economy is not sustainable. The combination of this increasing awareness and recognition of the primitive state of environmental data has led to a widespread desire to broaden the nation's economic accounts to include natural resources and the environment. The idea of including natural-resource and environmental assets and services in the economic accounts is part of a movement to develop broader economic indicators. It reflects the reality that economic and social welfare do not stop at the market's border, but extend to many near-market and nonmarket activities.

BEA has studied augmented accounting since the early 1980s. It began work on the U.S. version of environmental accounting, the IEESA, in 1992. Congressional concerns about environmental accounting were raised shortly after the first publication of the U.S. environmental accounts, and Congress requested that work on the IEESA cease until the methodological issues had been reviewed. In response to the congressional mandate, the Commerce Department asked the National Academy of Sciences to undertake a review of environmental accounting, and this report is a response to that request.

The NIPA are the most important measures of a country's overall economic activity. From the perspective of environmental accounting, the major point to recognize is that GDP is conceptually defined to include the final output of marketed goods and services—that is, goods and services that are bought and sold in market transactions. While recognizing the need to consider alternative measures, it is important to retain the core market-based accounts, which are of great value for historical and international comparisons and will continue to be a critical indicator for much economic policy making.

Work on augmented accounting in official statistical agencies, as well as by individual scholars, has yielded estimates on a wide variety of nonmarket activities for experimental augmented national accounts. The guiding principle in extending the national economic accounts is to measure as much economic activity as feasible, regardless of whether it takes place inside or outside the marketplace. Augmented national economic accounts are designed to provide better measures of final output—of what consumers in the United States currently enjoy in the way of goods and services, and of the accumulation of capital of all kinds that will permit the future production of goods and services.

A set of well-designed environmental accounts can overcome the recognized shortcomings of the current market-based accounts. They can provide useful information for managing the nation's public and private assets, for improving regulatory decisions, and for informing private-sector decisions. The collection of data on comprehensive income and output is an investment that would have a high economic return for the nation. There are many examples of the benefits of comprehensive eco-