Discussion
Questions: What are satellite accounts? What are the main advantages of
using satellite accounts instead of measures such as Adjusted Net National
Product or the Index of Sustainable Economic Welfare?
Discuss
the difference between Gross National Product, Net National Product, and
Adjusted Net National Product. Include a formula showing the relationship
between these measures.
Glossary
Chapter 8: Environmental and
Natural Resource Accounting
A
adjusted net national product (NNP*)/net domestic product (NDP*) the
value obtained by subtracting both humanmade and natural resource depreciation
from gross national product or gross domestic product.
C
critical natural capital elements of natural capital for which no good
human-made substitutes exist, such as basic water supplies and breathable air.
cumulative pollutant(s)/pollution pollutants that do not significantly
dissipate or degrade over time.
D
defensive expenditures expenditures made to clean up pollution or repair
or compensate for environmental damage.
E
ecological value the value of ecosystem resources and services not
expressed in markets.
end-of-year stocks the stock of natural resources, such as timber and
oil, at the end of a year; used as a supplement to national income accounting.
G
genuine saving (S*) a measure that estimates the amount of national
income being saved, taking into account natural-resource depletion, net foreign
borrowing, and net additions to capital stock.
global pollution/pollutant(s) pollutants that can have global impact
such as carbon dioxide and chlorofluorocarbons (CFCs).
green accounting approaches to national income accounting that attempt
to incorporate the depletion of natural capital and other environmental
benefits and costs.
H
Human Development Index (HDI) a national income accounting technique,
developed by the United Nations Development Programme, that combines GDP with
data on life expectancy, literacy, and school enrollment to obtain an HDI
score.
I
Index of Sustainable Economic Welfare (ISEW) a national income
accounting measure that subtracts defensive expenditures from output and
accounts for natural resource depletion, pollution damages, income inequality,
and nonmarketed services.
N
natural capital depreciation a deduction in national accounting for loss
of natural capital, such as a reduction in the supply of timber, wildlife
habitat, or mineral resources.
net foreign borrowing (NFB) the amount borrowed by a country less the
amount lent to other countries; gross investment is adjusted by NFB and
depreciation to determine net domestic investment or savings.
net investment the process of adding to productive capital over time,
calculated by subtracting depreciation from gross, or total, investment.
net national product (NNP)/net domestic product (NDP) the value obtained
by subtracting the depreciation of humanmade capital from gross national
product or gross domestic product.
net receipts returns from the sale of a resource, equal to revenues
minus production costs.
P
productivity loss estimates an estimate of the reduction in the
productive capacity of renewable natural resources, such as soil; used to
supplement national income accounting.
R
replacement cost an approach to measuring environmental damages that
estimates the costs necessary to restore or replace the resource, such as applying
fertilizer to restore soil fertility.
S
satellite accounts accounts that estimate the supply of natural capital
in physical rather than monetary terms; used to supplement traditional national
income accounting.
strong sustainability the view that natural and humanmade capital are
generally not substitutable and, therefore, natural capital levels should be
maintained.
substitutability (of natural and manufactured capital) the ability of
humanmade capital to compensate for the depletion of some types of natural
capital, such as the ability of fertilizer to compensate for the loss of soil
fertility.
T
transboundary pollution pollution carried beyond the borders of a
specific region or country and affecting those outside the region.
true income an adjusted measure of income obtained by subtracting that portion of
total income that would have to be invested at long-term rates to guarantee an
indefinitely continued flow of income at the same level.
U
user cost(s) opportunity costs associated with the loss of future
potential uses of a resource, resulting from consumption of the resource in the
present.
W
weak sustainability the view that natural capital depletion is justified
as long as it is compensated for with increases in humanmade capital; assumes
that humanmade capital can substitute for most types of natural capital.