Green National Accounting: Why and How?

The present paper gives an overview of the theory of green national accounting. Three purposes of green national accounting (measurement of sustainable income, social welfare or net social profit) and two measures (Green NNP and Hicksian income) are considered. It is argued that sustainable income and social welfare correspond to different purposes. Under the assumption of no exogenous technological progress, Green NNP is shown equal to Hicksian income if there is a constant interest rate or if consumption is constant.