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Where is the Wealth of Nations?

Kirk Hamilton's picture

Ghana. Photo: © Arne Hoel/The World Bank

If you have ever had a conversation with a finance minister couched in terms of hectares of forestland or tons of greenhouse gases, then you appreciate one of the central problems of environment and development. It tends to be a short conversation, and for good reason – talking about the environment and natural resources this way simply doesn’t fit the model used by economists. If we want to reach ministers of finance and development planning we need not only to value the economic contribution of nature, but to express it in the framework of the System of National Accounts (which includes, among other measures, Gross Domestic Product or GDP as the predominant indicator of economic progress used by macroeconomists).