Internalization of external costs and calculation of social capital

Jovanović, Larisa and Munitlak Ivanović, Olja and Golušin, Mirjana (2011) Internalization of external costs and calculation of social capital. In: Proceedings. Vol. 3 / 2nd International Conference Law, Economy and management in Modern Ambience - LEMiMA 2011. Faculty for education of the executives, Novi Sad, pp. 138-145. ISBN 978-86-87333-26-0

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Abstract

External costs for remediation of environmental pollution and depletion of nonrenewable resources usually are not taken into account in the social accounts. All this suggests that the problem of evaluation of environmental external costs is not solved completely. It is certain that System of Integrated Environmental and Economic Accounting (SEEA) provides much more information from the Provisional System of National Accounts (SNA), which is designed as a basis for the development of international compatibility of national accounts. Integrated environmental and economic accounting does not violate the essence of the conventional macroeconomic aggregates. The above deficiencies in the selection of species, numbers and physical quantities that characterize the environmental indicators, and talk about this nonoptimal evaluation of economic wealth of society. For some natural resources are measurable indicators (price and quantity of minerals obtained or catching fish, the prices of fossil exploited resources: oil, coal and natural gas, the percentage of deforestation and the like). However, resources such as water and air can be included in the integrated environmental and economic accounting only through cost recovery or prevention of pollution. The aim of this paper is to address the inadequacy of measuring social capital through the traditional calculation of gross domestic product. It is evident that there is a need of "green" accounting at the macro level.

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