National Accounts and Environmentally Sustainable National Income

Our planet is threatened by a mistaken confidence in erroneously calculated growth. The term “economic growth” can only mean an increase in human welfare, but it is often wrongly identified with production growth that may in fact be destructive to the environment. Thus, while the measures of standard National Income (NI) or Gross Domestic Product (GDP) are useful for many purposes, they are inadequate in guiding environmental policy making. This book develops the corrective concept of an environmentally Sustainable National Income (eSNI). eSNI is defined as the maximally attainable level of production, using the technology of the year under review, whereby the vital environmental functions (possible uses) of the not-human-made physical surroundings remain available for future generations. In order to accurately judge environmental sustainability, the authors show, NI and eSNI must be addressed jointly. Drawing on data from the Netherlands from 1990 to 2015, the authors demonstrate the effectiveness of eSNI and argue that national statistical bureaus around the world should provide this measure to their own policymakers, so that policymaking across the globe might be informed by sound information about both national economies and the global environment.