ABSTRACT
This chapter moves from individual economic prosperity and wellbeing to collective (national) wealth, welfare and income. Blaming – unfairly – gross domestic product for falsely measuring welfare, indices of genuine progress and comprehensive and inclusive wealth seek to provide better measures of social progress. They assume that modifying current and discounting future consumption obtains valid measures of welfare and wealth generated by the economy. Mixing different values of market prices, resource rents and damage further obscures the meaning of these indicators. Introducing the cost of natural capital consumption into the national accounts is more realistic. Environmentally adjusted economic indicators of national income, capital formation and capital itself are the result. A first global study of the System for integrated Environmental and Economic Accounting (SEEA) indicates non-sustainable negative investment in produced and natural capital for Africa, Latin America and a number of Asian countries. Such accounting ignores, though, the “outsourcing” of natural resource extraction and hazardous production from industrialized to developing countries; it also caters to weak sustainability, i.e., the possible substitution of exhaustible assets by reproducible ones.
