hand, understanding these technical relationships is essential if environmental accounts are to serve as a data set to support environmental management, in which the goals are to understand the severity and causes of environmental problems, along with remedies needed to mitigate those problems.

Valuation: General Issues

Once appropriate physical data have been developed, the next step in developing integrated accounts is to value changes in the physical measures. Physical data alone are often interesting and useful for policy making, and improvements in physical environmental data could enhance policy-making efforts. Indeed, most countries have not gone beyond developing physical measures and indicators because of the difficulties involved in valuing nonmarket goods. Without valuation, however, physical data alone have serious limitations for both scorekeeping and environmental management. Aggregate physical measures, such as areas of agricultural land, forest, or wetlands or tons of sulfur, toxic wastes, or particulate emissions, provide incomplete evidence on the effects of these chemicals on economic well-being or economic sustainability over time. For example, losing 1000 acres of prime Florida Everglades would probably impose a greater economic and ecological loss than losing an equivalent area of frozen wetlands in northern Alaska. Thus an accounting entry of ''total wetland acres" lost would not be a useful measure. Furthermore, a simple measure of wetland area would fail to capture improvements in quality that might occur as a result, for example, of current efforts to restore the Everglades as a fully functioning ecosystem.

For many issues, it is necessary to weight the physical measures by their importance. There are approaches to weighting physical quantities other than valuing all impacts in dollar terms; for example, different environmental residuals can be weighted by how they affect human mortality. However, such weights would be incomplete because they would exclude impacts on morbidity or on the health of ecosystems. In economic accounting, the "importance weights" are the economic values, usually market prices. The advantage of using economic valuation is that comparisons can be made across very different environmental effects and with goods that are part of the market economy. While relying on economic values has many desirable features, there are a number of difficulties involved in usefully applying nonmarket valuation studies and techniques to environmental accounting, as discussed below (see also Chapter 2).



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