ABSTRACT
The optimal growth theory is used to derive the appropriate definition of the net national product concept, when there are environmental resources and environmental damage to take into account. The linear support of the Hamiltonian value along the optimal path is the exact correspondence to the net National Welfare Measure. It measures the current utility of consumption and the present value of the future utility stream from current stock changes. If the politicians after public discussions could decide on the marginal value of environmental improvements, these marginal values could be used to estimate the environmental damage cost. Hartwick's rule says that sustainable development is achieved when the competitive rents on exhaustible resources are invested in reproducible capital. When an unanticipated change takes place, there will be a change in NNI and the economy will follow a new path till the next unanticipated changes are realized.
