nomic accounts. These include better estimates of the impact of regulatory programs on productivity, analyses of the costs and benefits of environmental regulations, management of the nation's public lands and resources, and assessment of the costs and benefits of taking steps to slow global warming.

Augmented national accounts can also provide valuable indicators of whether economic activity is sustainable. The national accounts have a close relationship with measures of sustainable income, since the usual measure of NDP corresponds to the highest sustainable level of per capita consumption under idealized conditions.

The nation's measures of national income and output can be improved by including all consumption and net investment to obtain augmented income and output measures. Among the currently omitted items that need to be added are nonmarket consumption, such as home production and final environmental services, and nonmarket investments, such as changes in the value of resource stocks and investment in human capital.

Over the last quarter-century, official statistical agencies and individual researchers in the United States and abroad have responded to the deficiencies in current accounting approaches by developing alternative approaches and new systems of accounts. An initial general approach is to supplement the accounts with improved data on physical flows. Physical accounting systems are valuable for policy purposes when overall environmental objectives and targets are clearly established. They are an essential component of both economic accounts and environmental policy making. At present, the United States has invested little in developing comprehensive environmental indicators. The development of improved environmental indicators is an important priority for enhancing the nation's ability to evaluate and analyze environmental trends and track the interaction between the environment and the economy. From the point of view of environmental accounting, enhancing the national accounts in a manner that is scientifically and economically sound will require considerable improvement in the underlying physical data.

A second approach to environmental accounting is the construction of comprehensive measures of national income or output to supplement the conventional GDP and NDP accounts. Many efforts in this area have been broad-based attempts to remedy general issues raised by the national accounts. Other studies have introduced augmented environmental accounts with a more targeted approach, focusing on how the national accounts would be modified to incorporate the environment and offering estimates of economic activity in sectors providing services of natural resources.

Because of the diversity of approaches and controversies about appropriate approaches, no international consensus has been achieved on a