Green accounting

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Green accounting is a type of accounting that attempts to factor environmental costs into the financial results of operations. It has been argued that gross domestic product ignores the environment and therefore decisionmakers need a revised model that incorporates green accounting.[1]


The term was first brought into common usage by economist and professor Peter Wood in the 1980s.[citation needed]


It is a controversial practice however, since depletion may be already factored into accounting for the extraction industries and the accounting for externalities may be arbitrary. It is obvious therefore that a standard practice be established in order for it to gain both credibility and use. Depletion isn't the whole of environmental accounting however with pollution being but one factor of business that is almost never accounted for specifically. Julian Lincoln Simon, a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute, argued that use of natural resources results in greater wealth, as evidenced by the falling prices over time of virtually all nonrenewable resources.[citation needed]

See also[edit]


  1. ^ Sjak Smulders (2008). "green national accounting," The New Palgrave Dictionary of Economics, 2nd Edition\. Abstract.
  • Schaltegger, S. & Burritt, R.: Contemporary Environmental Accounting: Issues, Concept and Practice. Sheffield: Greenleaf, 2000 ISBN 1-874719-65-9

External links[edit]