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The cost of natural capital consumption: Accounting for a sustainable world economy

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  • Bartelmus, Peter

Abstract

The System for integrated Environmental and Economic Accounting (SEEA) has been criticized in this journal for ignoring the benefits of ecosystem services for human well-being. This paper argues that extended national accounts should not attempt measuring economic welfare. Rather, they could and should assess the environmental sustainability of economic activity as the cost of natural capital consumption. The global application of SEEA concepts and methods demonstrates the feasibility of international green accounting. For the world economy, sustainability costs run to about 3trillion US$ or 6% of world GDP. Large variations at national and regional levels suggest that conventional economic indicators may significantly overstate economic progress in some parts of the world. Data gaps and lack of data comparability affect these first estimates. National and international statistical services should be more aggressive in greening the national accounts. More prudent and more sustainable economic policies might be the result.

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  • Bartelmus, Peter, 2009. "The cost of natural capital consumption: Accounting for a sustainable world economy," Ecological Economics, Elsevier, vol. 68(6), pages 1850-1857, April.
    • Handle: RePEc:eee:ecolec:v:68:y:2009:i:6:p:1850-1857
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    3. Jean-Sauveur Ay & Jean-Marc Brayer & Jean Cavailhès & Pierre Curmi & Mohamed Hilal & Marjorie Ubertosi, 2012. "La valeur des attributs naturels des terres agricoles de Côte-d'Or," INRA UMR CESAER Working Papers 2012/1, INRA UMR CESAER, Centre d'’Economie et Sociologie appliquées à l'’Agriculture et aux Espaces Ruraux.
    4. Muller, Nicholas Z., 2019. "The derivation of discount rates with an augmented measure of income," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 87-101.
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    6. Aniruddh Mohan & Nicholas Z. Muller & Akshay Thyagarajan & Randall V. Martin & Melanie S. Hammer & Aaron van Donkelaar, 2020. "The Growth of Nations Revisited: Global Environmental Accounting from 1998 to 2018," NBER Working Papers 27398, National Bureau of Economic Research, Inc.
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    8. Fleming, Aysha & O'Grady, Anthony P. & Stitzlein, Cara & Ogilvy, Sue & Mendham, Daniel & Harrison, Matthew T., 2022. "Improving acceptance of natural capital accounting in land use decision making: Barriers and opportunities," Ecological Economics, Elsevier, vol. 200(C).
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    10. Comte, Adrien & Sylvie Campagne, C. & Lange, Sabine & Bruzón, Adrián García & Hein, Lars & Santos-Martín, Fernando & Levrel, Harold, 2022. "Ecosystem accounting: Past scientific developments and future challenges," Ecosystem Services, Elsevier, vol. 58(C).
    11. Taro Ohdoko & Kentaro Yoshida, 2012. "Public preferences for forest ecosystem management in Japan with emphasis on species diversity," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(2), pages 147-169, April.
    12. Jerry Mauri & Yingli Huang & Jun Harbi & Nathan James Roberts, 2022. "Monetary Valuation of Protected Wild Animal Species as a Contingent Assessment in North Sulawesi, Indonesia," Sustainability, MDPI, vol. 14(17), pages 1-17, August.
    13. Zhang, Xiaohong & Wu, Liqian & Zhang, Rong & Deng, Shihuai & Zhang, Yanzong & Wu, Jun & Li, Yuanwei & Lin, Lili & Li, Li & Wang, Yinjun & Wang, Lilin, 2013. "Evaluating the relationships among economic growth, energy consumption, air emissions and air environmental protection investment in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 259-270.
    14. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju, 2022. "The dimension of green economy: Culture viewpoint," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 122-138.
    15. Levrel, Harold & Jacob, Céline & Bailly, Denis & Charles, Mahe & Guyader, Olivier & Aoubid, Schéhérazade & Bas, Adeline & Cujus, Alexia & Frésard, Marjolaine & Girard, Sophie & Hay, Julien & Laurans, , 2014. "The maintenance costs of marine natural capital: A case study from the initial assessment of the Marine Strategy Framework Directive in France," Marine Policy, Elsevier, vol. 49(C), pages 37-47.
    16. Nicholas Z. Muller, 2014. "Toward the Measurement of Net Economic Welfare: Air Pollution Damage in the US National Accounts–2002, 2005, 2008," NBER Chapters, in: Measuring Economic Sustainability and Progress, pages 429-459, National Bureau of Economic Research, Inc.
    17. Lai, Tin-Yu & Salminen, Jani & Jäppinen, Jukka-Pekka & Koljonen, Saija & Mononen, Laura & Nieminen, Emmi & Vihervaara, Petteri & Oinonen, Soile, 2018. "Bridging the gap between ecosystem service indicators and ecosystem accounting in Finland," Ecological Modelling, Elsevier, vol. 377(C), pages 51-65.
    18. Johnson Kakeu, 2017. "Environmentally conscious investors and portfolio choice decisions," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 7(4), pages 360-378, October.

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