Appendix D
Glossary

A

Accounts and accounting:

The purpose of accounting is to provide economic information about a household, organization, or government. Accounts are generally divided into "income accounts," which record receipts and outlays during a given period such as a year, and "asset accounts," which provide a snapshot of the assets, liabilities, and net worth of an entity at a given date. People are most familiar with the income accounts and balance sheets of businesses, but the same concepts apply equally well to individuals, governments, and nations.

Air pollutants:

Substances in the air that could, at high enough concentrations, harm human beings, animals, vegetation, or material. Air pollutants may thus include forms of matter of almost any natural or artificial composition capable of being airborne. They may consist of solid particles, liquid droplets, or combinations of these.

Air quality standards:

Levels of air pollutants, prescribed by regulations, that may not be exceeded during a specified time in a defined area.

Ambient concentration:

Measure of environmental quality indicating the amount of pollutants found per unit volume in different environmental media.

Assimilation:

Ability of natural systems to safely absorb waste and residuals.

Associated capital:

The capital investments attached to a resource that is accounted for elsewhere in the core national accounts. Examples include machinery, the capitalized value of mineral exploration, and access roads.

Augmented accounts:

See satellite accounts.



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Appendix D Glossary A Accounts and accounting: The purpose of accounting is to provide economic information about a household, organization, or government. Accounts are generally divided into "income accounts," which record receipts and outlays during a given period such as a year, and "asset accounts," which provide a snapshot of the assets, liabilities, and net worth of an entity at a given date. People are most familiar with the income accounts and balance sheets of businesses, but the same concepts apply equally well to individuals, governments, and nations. Air pollutants: Substances in the air that could, at high enough concentrations, harm human beings, animals, vegetation, or material. Air pollutants may thus include forms of matter of almost any natural or artificial composition capable of being airborne. They may consist of solid particles, liquid droplets, or combinations of these. Air quality standards: Levels of air pollutants, prescribed by regulations, that may not be exceeded during a specified time in a defined area. Ambient concentration: Measure of environmental quality indicating the amount of pollutants found per unit volume in different environmental media. Assimilation: Ability of natural systems to safely absorb waste and residuals. Associated capital: The capital investments attached to a resource that is accounted for elsewhere in the core national accounts. Examples include machinery, the capitalized value of mineral exploration, and access roads. Augmented accounts: See satellite accounts.

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Avoidance costs: Actual or imputed costs for preventing environmental deterioration by alternative production and consumption processes, or by the reduction of or abstention from economic activities. B Background concentration: Ambient concentration of pollutants, such as carbon dioxide and other greenhouse gases, measured by background stations. BEA: See Bureau of Economic Analysis. Biodiversity: Range of genetic differences, species differences, and ecosystem differences in a given area. Biomass: Total living weight (generally in dry weight) of all organisms in a particular area or habitat. It is sometimes expressed as weight per unit area of land or per unit volume of water. Biosphere: Thin stratum of the earth's surface and upper water layer containing the total mass of living organisms that process and recycle the energy and nutrients available from the environment. Bureau of Economic Analysis (BEA): An agency of the U.S. Department of Commerce that serves as the nation's economic accountant, preparing estimates that illuminate key national, international, and regional aspects of the U.S. economy. C Capital: In classical and neoclassical economic theory, one of the triad of productive inputs (land, labor, capital). Capital consists of durable produced goods that are in turn used in production. The major components of capital are equipment, structures, and inventory. Capital accumulation (environmental accounting): Environmentally adjusted concept of capital formation that accounts for additions to and subtractions from natural capital. The concept may also include discoveries or transfers (from the environment into the economic system) of natural resources, and the effects of disasters and natural growth. Capital consumption: The wearing away of capital stock due to physical destruction or erosion through the ravages of time and through the use of the asset in production, plus the complete withdrawal of capital assets from capital stock (scrappage). Depreciation is more general, in that it is the fall in the price of a capital asset as it ages. Depreciation includes capital consumption, and it also includes revaluation, which consists of pure inflation and obsolescence. Carbon dioxide (CO2): Colorless, odorless, and nonpoisonous gas that results from fossil fuel combustion and is normally a part of ambient air. It is also produced in the respiration of living organisms (plants and animals) and considered to be the main greenhouse gas contributing to climate change. Carbon monoxide (CO): Colorless, odorless, and poisonous gas pro-

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duced by incomplete fossil fuel combustion. Carbon monoxide combines with the hemoglobin of human beings, reducing the latter's oxygen-carrying capacity, with effects harmful to human health. Carbon sink: Pool (reservoir) that absorbs or takes up released carbon from another part of the carbon cycle. For example, if the net exchange between the biosphere and the atmosphere is toward the atmosphere, the biosphere is the source, and the atmosphere is the sink. Carbon tax: Instrument of environmental cost internalization. It is a tax on the producers or users of raw fossil fuels, based on the relative carbon content of those fuels. Chlorofluorocarbons (CFCs): Inert, nontoxic, and easily liquefied chemicals used in refrigeration, air conditioning, packaging, and insulation, or as solvents and aerosol propellants. Because CFCs are not destroyed in the lower atmosphere, they drift into the upper atmosphere, where their chlorine components destroy ozone. They are also among the greenhouse gases that affect climate change. Climate change: Term frequently used in reference to global warming due to greenhouse gas emissions from human activities. See also greenhouse effect. Commission of the European Communities: Revised (1993) system adopted worldwide for conventional economic (national) accounting (Commission of the European Communities et al., 1993). Complement: A relationship between goods or services in which a rise in the price of one decreases demand for the other. Consumer surplus: Difference between the amount a consumer would be willing to pay for a commodity and the amount he or she actually pays. Consumption: Total spending, by individuals or a nation, on consumer goods during a given period. Contaminant: Any physical, chemical, biological, or radiological substance or matter that has an adverse effect on air, water, land/soil, or biota. The term is frequently used synonymously with pollutant. Contingent valuation: Method of valuation used in cost-benefit analysis and environmental accounting. It is conditional (contingent) on the construction of hypothetical markets, and is one method of estimating the willingness to pay for potential environmental benefits or for the avoidance of their loss. Core accounts: National Income and Product Accounts or traditionally and regularly reported accounts leading to such overall measures as gross domestic product (GDP). Cost: Measure of what must be given up to acquire or achieve something. Cost-benefit analysis: Assessment of the direct economic and social costs and benefits of a proposed program for the purpose of program

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selection. The cost-benefit ratio is determined by dividing the projected benefits of the program by the projected costs. Cost internalization: Incorporation of negative external effects, notably environmental depletion and degradation, into the budgets of households and enterprises by means of economic instruments, including fiscal measures and other (dis)incentives. Current rent method: Valuation method that relies largely on the current rents or economic profits from harvesting or extraction. CV: See contingent valuation. D Defensive environmental costs: Actual environmental protection costs incurred in preventing or neutralizing a decrease in environmental quality, as well as the expenditures necessary to compensate for or repair the negative effects (damage) of environmental deterioration. Such costs include expenditures required to mitigate environment-related health and other welfare effects on human beings. Depletion costs: Monetary value of the quantitative depletion (beyond replenishment or regeneration) of natural assets by economic activities. Depletion of natural resources results from their use as raw materials in production or directly in final (household) consumption. Development: Process of making economic resources available or useful. Discounting (of natural assets): Determining the present value (net worth) of assets by applying a discount rate to the expected net benefits from future uses of those assets. The discount rate reflects the social preferences for current (as compared with future) uses. E Earth Summit: See United Nations Conference on Environment and Development. Ecological impact: Effects of human activities and natural events on living organisms and their nonliving environment. See also environmental impact. Economic activity: The production, consumption, or transformation of value or utility. Economic assets: Assets recorded in the balance sheets of conventional national accounts. Economic assets are entities (1) over which ownership rights are enforced by institutional units, individually or collectively, and (2) from which owners may derive economic benefits by holding or using the asset over a period of time. Economic instruments: Fiscal and other economic incentives and disincentives to incorporate environmental costs and benefits into the budgets of households and enterprises. The objective is to encourage environmentally sound and efficient production and consump-

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tion through full-cost pricing. Economic instruments include effluent taxes and charges on pollutants and waste, deposit-refund systems, and tradable pollution permits. See also cost internalization. Economic profit: See rent. Economic rent: See rent. Emission factor: Ratio between the amount of pollution generated and the amount of a given raw material processed. The term may also refer to the ratio between the emissions generated and the outputs of production processes. Emission standard: Maximum amount of polluting discharge legally allowed from a single source, mobile or stationary. Energy Information Administration (EIA): An agency of the U.S. Department of Energy that collects and analyzes energy related data. Environmental accounting: In national accounting, physical and monetary accounts of environmental assets and the costs of their depletion and degradation. In corporate accounting, the term usually refers to environmental auditing, but may also include the costing of environmental impacts caused by the corporation. See also System of Integrated Environmental and Economic Accounting (SEEA). Environmental and Natural Resource Accounting Program (ENRAP): Philippine program of environmental and natural-resource accounting. Environmental assets: See natural assets. Environmental cleanup: Action taken to deal with the release of a hazardous substance that could affect humans and/or the environment. The term is sometimes used interchangeably with the terms "remedial action," "response action," and "corrective action," as opposed to the terms ''preventive action" and "anticipatory action." See also environmental restoration and environmental protection. Environmental costs: Costs connected with the actual or potential deterioration of natural assets due to economic, social, or political activities. Such costs can be viewed from two different perspectives: (1) as costs caused, that is, costs associated with economic units actually or potentially causing environmental deterioration by their own activities, or (2) as costs borne, that is, costs incurred by economic units independently of whether they have actually caused the environmental impacts. See also defensive environmental costs. Environmental damages: Harm caused to the environment by natural or human activities. They are frequently measured in dollars, but some damages may be unmeasurable. Environmental degradation: Deterioration in environmental quality from ambient concentrations of pollutants and other activities and processes, such as improper land use and natural disasters.

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Environmental effect: Result of an impact of the environment on human health and welfare. Environmental expenditures: Capital and current expenditures related to characteristic activities and facilities specified in classifications of environmental protection activities. Environmental externalities: Economic concept of uncompensated environmental effects of production and consumption that affect consumer utility and enterprise cost outside the market mechanism. As a consequence of negative externalities, private costs of production tend to be lower than "social" costs. It is the aim of the "polluter/user pays" principle to prompt households and enterprises to internalize externalities in their plans and budgets. See also economic instruments. Environmental functions: Environmental services, including spatial functions, waste disposal, natural resource supply, and life support. See also environmental services. Environmental impact: Direct effect of socioeconomic activities and natural events on the components of the environment. See also environmental effect. Environmental protection: Any activity to maintain or restore the quality of environmental media by preventing the emission of pollutants or reducing the presence of polluting substances. It may consist of (1) changes in characteristics of goods and services, (2) changes in consumption patterns, (3) changes in production techniques, (4) treatment or disposal of residuals in separate environmental protection facilities, (5) recycling, and (6) prevention of degradation of the landscape and ecosystems. Environmental Protection Agency (EPA): A federal agency of Cabinet rank. The EPA obtains and analyzes information pertaining to the environment and suggests and enforces relevant federal laws designed to protect human health and the natural environment. Environmental protection costs: Costs associated with preventing environmental damage. Environmental quality standard: Limit for environmental disturbances, in particular from ambient concentrations of pollutants and wastes, that determines the maximum allowable degradation of environmental media. Environmental restoration: Reactive environmental protection. It includes: (1) reduction or neutralization of residuals; (2) changes in the spatial distribution of residuals; (3) support for environmental assimilation; and (4) restoration of ecosystems, landscape, and so forth. See also environmental protection.

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Environmental services: Qualitative functions of natural nonproduced assets of land, water, and air (including related ecosystems) and their biota. There are three basic types of environmental services: (1) disposal services, which reflect the functions of the natural environment as an absorptive sink for residuals; (2) productive services, which reflect the economic functions of providing natural-resource inputs and space for production and consumption; and (3) consumer or consumption services, which provide for physiological as well as recreational and related needs of human beings. Environmental statistics: Statistics that describe the state and trends of the environment, covering the media of the natural environment (air/climate, water, land/soil). Environmental statistics are integrative in nature, measuring human activities and natural events that affect the environment, the impacts of these activities and events, social responses to environmental impacts, and the quality and availability of natural assets. Broad definitions include environmental indicators, indices, and accounting. European System for the Collection of Economic Information on the Environment (SERIEE): System consisting mainly of data on environmental protection expenditures and economic data on the use and management of natural resources. Links to physical data, such as the amount of waste and other pollutants generated or avoided and the use of water and other resources, are to be established in parallel as far as possible. The system is designed to form a series of satellite accounts of the national accounts. Existence value: Value of knowing that a particular species, habitat, or ecosystem does and will continue to exist. Such value is independent of any use the valuer may or may not make of the resource. Externality: Activity that affects others for better or worse, without those others paying or being compensated for the activity. Externalities exist when private costs or benefits do not equal social costs or benefits. F FASAB: Federal Accounting Standards Advisory Board. Considers and recommends accounting principles for the federal government. Established in October 1990 by the secretary of the Department of the Treasury, the director of the Office of Management and Budget, and the comptroller general of the United States. It is an advisory committee operating under the Federal Advisory Committee Act. Fixed capital: Traditionally nonresidential structures, residential structures, and producers' durable equipment. Extended accounts would also include environmental and human assets.

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Flow vs. stock: A flow variable is one that has a time dimension or that flows over time (like a stream); a stock variable is one that measures a quantity at a point in time (like the water in a lake). Fossil fuels: Coal, oil, peat, and natural gas. Fugitive assets: Assets capable of moving of their own accord, e.g., wild or natural fish. G GDP: See gross domestic product. GNP: See gross national product. Genetic resources: Genetic material of plants, animals, or microorganisms of value as a resource for future generations of humanity. Global warming: Phenomenon believed to occur as a result of the buildup of carbon dioxide and other greenhouse gases, identified by many scientists as a major global environmental threat. See also greenhouse effect. Green GDP: Popular term for environmentally adjusted gross domestic product. Greenhouse effect: Warming of the earth's atmosphere caused by a buildup of carbon dioxide and other greenhouse or trace gases. These gases allow sunlight to pass through and heat the earth, but prevent a counterbalancing loss of heat radiation. See also global warming . Greenhouse gases: Carbon dioxide, nitrous oxide, methane, ozone, and chlorofluorocarbons occurring naturally or resulting from human (production and consumption) activities and contributing to global warming. See also global warming and greenhouse effect. Gross domestic product (GDP): The most important item in the National Income and Product Accounts (NIPA). GDP measures the nation's total output of goods and services and the total income of the nation generated by that output. It measures the sum of the dollar values of consumption, gross investment, government purchases of goods and services, and net exports produced within a nation during a given year, where these transactions are valued at market prices. It also represents the incomes earned as wages, profits, and interest, as well as indirect taxes. In addition to the totals for the nation, the NIPA provide a rich array of data on output and incomes in different industries and regions, as well as a record of international transactions. Gross national product (GNP): The value at current market prices of all final goods and services produced during a period by the assets owned by the citizens of a nation. H Hedonic modeling: Running a regression analysis to measure or esti-

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mate the relationship between price and the characteristics of goods and services. Hedonic pricing: Price as a function of the characteristics of a good or service; for example, the more skilled a laborer, the higher the price of his/her labor. Hicksian income: The maximum a nation can consume while keeping its capital stock intact. Hotelling rent: Net return realized from the sale of a natural resource under particular conditions of long-term market equilibrium. It is defined as the revenue received minus all marginal costs of resource exploitation, exploration, and development, including a normal return to fixed capital employed. The Hotelling rent is used as a measure of natural-resource depletion in environmental accounting. Hotelling valuation: Valuing "mineable" natural resources using only current rents, avoiding the need to forecast future revenues and to discount them at some discount rate. Human capital: Productive wealth embodied in labor, skills, and knowledge. I Inflow: Entry of extraneous rainwater into a sewer system from sources other than infiltration, such as basement drains, manholes, storm drains, and street washing. L Land degradation: Reduction or loss of the biological or economic productivity and complexity of rain-fed crop land, irrigated crop land, range, pasture, forest, or woodlands resulting from natural processes; land uses; or other human activities and habitation patterns, such as land contamination, soil erosion, and destruction of the vegetation cover. Land reclamation: Gain of land from the sea, wetlands, or other water bodies and restoration of productivity or use to lands that have been degraded by human activities or impaired by natural phenomena. Land-use classification: Classification providing information on land cover and the types of human activity involved in land use. It may also facilitate the assessment of environmental impacts on, and potential or alternative uses of, land. The classification, developed by the Economic Commission for Europe, consists of seven main categories: (1) agricultural land; (2) forest and other wooded land; (3) built-up and related land, excluding scattered farm buildings; (4) wet open land; (5) dry open land with special vegetation cover; (6) open land without or with insignificant vegetation cover; and (7) waters.

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Loading: The quantity of polluting material discharged into a body of water. M Maintenance (cost) valuation (environmental accounting): Method of measuring imputed environmental (depletion and degradation) costs caused by economic activities of households and industries. The value of the maintenance cost depends on the avoidance, restoration, replacement, or prevention activities chosen. Marginal cost: Increase in total cost required to produce 1 extra unit of output (or reduction in total cost from producing 1 less unit). Marginal value: Dollar value of one additional unit of product. Market valuation: (1) Market price valuation applied in national accounts; (2) value of natural resources and of their depletion and degradation, imputed in environmental accounting and estimated on the basis of expected market returns. See also discounting (of natural assets) and Hotelling rent. Materials and energy balances: Accounting tables that provide information on the material input into an economy delivered by the natural environment, the transformation and use of that input in economic processes (extraction, conversion, manufacturing, consumption), and its return to the natural environment as residuals (wastes). The accounting concepts involved are founded on the first law of thermodynamics, which states that matter (mass/energy) is neither created nor destroyed by any physical process. Maximum sustainable yield: Maximum use a renewable resource can sustain without its renewability being impaired through natural growth or replenishment. McKelvey box: Two-dimensional scheme that combines criteria of increasing geologic assurance (undiscovered/possible/probable/proved reserves) with those of increasing economic feasibility (subeconomic "resources" as compared with economic "reserves," depending on price and cost levels). Measure of economic welfare: Adjusted measure of total national output, including only the consumption and investment items that contribute directly to economic well-being. It is calculated as additions to gross national product (GNP), including the value of leisure and the underground economy, and deductions such as environmental damage. It is also known as "net economic welfare." Mineral: A naturally occurring inorganic substance having a characteristic set of physical properties, a definite range of chemical composition, and a molecular structure usually in crystalline form. Mineral reserve: Mineral resources that are both currently profitable to exploit and known with considerable certainty.

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Mineral resource: A concentration of naturally occurring solid, liquid, or gaseous material in or on the earth's crust in such form and amount that economic extraction of a commodity from the concentration is currently or potentially feasible. Mining wastes: Mining-related by-products of two types: (1) mining and quarrying extraction wastes, which are barren soils removed from mining and quarrying sites during the preparation for mining and quarrying that do not enter into the dressing and beneficiating processes, and (2) mining and quarrying dressing and beneficiating wastes, which are obtained during the process of separating minerals from ores and other materials extracted during mining and quarrying activities. These wastes occupy valuable land and cause harm to stream life when they are deposited near the drainage area of a stream. N National Income and Product Accounts (NIPA): Provide a coherent and comprehensive picture of the nation's economy. These accounts measure the total income and output of the entire nation, including households, businesses, not-for-profit enterprises, and different levels of government. The key concepts in the NIPA, the core accounts, measure the total market output and income of the United States (see Young and Tice, 1985; and Kendrick, 1996). For the most important item, see gross domestic product (GDP). Natural assets: Assets of the natural environment. They consist of biological assets (produced or wild), land and water areas with their ecosystems, subsoil assets, and air. Natural resources: Natural assets that can be used for economic production or consumption. See also renewable natural resources and nonrenewable natural resources. NDP: See net domestic product. Near market: Goods or services that are provided outside of a market are called near-market goods or services. Goods or services can be provided both via markets and outside of markets. An example is vegetables that are purchased in a store (or market) versus those grown for home consumption. Net domestic product (NDP): Gross domestic product less the allowance for depreciation of capital goods. Net national welfare: See measure of economic welfare. Net present value: Present value of an investment, found by discounting all current and future streams of income by an appropriate rate of interest. Net present worth: Net present value of an organization's assets (after

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deduction of liabilities), calculated by discounting current and future streams of income by the appropriate interest rate. Net price: Valuation used in natural-resource economics to estimate the economic value of a natural resource and its depletion. It is defined as the actual market price of a natural resource output minus all marginal exploitation costs, including a normal return to capital. NIPA: See National Income and Product Accounts. Nonmarket: Economic activity that produces goods and services not distributed by markets. Nonrenewable natural resources: Exhaustible natural resources, such as mineral resources, that cannot be regenerated after exploitation. NPV: See net present value. O OECD: Organization for Economic Cooperation and Development. Opportunity cost: Value of the next best use (or opportunity) for an economic good, or value of the sacrificed alternative. Ozone depletion: Destruction of ozone in the stratosphere, where it shields the earth from harmful ultraviolet radiation. Its destruction is caused by chemical reactions in which oxides of hydrogen, nitrogen, chlorine, and bromine act as catalysts. P Particulate loadings: Mass of particles per unit volume of air or water. Particulate removal: Removal of particulate air pollutants from their gaseous media using gravitational, centrifugal, electrostatic and magnetic forces, thermal diffusion, or other techniques. Particulates: Fine liquid or solid particles, such as dust, smoke, mist, fumes, or smog, found in air or emissions. Photochemical air pollution: Pollution caused by the reaction of unsaturated and saturated hydrocarbons, aromatics, and aldehydes (emitted owing to the incomplete combustion of fuels) with light. It causes eye irritation. Physical accounting: Natural-resource and environmental accounting of stocks and changes in stocks in physical (nonmonetary) units, for example, weight, area, or number. Qualitative measures, expressed in terms of quality classes, types of uses, or ecosystem characteristics, may supplement quantitative measures. The combined changes in asset quality and quantity are called "volume changes." Pigouvian tax: Tax levied on an agent causing an environmental externality (environmental damage) as an incentive to avert or mitigate such damage. Pollutant: Substance present in concentrations that may harm organisms (humans, plants, and animals) or exceed an environmental quality standard. The term is frequently used synonymously with contaminant .

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Pollution: (1) Presence of substances and heat in environmental media (air, water, land) whose nature, location, or quantity produces undesirable environmental effects; (2) activity that generates pollutants. Pollution abatement: Technology applied or measure taken to reduce pollution and/or its impacts on the environment. The most commonly used technologies are scrubbers, noise mufflers, filters, incinerators, wastewater treatment facilities, and comporting of wastes. Pollution abatement costs or expenditures: Costs incurred to reduce or mitigate specific pollution. Primary energy consumption: Direct use at the source, or supply to users without transformation, of crude energy, that is, energy that has not been subjected to any conversion or transformation process. Proved reserves: Such estimated quantities of mineral deposits, at a specific date, as analysis of geologic engineering data demonstrates with reasonable certainty to be recoverable under the current economic and operational conditions, even though actual extraction may occur in the future. Public good: A commodity whose benefits may be provided to all people (in a nation or town) at no more cost than that required to provide it for one person. The benefits of the good are indivisible, and people cannot be excluded from using it. Public investment: Government spending on public goods. Q Quality of life: Notion of human welfare (well-being) measured by social indicators rather than by quantitative measures of income and production. R Recreational land: Land used for purposes of recreation, for example, sports fields, gymnasiums, playgrounds, public parks and green areas, public beaches and swimming pools, and camping sites. Renewable energy sources: Energy sources including solar energy, geothermal energy, wind power, hydropower, ocean energy (thermal gradient, wave power, and tidal power), biomass, animal power, and fuel wood. Renewable natural resources: Natural resources that, after exploitation, can return to their previous stock levels by natural processes of growth or replenishment. "Conditionally renewable resources" are those whose exploitation eventually reaches a level beyond which regeneration becomes impossible. Such is the case with the clear-cutting of tropical forests. Rent: Net return on a production factor whose supply is perfectly inelas-

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tic (available only as a fixed amount), such as land. It is also called "pure economic rent." See also Hotelling rent. Restoration costs: Actual and imputed expenditures for activities aimed at the restoration of depleted or degraded natural systems, partly or completely counteracting the (accumulated) environmental impacts of economic activities. See also environmental restoration . Ricardian rent: Any return to a factor of production fixed in supply. Rio Declaration on Environment and Development: See United Nations Conference on Environment and Development (United Nations, 1993). Risk assessment: Quantitative and qualitative evaluation of the risk posed to human health and/or the environment by the actual or potential presence of and exposure to particular pollutants. Risk management: Process of evaluating and selecting among alternative regulatory and nonregulatory responses to risk. The selection process necessarily requires consideration of legal, economic, and social factors. Royalty: Payment for the use of assets, both intangible, such as patents, and tangible, notably subsoil assets. Royalties paid for the use of subsoil assets are also called rents even though they are not rents by the definition given above. S Satellite accounts: Additional or parallel accounting system that expands the analytical capacity of national accounts without overburdening or disrupting the central system. It may provide additional information, apply complementary or alternative concepts, extend the coverage of costs and benefits of human activities, and link physical with monetary data. The System of Integrated Environmental and Economic Accounting (SEEA) constitutes a satellite system of the System of National Accounts (SNA). Secondary air pollution: Pollution caused by reactions in air already polluted by primary emissions (from factories, automobiles, and so forth). An example of secondary air pollution is photochemical smog. Secondary treatment: Second step in most waste treatment systems, during which bacteria consume the organic portions of the wastes. This is accomplished by bringing the sewage, bacteria, and oxygen together in trickling filters or within an activated sludge process. Secondary treatment removes all floating and settleable solids and about 90 percent of oxygen-demanding substances and suspended solids. Disinfection by chlorination is the final stage of the secondary treatment process. SEEA: See System of Integrated Environmental and Economic Accounting . SNA: See System of National Accounts.

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Strip mining: Process in which rock and topsoil strata overlying mineral deposits are removed in strips. Stumpage value: Economic value of a standing tree, equivalent to the amount concessionaires earn when a log is sold to the sawmill or the exporter, less the cost of logging. It is used as the net-price valuation in environmental accounting. Subsoil assets: Developed and undeveloped reserves of mineral deposits located on or below the earth's surface. Supplemental accounts: See satellite accounts. Sustainability: (1) Use of the biosphere by present generations while maintaining its potential yield (benefit) for future generations; (2) nondeclining trends of economic growth and development that might be impaired by natural-resource depletion and environmental degradation. Sustainable development: ''Development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs" (World Commission on Environment and Development, 1987). It assumes the conservation of natural assets for future growth and development. Sustainable income: Sustainable national income is defined as the maximum amount a nation can consume while ensuring that future generations will have living standards at least as high as those of the current generation. System of Integrated Environmental and Economic Accounting (SEEA): Satellite system of the System of National Accounts (SNA) proposed by the United Nations (1993) for the incorporation of environmental concerns (environmental costs, benefits, and assets) into national accounts. System of National Accounts (SNA): See Commission of the European Communities. T Tangible assets: Assets including human-made (produced) nonfinancial assets and nonproduced natural assets and excluding intangible (nonproduced) assets such as patents or good will. See also natural assets. Technological change: Improvement in technology that allows for more output created by the same amount of inputs. Tradable pollution permits: Rights to sell and buy actual or potential pollution in artificially created markets. See also economic instruments. Transboundary pollution: Pollution that originates in one country but, by crossing the border through pathways of water or air, is able to cause damage to the environment in another country.

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Travel cost: A method for assessing willingness to pay using cost data associated with movement to an environmental recreation area. U United Nations Conference on Environment and Development: Conference held in 1992 in Rio de Janeiro (also referred to as the Biodiversity Convention, the Climate Convention, and the Earth Summit). The conference adopted the Rio Declaration on Environment and Development; an action plan termed Agenda 21; and the Non-Legally Binding Authoritative Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of All Types of Forests (Forest Principles) (United Nations, 1993). The conference also presented for signature by governments the United Nations Framework Convention on Climate Change (United Nations, 1992a) and the Convention on Biological Diversity (United Nations Environment Program, 1992b). United Nations Environment Program: International organization established in 1972 to catalyze and coordinate activities aimed at increasing scientific understanding of environmental change and developing environmental management tools. User cost: Concept proposed for valuation of the depletion of mineral deposits (El Serafy, 1989). A time-bound stream of net revenues from the sale of an exhaustible natural resource is converted into a permanent income stream by investing part of the revenues—the user cost allowance—over the lifetime of the resource. The remaining amount of the revenue is regarded as true income. Utility: The total satisfaction derived from the consumption of goods or services. V Valuation of natural assets: Methods of applying a monetary value to natural assets in environmental accounting that include (1) market valuation; (2) direct nonmarket valuation, such as assessment of the willingness to pay for environmental services (contingent valuation); and (3) indirect nonmarket valuation, for example, costing of environmental damage or of compliance with environmental standards. See also maintenance (cost) valuation, market valuation, and contingent valuation. Value added: Difference between the value of goods produced and the cost of materials and supplies used in producing them. W Waste: Materials that are not prime products (that is, products produced for the market), for which the generator has no further use in terms of his/her own purposes of production, transformation, or consumption, and of which he/she wishes to dispose. Wastes may be generated during the extraction of raw materials, the processing of

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raw materials into intermediate and final products, the consumption of final products, and other human activities. Residuals recycled or reused at the place of generation are excluded. Water conservation: Preservation, control, and development of water resources, both surface and groundwater, and prevention of pollution. Water quality index: Weighted average of selected ambient concentrations of pollutants, usually linked to water quality classes. Willingness to pay: See contingent valuation. WRI: World Resources Institute.