Green accounting
Encyclopedia
Green accounting is a type of accounting that attempts to factor environmental costs into the financial results of operations. It has been argued that gross domestic product
ignores the environment and therefore decisionmakers need a revised model that incorporates green accounting.
in the 1980s.
is already factored into accounting for the extraction industries and the accounting for externalities may be arbitrary. Julian Lincoln Simon
, a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute
, argued that use of natural resource
s results in greater wealth, as evidenced by the falling prices over time of virtually all nonrenewable resources.
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
ignores the environment and therefore decisionmakers need a revised model that incorporates green accounting.
Etymology
The term was first brought into common use by influential economist professor Peter WoodPeter Wood
Peter John Wood was an English musician, born in Middlesex, England. In his early years he lived with his parents in Hythe Field Avenue, Egham, Surrey...
in the 1980s.
Debate
It is a controversial practice however, since depletionDepletion
Depletion may refer to:*Depletion , an accounting concept*Depletion region, a concept of semiconductor physics*Depletion width, a concept of semiconductor physics*Grain boundary depletion, a mechanism of corrosion...
is already factored into accounting for the extraction industries and the accounting for externalities may be arbitrary. Julian Lincoln Simon
Julian Lincoln Simon
Julian Lincoln Simon was a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute at the time of his death, after previously serving as a longtime business professor at the University of Illinois at Urbana-Champaign.Simon wrote many books and...
, a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
, argued that use of natural resource
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
s results in greater wealth, as evidenced by the falling prices over time of virtually all nonrenewable resources.
See also
- Earth economicsEarth EconomicsEarth Economics, a 501c3 non-profit headquartered in Tacoma, Washington, United States, is dedicated to researching and applying the economic solutions of tomorrow today. Earth Economics provides robust, science-based, ecologically-sound, economic analysis, policy and tools to governments,...
(policy think tank) - EnvironmentalismEnvironmentalismEnvironmentalism is a broad philosophy, ideology and social movement regarding concerns for environmental conservation and improvement of the health of the environment, particularly as the measure for this health seeks to incorporate the concerns of non-human elements...
- Environmental protectionEnvironmental protectionEnvironmental protection is a practice of protecting the environment, on individual, organizational or governmental level, for the benefit of the natural environment and humans. Due to the pressures of population and our technology the biophysical environment is being degraded, sometimes permanently...
- Natural capitalNatural capitalNatural capital is the extension of the economic notion of capital to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future...
- National accountsNational accountsNational accounts or national account systems are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry accounting...
- Renewable resourceRenewable resourceA renewable resource is a natural resource with the ability of being replaced through biological or other natural processes and replenished with the passage of time...
- Total Economic ValueTotal Economic ValueTotal economic value appears in environmental economics as an aggregation of the main function based values provided by a given ecosystem. Those include use and non-use values....