Environmentally sustainable national income, an indicator

Authored by: Roefie Hueting , Bart de Boer

Routledge Handbook of Sustainability Indicators

Print publication date:  June  2018
Online publication date:  June  2018

Print ISBN: 9781138674769
eBook ISBN: 9781315561103
Adobe ISBN:

10.4324/9781315561103-14

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Abstract

All economic action is directed to the satisfaction of wants, or in other words: to welfare. Welfare is defined as the satisfaction of wants derived from our dealings with scarce goods. It is a category of personal experience and not measurable in cardinal units. Nevertheless, information can be given with the aid of indicators that are measurable in cardinal units and that are arguably influencing welfare. Economic growth is generally defined as increase of the production as measured in national income (NI or GDP). However, it can mean nothing other than increase in welfare, which is dependent on more factors such as employment, income distribution, labour conditions, leisure time and the scarce possible uses of the non-human-made physical surroundings: the environmental functions. The latter are the most fundamental scarce and consequently economic goods at the disposal of humanity. These fall outside the market and outside the measurement of NI. Environmentally sustainability national income (eSNI) is the production level that does not threaten future generations. The difference with the standard NI indicates the part of the production that is not sustainable. This equals the minimal costs of the measures to arrive at environmental sustainability, calculated with a static general economic equilibrium model, resulting in the level of eSNI.

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