SEEA – The System for Integrated Environmental and Economic Accounting

US national income accounting set the tone for first attempts at incorporating environmental and social concerns into the national accounts [FR 8.1]. The purpose was to modify national income and product, considered to be imperfect measures of national welfare. Similar to the above-described welfare indices (Section 7.1.1), extended income and product accounts and derived measures of economic welfare deducted ‘defensive’ (welfare maintaining) expenditures, and added or subtracted environmental and social externalities to/from the conventional accounts indicators. National statistical offices dismissed welfare measurement as ‘more suitable for research than for statistical compilation’ (United Nations, 1977b). The System of National Accounts (SNA) later confirmed that ‘GDP is a measure of production’, and ‘changes in the value of consumption are not the same as changes in welfare’ (United Nations et al., 1993).