Sustainable National Income: A Trend Analysis for the Netherlands for 1990-2000

66 Pages Posted: 25 Aug 2007

See all articles by Marjan W. Hofkes

Marjan W. Hofkes

VU University Amsterdam - Department of Economics; VU University Amsterdam - Institute for Environmental Studies (IVM); VU University Amsterdam

Reyer Gerlagh

Tilburg University - Center and Faculty of Economics and Business Administration

Vincent Linderhof

Wageningen Economic Research

Date Written: June 8, 2004

Abstract

This paper presents a trend analysis of the Sustainable National Income (SNI) indicator for the Netherlands over the period 1990-2000. The SNI indicator, first proposed by Hueting, corrects net national income (NNI) for the costs to bring back environmental resource use to a 'sustainable' level. We use an applied general equilibrium (AGE) model specifying 27 production sectors given a set of pre-determined sustainability standards. The AGE model is extended with emissions and abatement cost curves, based on a large data set for nine environmental themes. The numerical results indicate that, over time, SNI moves closer to NNI. In addition, we apply a 4-factor decomposition analysis of the SNI trend to identify the underlying forces of economic development. Overall productivity growth led to an increase in NNI and a less than proportional increase in SNI (scale effect). Changes in composition of the economy had a small effect on SNI (composition effect). Emission intensities substantially decreased and led to lower emissions and an increased SNI (technique effect). Finally, during the sub-period 1995-2000, many new emission-poor technologies became available but were left unused, leaving actual emissions unchanged but increasing SNI (abatement effect).

Keywords: sustainable national income, general equilibrium models, accounting, decomposition

JEL Classification: H23, O31, O41, Q42, Q43

Suggested Citation

Hofkes, Marjan W. and Gerlagh, Reyer and Linderhof, Vincent, Sustainable National Income: A Trend Analysis for the Netherlands for 1990-2000 (June 8, 2004). Available at SSRN: https://ssrn.com/abstract=1009284 or http://dx.doi.org/10.2139/ssrn.1009284

Marjan W. Hofkes (Contact Author)

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands

VU University Amsterdam - Institute for Environmental Studies (IVM) ( email )

De Boelelaan 1087
1081 HV Amsterdam, 1081 HV
Netherlands

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Reyer Gerlagh

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Vincent Linderhof

Wageningen Economic Research ( email )

P.O.Box 29703
The Hague, 2502 LS
Netherlands
+31 70 3378396 (Phone)

HOME PAGE: http://vincentlinderhof.wordpress.com

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