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Konjunkturinstitutet - National Institute of Economic Research Working Papers, Konjunkturinstitutet - National Institute of Economic Research

No 86:
Monetary Green Accounting and Ecosystem Services

Ing-Marie Gren

Abstract: The point of departure in this paper is that monetary green accounting aims at serving as indicator of wealth changes, sustainable use of natural capital, and performance of environmental policy. It is then investigated how wealth changes and sustainable development of natural capital can be estimated by means of ecosystem services. These services are defined as outputs from natural capital. The value of changes in natural capital, or wealth change, is thus measured as the value of impacts on current and future production of ecosystem services. It is then shown how this measure can be used as an indicator of sustainable use of the aggregate natural capital, and also how it can be applied efficient environmental policies. An empirical demonstration is made to the calculation of wealth changes to Swedish forests, agricultural landscape, wetlands, air quality, and coastal and marine ecosystems. The demonstration shows that the net welfare contribution from these natural capital assets during the period under study is positive, but that the use of the assets is unsustainable.

JEL-Codes: D60; D90; O40; Q20; (follow links to similar papers)

32 pages, July 28, 2003

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