National income measures like Gross Domestic Product (GDP) and Net Domestic Product (NDP) have been used as measures of the economic progress and standard of living in almost all countries for a long time. Decision makers and researchers use these measures for new policy initiatives and to analyze policy alternatives respectively. The traditional Systems of National Accounting (SNA) are now recognized as inadequate, as they cannot accurately measure the contribution of environment and the impact of economic activities on it due to the exclusion of the non-marketed services provided by natural assets, inconsistent treatment of depreciation on man-made and natural assets, and inadequate representation of the degradation of environment. This gives a false impression of increase in income to the decision makers and researchers, while natural wealth is actually reducing. Hence, green accounting can be useful for sustainable national income accounting and in removing the current biases.

Environmental and natural resource issues have risen to the top of the political ferment during the last two decades. Concerns about energy consumption and the degree to which national forests should be used for timber production or protected wilderness areas are examples of continuing resource policy issues. Environmental problems such as environmental pollution, depletion of the ozone layer and the threat of global warming have drawn national and international attention. When analyzing public policy in the above lines, decision makers often turn to the national accounts. If properly done, national accounting can be a useful instrument for economic analysis and policy evaluation.

National income accounting is one of the most important policymaking tools to appear in the last 50 years. Its measures like Gross Domestic Product (GDP) and Net Domestic Product (NDP) have been used as measures of the economic progress and standard of living in almost all countries. Decision makers and researchers use these measures for new policy initiatives and to analyze policy alternatives respectively. The traditional Systems of National Accounting (SNA) are now recognized as inadequate, as they cannot accurately measure the contribution of environment and the impact of economic activities on environment due to the exclusion of the non-marketed services provided by natural assets, inconsistent treatment of depreciation on man-made and natural assets, and inadequate representation of the degradation of environment. This gives a false impression of increase in income to the decision makers and researchers while natural wealth is, in reality, reducing. Hence, green accounting can be useful for sustainable national income accounting and in removing the current biases.

Managerial Economics Journal, Gross Domestic Product, GDP, Net Domestic Produc, NDP, Systems of National Accounting, SNA, Global Warming, Environmental Management, Gross National Product, GNP, Qualitative Measures, Agricultural Commodities, Green Indian States Trust, GIST, Biological Oxygen Demand, BOD, Chemical Oxygen Demand, COD, Environmental Resources, Natural Resources.