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Reconciling the Green Accounts

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  • Robert Cairns

Abstract

In an optimally managed economy, green nationalexpenditure is equal to the linearization of the Hamiltonian from theproblem of maximizing discounted social utility. Herein, we utilize theadjoint conditions to add to the basis for viewing green NNP as an index ofsocial utility under ideal conditions and to show the equality of netnational income and expenditure. The results apply even when returns toscale are increasing or decreasing. Unpriced, net environmental benefitsshould be incorporated into comprehensive NNP in much the same way as thedisutility of labor. Otherwise, current practices of the national accountscan be defended, including the treatment of capital gains. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Robert Cairns, 2003. "Reconciling the Green Accounts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(1), pages 51-63, May.
    • Handle: RePEc:kap:enreec:v:25:y:2003:i:1:p:51-63
    DOI: 10.1023/A:1023657029623
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    References listed on IDEAS

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    1. Cairns, Robert D., 2001. "Seeing the trees as a forest: what counts in green accounting," Ecological Economics, Elsevier, vol. 36(1), pages 61-69, January.
    2. Asheim, Geir B., 1996. "Capital gains and net national product in open economies," Journal of Public Economics, Elsevier, vol. 59(3), pages 419-434, March.
    3. John M. Hartwick, 2000. "National Accounting and Capital," Books, Edward Elgar Publishing, number 1885, March.
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    1. Cairns, Robert D., 2008. "Value and income," Ecological Economics, Elsevier, vol. 66(2-3), pages 417-424, June.
    2. Caparrós, Alejandro & Oviedo, José L. & Álvarez, Alejandro & Campos, Pablo, 2017. "Simulated exchange values and ecosystem accounting: Theory and application to free access recreation," Ecological Economics, Elsevier, vol. 139(C), pages 140-149.
    3. Matero, Jukka & Saastamoinen, Olli, 2007. "In search of marginal environmental valuations -- ecosystem services in Finnish forest accounting," Ecological Economics, Elsevier, vol. 61(1), pages 101-114, February.
    4. Doyen, L. & Martinet, V., 2012. "Maximin, viability and sustainability," Journal of Economic Dynamics and Control, Elsevier, vol. 36(9), pages 1414-1430.
    5. Alejandro Caparrós & José L. Oviedo & Alejandro Álvarez & Pablo Campos, 2015. "Simulated exchange values and ecosystem accounting," Working Papers 1512, Instituto de Políticas y Bienes Públicos (IPP), CSIC.
    6. Jose L. Oviedo & Pablo Campos & Alejandro Caparrós, 2010. "Simulated Exchange Value Method: Applying Green National Accounting to Forest Public Recreation," Working Papers 1016, Instituto de Políticas y Bienes Públicos (IPP), CSIC.

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