Summary of Green Accounting

In the traditional system of national income accounting the changes in environmental resources are ignored. Although natural resources are valuable to us and the stock of natural resources undergoes degradation and depletion, it is not taken into account in SNA. Often the extraction of natural resources, which reduces future production possibility, is shown as a value addition.

In recent years efforts have been made to modify GDP and NDP by including the non-marketed benefits of forest resources. The approaches to environmental accounting can be put under four major categories, viz., pollution expenditure accounting, physical accounting, green indicators, and satellite accounts. Some of the studies have attempted to account for natural resources by including the extraction, regeneration, degradation and conservation of forest resources in the SEEA framework.