Reconciling the Green Accounts

Robert Cairns

Environmental & Resource Economics, 2003, vol. 25, issue 1, 63 pages

Abstract: In an optimally managed economy, green nationalexpenditure is equal to the linearization of the Hamiltonian from theproblem of maximizing discounted social utility. Herein, we utilize theadjoint conditions to add to the basis for viewing green NNP as an index ofsocial utility under ideal conditions and to show the equality of netnational income and expenditure. The results apply even when returns toscale are increasing or decreasing. Unpriced, net environmental benefitsshould be incorporated into comprehensive NNP in much the same way as thedisutility of labor. Otherwise, current practices of the national accountscan be defended, including the treatment of capital gains. Copyright Kluwer Academic Publishers 2003

Keywords: adjoint conditions; capital gains; green accounts; green NNP; returns to scale (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (7)

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DOI: 10.1023/A:1023657029623

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