In recent years there has been significant development of different valuation methods and many environmental assets and their services have moved from the set without measurements to the set with measurements. In spite of this, it is currently impossible to assess, in monetary terms, the order of magnitude of natural capital inputs (use of natural resources, pollution damages to the natural environment). At present, only natural resources used as inputs for economic activities are being assessed, but losses of, and damages to, environmental assets, which are not used as inputs for these activities, should also be accounted for.
And although, on the one hand, none of the environmental economists would dare to evaluate in monetary terms, for example, the extinction of species. On the other hand, there is a way within the national accounting system, which can gather information about the environmental and natural resource base, related to the availability and use of such resources. The objective of environmental accounting is to: 1) prepare a balance sheet (containing what natural stocks are available and what uses are made of these stocks) and, 2) ensure that the stock accounts and the flow accounts are consistent.
Environmental accounting in physical units was set up in 1974 by the Norwegian government and later by the French government. Currently, according to conclusions of UNEP, the World Bank, and UNSO, the environmental accounts should not be fully incorporated into the national income accounts, but rather a set of satellite accounts should be established that deal with environmental issues. Such accounts could be in physical or monetary terms, or both, and would seek to address the questions of the linkages between the environmental and natural resource base and the economic system, as well as estimating a natural resource balance sheet and working towards a measure of sustainable income. However, the question of what exactly should be measured is not totally resolved (as mentioned above) and the necessary work is only in its infancy (D.W. Pearce, A. Markandya, E.B. Barbier, 1989).
The Fifth Community Programme for the Environment and Sustainable Development has declared: "An environmentally adjusted national account (i.e., to take account of the natural resource stock of air, water, soil, landscape, heritage, etc.) should be available on a pilot basis from 1995 onwards for all Community countries, with a view to formal adoption by the end of the decade." (COM(92)23 final - Vol. II of 27 March 1992, chapter 14.)
It seems evident that neither conventional national accounts (GDP, GNP or NPD) nor physical environmental indicators are capable of monitoring sustainable development. Within a physical environmental accounting system like the Norwegian nad French systems, a unique measure of environmentally adjusted economic development cannot be developed.
R. Repetto (World Resources Institute) has developed an economic resource accounting approach that allows for a depreciation of marketed natural resources. This approach is particularly suited for resource-based (developing) countries and has already been successfully applied in Costa Rica, Indonesia, and the Philippines.
A number of conceptually quite different approaches of integrated systems of environmental and natural resource accounting with valuation have been conceived to approximate a 'green' GPD (Commission of the European Communities, 1993). The CEE countries should join these EC endeavours [3].
A basic feature of H.M. Peskin's (United States) accounting framework is that it treats services of environmental and resource capital as if these services were marketed. Environmental services, on the one hand, and environmental damage, or the denial of environmental services on the other, are valued by different methods, unlike other approaches that include valuation, thus allowing an assessment of the relative efficiencies of environmental policies.
A team of R. Hueting (Statistical Office of the Netherlands) attempts to adjust national income by a "loss of environmental functions" that occurs through rival use of the environment. This loss is valued by shadow prices based on clean-up cost oriented supply curves and demand curves determined by environmental quality standards.
There is one promising method for assessing environmental damages, the EXTASY method (Expert Alert System). This method is based on an expert survey. Experts select the most harmful forms of pollution and assign weights to different individual pollution factors. The main advantage of the EXTASY method is to shorten the time lag between the discovery of environmental problems and their solution (J. Jesinghaus, 1992).