Geology Reference
In-Depth Information
convert physical assets and impacts on ecosystems into monetary accounts which
are added to or detracted from the aggregated accounts and finally to the GDP.
As opposed to environmental economists, ecological economists claim that the
economy must be embedded in the ecological realm. They essentially advocate for
an economy that avoids growth based on natural capital exhaustion.
This chapter has also analysed the different approaches used to account natural
capital and its depletion. It has been seen that the System of Environmental and
Economic Accounts (SEEA) of the United Nations is an accounting structure based
on the System of National Accounts that integrates environmental and economic
statistics. Even if it is not free of weak points (it is based on market prices, for
example), it constitutes an impressive initiative which attempts to organise infor-
mation regarding Man-Nature interactions, in a rational and global way.
In taking Nature into account, one aims to sustain the environment that sup-
ports Man and in doing so realises that money is not everything. With money one
can only reimburse people, not Nature. Therefore, it is important to define what
sustainability really means.
According to “El-Serafy” approach (weak sustainability), national accounts
should correct income by including the so called “user cost” to sustain prosperity for
compensating resource depletion and for assuming any unplanned environmental re-
mediation. Alternatively, the Hotelling method (framed under strong sustainability)
proposes to transform the National Income indicator into a Sustainable National
Income, by discounting every aspect of the degradation and the depletion of natural
resources caused by economic development.
The last part of the chapter explains the view of natural and physical scientists.
From a physical sciences perspective, money should not be the unit of measure
for natural resource accounting, even if it allows for comparison among different
environmental assets and is capable of aggregating them. This is because a monetary
based analysis is a subjective way of assessing environmental functions which would
be better carried out through physical and universal units.
Subsequently, a fair number of physical indicators have been identified. Partic-
ularly, the MIPS (material input per unit of service) quantifies all materials used in
order to produce a good or a service from cradle to grave. The ecological footprint
is used for evaluating the amount of biologically productive land and sea area nec-
essary to supply the resources a human population consumes and to assimilate the
associated waste. In the embodied energy concept, the energy needed to manufac-
ture a product or provide a service along the entire product life-cycle is calculated.
The emergy indicator, meanwhile, tries to express the amount of direct and indirect
solar energy needed to produce any product or service.
The physical indicator selected by the authors for accounting the mineral en-
dowment on Earth in this topic is “exergy”. This property is based on the Second
Law and is a measure of the quality of systems. Exergy is quantified in energy
units and accounts for all physical properties that characterise any resource. As
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