We show that measuring resource depletion in a DHS economy using UN national accounting standards leads to a version of the generalized Hartwick rule (GHR) for sustainability (Hamilton and Hartwick 2005). The path of the accounting price for resource depletion is derived, as is a simple policy rule for achieving sustainability. Empirical simulations quantify the difference between the derived GHR and the standard GHR of Hamilton and Hartwick. Finally, we explore extending the framework to the application of national accounting standards to resource discoveries. Because the UN accounting standards for resource depletion are being applied by statistical offices worldwide, the results have important practical implications.
About the Speaker:
Kirk Hamilton is a Lead Economist in the Development Research Group of The World Bank and co-author of The Changing Wealth of Nations (World Bank 2011) and World Development Report 2010 Development and Climate Change.
He is principal author of Where is the Wealth of Nations? (World Bank 2006) and leads research on the links between poverty and environment, ‘greening’ the national accounts, and the economics of climate change. Previously a senior research fellow at the UK Centre for Social and Economic Research on the Global Environment, Dr. Hamilton has researched and published extensively on growth theory and the economics of sustainable development. He also served as Assistant Director of National Accounts for the government of Canada, where his responsibilities included developing an environmental national accounting program. His degrees include a PhD in Economics and MSc in Resource and Environmental Economics from University College London, as well as a BSc (Eng.) from Queen's University at Kingston.