International Review of Environmental and Resource Economics > Vol 16 > Issue 3-4

Natural Capital and Wealth Accounting for Sustainability Assessment: A Global Perspective

Rintaro Yamaguchi, National Institute for Environmental Studies (NIES), Japan, yamaguchi.rintaro.r41@kyoto-u.jp , Moinul Islam, Kochi University of Technology, Japan, moinul.eco@gmail.com , Shunsuke Managi, Urban Institute, Kyushu University, Japan, managi@doc.kyushu-u.ac.jp
 
Suggested Citation
Rintaro Yamaguchi, Moinul Islam and Shunsuke Managi (2023), "Natural Capital and Wealth Accounting for Sustainability Assessment: A Global Perspective", International Review of Environmental and Resource Economics: Vol. 16: No. 3-4, pp 431-465. http://dx.doi.org/10.1561/101.00000148

Publication Date: 16 Jan 2023
© 2023 R. Yamaguchi, M. Islam and S. Managi
 
Subjects
 
Keywords
JEL Codes: D63O41Q01
Inclusive wealthwealth accountinggenuine savingssustainable developmentnatural capitalcomprehensive NNP
 

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This is published under the terms of CC-BY.

In this article:
Introduction 
Framework 
Global Natural Capital 
Policy Evaluation: Cost-benefit and Cost-effectiveness Approaches 
Natural Capital Assets 
Population 
Concluding Remarks 
Acknowledgements 
References 

Abstract

Capital assets provide a wide variety of benefits and services to current and future generations. If intergenerational well-being is governed by capital assets, then they should not decline. This is the simple intuition behind nondeclining capital assets as an indicator of sustainability. We review recent developments in the wealth-accounting literature, with a particular focus on global natural capital. Aiming toward climate and biodiversity targets in economies constrained by carbon budgets and planetary boundaries, the wealth index needs to be updated to reflect global scarcities. Inclusive wealth of United Nations and the Dasgupta Review's focus on the conceptual tools of impact inequality, as well as the safe operating space approach, might give us some toolkits to make these changes. Other challenges include spatial and global aggregation and the upscaling of micro to macro. This also calls for utilizing the wealth index for cost-effectiveness, as well as cost-benefit, analysis. Looking at another focus of the inclusive wealth and Dasgupta Review, we touch on the effect of population change on per capita wealth and measurements of well-being in the context of an ever more densely populated planet. Finally, we also discuss that more empirical research is expected to revise approaches to the comprehensive net national product, as well as to wealth accounting.

DOI:10.1561/101.00000148