benefits of steps to slow greenhouse warming. The United States is considering a major commitment to reduce its greenhouse gas emissions. Better estimates of the sources and sinks of these gases, particularly in forests, could help reduce the costs of meeting this commitment. This area represents one of the most dramatic examples of the benefits of establishing comprehensive nonmarket physical and economic accounts, involving potential savings to the nation in the tens of billions of dollars annually.

5.2 The panel concludes that developing a set of comprehensive nonmarket economic accounts is a high priority for the nation. Comprehensive accounts would address such concerns as environmental impacts, the value of nonmarket natural resources, the value of unpaid work, the value of investments in human capital, and the uses of people's time. A set of comprehensive accounts would illuminate a wide variety of issues concerning the economic state of the nation.

3. Should BEA Resume Work on the Integrated Environmental and Economic Satellite Accounts (IEESA)?

The central issues discussed in this report are whether BEA's IEESA represent a useful activity for the United States and whether work on the IEESA should resume. In addressing these issues, the panel is concerned that, particularly since the congressional stop-work order of 1994, the United States has fallen behind in developing environmental and other augmented accounting systems. The United States has in place today only the bare outline of a set of extended environmental accounts, with numerical estimates limited to subsoil mineral assets; the nation has no set of satellite environmental accounts, no physical accounting system, and no environmental input-output system.2

In weighing future directions for environmental accounting in the United States, the panel offers three general conclusions, which are followed by three associated recommendations. First, it is clear that there are many alternative approaches to natural-resource and environmental accounting. Given BEA's expertise, along with its limited resources, BEA's phased approach is a reasonable alternative. As noted earlier,

2  

The Netherlands and Denmark have done considerable work on the requirements and construction of an environmental input-output system. This work would be useful in understanding the data requirements for an input-output system for the United States. Fostering the development of such data will be an impetus for developing input-output models. See de Boo et al. (1991) and Jensen and Pedersen (1998).



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