approach has two further attractive features: it allows better integration with existing accounts, since some of these assets (such as residential property and forests) have an extensive existing database; and it allows incremental development of a set of valuations, building upon those in the market sector.

Practical Choices in Expanding the Accounting Framework

A complete accounting system including interactions in the production and asset accounts would be a significant undertaking. Deciding on the scale of augmented accounting and the next steps to be taken will require considerable strategic thought. One question is whether the accounts will be used for scorekeeping or for management (see the discussion in Chapter 2).

Scorekeeping, which involves developing a better measure of the performance of the economy over time, is one perspective. It addresses the questions of trends in the values of environmental assets and whether current consumption is sustainable. If scorekeeping of this type is the purpose of supplemental environmental accounts, it will simplify the enterprise because there will be no need to consider intermediate interactions between production sectors. Tracing where pollutants were produced and how they affect intermediate product is unnecessary as long as one can measure final consumption and changes in assets. For example, a dying forest is a deteriorating asset; whether the deterioration is caused by acid precipitation, tropospheric ozone, or pest infestation is secondary from a scorekeeping perspective. What is important is to measure the deterioration accurately. Similarly, the overall health and skills of human populations is a central issue in measuring whether the economy as currently structured is leading to an increase or decrease in the stock of human capital. Why the change is occurring—whether because of changes in health care or education expenditures or reductions in blood lead—is secondary to the measurement issue. Overall scorekeeping would note the substantial improvements in the health status of Americans over this century rather than decreases in particular ailments.

The second broad perspective on the function of environmental accounts is that of environmental management. This perspective focuses on the sources, transportation, and ultimate disposal of residual pollutants, particularly their contributions to outcomes of economic and ecological consequence. Knowing to what extent particular emissions of residuals come from utilities, automobiles, or volcanic eruptions is critical to developing strategies for control. If human sources are dwarfed by natural sources, for example, efforts to control human sources may be futile. Similarly, knowing that life expectancies have increased dramatically is not

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement