey M. Heal

Geoffrey M. Heal

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Bengt Kriström

SLU- Centre for Environmental and Resource Economics (CERE)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2001

Abstract

In the paper we review the concept of national income and the economic theory of national income accounting. There are two building blocks - the ideas of Fisher, Lindahl, Hicks about income as an expenditure level that can be continued into the future, and the concept of income as a welfare measure that emerges from the welfare economics and general equilibrium of the 1950s and 1960s. The former have led to an extensive literature on the use of Hamiltonians or their first order approximations as an income measure. After reviewing this body of theory and the connections between the concepts, we suggest extensions and then consider how various proposed green accounting systems match up to the theoretical desiderata. We also review a number of empirical applications. We devote considerable space to the United Nations' proposed System of Economic and Environmental Accounts, and to accounting reforms proposed by the statistical offices of various countries.

Keywords: National income, green accounting, Hamiltonian, welfare economics, Hicksian income, environmental accounting

JEL Classification: D60, D63, D90, Q01

Suggested Citation

Heal, Geoffrey M. and Kriström, Bengt, National Income and the Environment (March 2001). Available at SSRN: https://ssrn.com/abstract=279112 or http://dx.doi.org/10.2139/ssrn.279112

Geoffrey M. Heal (Contact Author)

Columbia Business School - Finance and Economics ( email )

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HOME PAGE: http://www.gsb.columbia.edu/faculty/gheal/

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Bengt Kriström

SLU- Centre for Environmental and Resource Economics (CERE) ( email )

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Sweden
+46-(0)90-7865219 (Phone)

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