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Correcting Net Domestic Product for Sulphur Dioxide and Nitrogen Oxide Emissions: Implementation of a Theoretical Model in Practice

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  • Ahlroth, Sofia

    (National Institute of Economic Research)

Abstract

The theoretical and the practical studies in the field of environmental accounting are often two separate lines of work. In this study, we develop an optimal control theory model for adjusting NDP for the effects of SO2 and NOx emissions, and subsequently insert empirically estimated values. The model includes correction entries for the effects on welfare, real capital, health and the quality and quantity of renewable natural resources. In the empirical valuation study, production losses were estimated with dose-response functions. Recreational and other welfare values were estimated by the contingent valuation (CV) method. Effects on capital depreciation are also included. For comparison, abatement costs and environmental protection expenditures for reducing sulfur and nitrogen emissions were estimated. The theoretical model was then utilized to calculate the adjustment to NDP in a consistent manner. The estimated damage value of sulfur is twice as large as the Swedish sulfur tax if all costs are taken into account.

Suggested Citation

  • Ahlroth, Sofia, 2000. "Correcting Net Domestic Product for Sulphur Dioxide and Nitrogen Oxide Emissions: Implementation of a Theoretical Model in Practice," Working Papers 73, National Institute of Economic Research.
    • Handle: RePEc:hhs:nierwp:0073
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    References listed on IDEAS

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    1. Heal, Geoffrey & Kristrom, Bengt, 2005. "National income and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 22, pages 1147-1217, Elsevier.
    2. Kirk Hamilton, 1996. "Pollution And Pollution Abatement In The National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(1), pages 13-33, March.
    3. Asheim, Geir B, 1994. " Net National Product as an Indicator of Sustainability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 257-265.
    4. Hartwick, John M., 1990. "Natural resources, national accounting and economic depreciation," Journal of Public Economics, Elsevier, vol. 43(3), pages 291-304, December.
    5. Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-149.
    6. repec:hhs:slufec:2003-332 is not listed on IDEAS
    7. Karl-Göran Mäler, 1991. "National accounts and environmental resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 1(1), pages 1-15, March.
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    Cited by:

    1. Li, Chuan-Zhong & Isacsson, Gunnar, 2009. "Valuing urban accessibility and air quality in Sweden: A regional welfare analysis," Working Paper Series 2009:2, Uppsala University, Department of Economics.
    2. Huhtala, Anni & Samakovlis, Eva, 2003. "Green Accounting, Air Pollution and Health," Working Papers 82, National Institute of Economic Research.
    3. Chuan-Zhong Li & Gunnar Isacsson, 2012. "Valuing urban accessibility and air quality in Sweden," Empirical Economics, Springer, vol. 42(3), pages 881-898, June.
    4. Gren, Ing-Marie & Isacs, Lina, 2009. "Ecosystem services and regional development: An application to Sweden," Ecological Economics, Elsevier, vol. 68(10), pages 2549-2559, August.

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