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On the interpretation of ‘green’ NNP measures as cost-benefit rules

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  • Per-Olov Johansson
  • Karl-Gustaf Löfgren

Abstract

In this paper we consider the possibility of using ‘green’ welfare change measures as the basis for cost-benefit analysis of new projects. Such green welfare change measures look very similar to what one would expect a cost-benefit analysis of the entire economy to look like. It is shown that although green welfare measures contain the shadow prices needed in the evaluation of a small new project, one must account for changes in these prices. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Per-Olov Johansson & Karl-Gustaf Löfgren, 1996. "On the interpretation of ‘green’ NNP measures as cost-benefit rules," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(3), pages 243-250, April.
    • Handle: RePEc:kap:enreec:v:7:y:1996:i:3:p:243-250
    DOI: 10.1007/BF00782147
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    References listed on IDEAS

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    1. LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April.
    2. Caputo, Michael R., 1990. "How to do comparative dynamics on the back of an envelope in optimal control theory," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 655-683, October.
    3. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    4. Vellinga, Nico & Withagen, Cees, 1996. "On the Concept of Green National Income," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 499-514, October.
    5. Hartwick, John M., 1991. "Degradation of environmental capital and national accounting procedures," European Economic Review, Elsevier, vol. 35(2-3), pages 642-649, April.
    6. repec:bla:scandj:v:88:y:1986:i:1:p:141-49 is not listed on IDEAS
    7. Johansson, Per-Olov & Lofgren, Karl-Gustaf, 1995. "Wealth from optimal health," Journal of Health Economics, Elsevier, vol. 14(1), pages 65-79, May.
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    Citations

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    Cited by:

    1. Harris, M., 2000. "Some Unpleasant Natural Resource Accounting Arithmetic: The Welfare Inconsitency of," Department of Economics - Working Papers Series 765, The University of Melbourne.
    2. Dasgupta, Partha, 2000. "Valuation and Evaluation: Measuring the Quality of Life and Evaluating Public Policy," RFF Working Paper Series dp-00-24, Resources for the Future.
    3. Li, Chuan-Zhong & Löfgren, Karl-Gustaf, 2002. "On the Choice of Metrics in Dynamic Welfare Analysis: Utility versus Money Measures," Umeå Economic Studies 590, Umeå University, Department of Economics.
    4. Dasgupta, Partha, 2000. "Valuation and Evaluation: Measuring the Quality of Life and Evaluating Policy," Discussion Papers 10560, Resources for the Future.
    5. Harris, Michael & Fraser, Iain, 2002. "Natural resource accounting in theory and practice: A critical assessment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(2), pages 1-54.
    6. Withagen, C. A. A. M., 1996. "Sustainability and investment rules," Economics Letters, Elsevier, vol. 53(1), pages 1-6, October.
    7. Dasgupta, Partha, 2000. "Valuation and evaluation: measuring the quality of life and evaluating policy," LSE Research Online Documents on Economics 6657, London School of Economics and Political Science, LSE Library.
    8. repec:bla:germec:v:9:y:2008:i::p:1-16 is not listed on IDEAS

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