Introducing Natural and Environmental Capital into National Income Accounts

Abstract

The capital-theoritic framework provides logical guide to incorporate changes in natural and environmental capital into the National Income Accounts. It is shown that the real Net National Product can, in principle, be estimated by subtracting from convetional GNP, the depreciation of man-made, natural, and environmental capital valued at their respective accounting prices. Arriving at the accounting prices will not be easy, however, and multiple appoaches will need to be used for that purpose.