whether the nation is using its stocks of natural resources and environmental assets in a sustainable manner; and provide information on the implications of different regulations, taxes, and consumption patterns…. More generally, augmented NIPA that encompass market and non-market environmental assets and production activities would be an important component of the U.S. statistical system, providing useful data on resource trends.

This panel agrees with the basic messages of Nature’s Numbers, particularly the more overarching recommendations, which we strongly endorse.

Recommendation 8.1: A concerted federal effort should be made to identify and collect the data needed to measure changes in the quantity and quality of natural-resource and environmental assets and associated nonmarket service flows. Greater emphasis should be placed on measuring effects as directly as possible, particularly on measuring actual human exposures to air and water pollutants (National Research Council, 1999, pp. 7-8).

The obvious place for new environmental accounting work to recommence is within the BEA, though the effort might equally well be housed at the Environmental Protection Agency, conducted with expert guidance from the BEA. Given this panel’s general agreement with recommendations published in Nature’s Numbers, the discussion of environmental accounting in this chapter is brief, focusing on the analysis, conclusions, and recommendations from that study.


Environmental accounting generally focuses on the measurement of natural or environmental wealth and the goods and services generated by this wealth. Accounting efforts have encompassed both current accounting and capital accounting—current accounting of the generation of pollutants or of the consumption of natural resources and capital accounting of changes in the stock of natural resources or the condition of the natural environment. For the most part, natural and environmental wealth excludes assets that are man made. Some environmental accounting systems—in particular, the French patrimony accounts—also include certain structures of special historical or cultural importance, such as ancient monuments. Examples of environmental goods generated by natural wealth are timber products and minerals. Examples of environmental services include recreational services, life support of animal and plant species, and esthetic services. One of the most important services is waste disposal, a positive benefit that is often accompanied by a “bad” or “disservice,” conventionally referred to as pollution.

Valuing nonmarket natural assets is not an easy matter. Some environment-related goods, such as forestry products or mined minerals, are sold in markets and therefore pose no major problems; but others, such as clean air and water or

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