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ON THE INTERPRETATION AND APPLICABILITY OF A “GREEN NATIONAL PRODUCT”
Author(s) -
Aaheim Asbjørn,
Nyborg Karine
Publication year - 1995
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1995.tb00093.x
Subject(s) - economics , national accounts , product (mathematics) , interpretation (philosophy) , national income and product accounts , measures of national income and output , simple (philosophy) , value (mathematics) , damages , national economy , public economics , state (computer science) , positive economics , macroeconomics , economic system , political science , computer science , law , mathematics , geometry , programming language , philosophy , epistemology , algorithm , machine learning
Several economists have recently suggested that the national product should be adjusted for the value of environmental damages. In this paper we look at some of the difficulties one encounters when the correcting formulae derived from simple theoretical models are transferred to applied national accounting. In particular, the paper is concerned with the question of whether a corrected national income measure will actually provide relevant information for policy‐makers. It is shown that a “green national product” will be very difficult to interpret. In general, it may not give any indications of the necessity of imposing stronger environmental policy actions. Nor does it indicate the hypothetical state of the economy after a change in environmental efforts.