The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Green National Accounting

  • Sjak Smulders
Reference work entry


Extending conventional national product measures, green national accounting provides better indicators of economic welfare and of the sustainability of welfare levels. The main theoretical result shows that in an undistorted economy net national product is proportional to welfare, provided some rather stringent conditions are met. With appropriately used shadow prices, the welfare effects of externalities and world market changes can be accounted for and sustainable income – the hypothetical level of consumption that can be sustained into the future – can be calculated. Practical approaches have been proposed to adjust conventional national income figures roughly in the spirit of the theoretical results.


Air quality Climate change Contingent valuation Ecological footprint Education Environment Genuine savings Green national accounting Green net investment Green net national product Hedonic prices Household work Index of sustainable economic welfare Inequality of income Intergenerational income distribution Interpersonal utility comparisons Land use Leisure Maximin preferences National accounting Natural resources Non-renewable resources Opportunity cost Other- regarding preferences Pollution Representative agent Resource depletion Shadow prices Social welfare function Sustainability Sustainability accounting Sustainability gap Technical change Travel costs Utilitarian preferences Utility aggregation Value of time Wealth 

JEL Classifications

O47 Q01 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Sjak Smulders
    • 1
  1. 1.