A formal model of green national accounting demonstrates that 'genuine' saving, net saving less the value of resource depletion and environmental degradation, is a useful indicator of sustainability. Country-level and regional calculations of genuine savings are presented for the period 1970-1993. Sub-Saharan Africa stands out as the region where the greatest dissipation of wealth is occurring. Policy issues are explored.1 Environment Department, The World Bank. The comments of Danny McCoy, David Pearce and three reviewers are gratefully acknowledged. The opinions expressed are those of the authors, who are responsible for any errors.

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The search for sustainability indicators should be guided by a theory of sustainable development (SD). In this paper we investigate two such theoretical frameworks and the indicators that they suggest. Indicators associated with weak sustainability are characterized by aggregative indicators such as green national income. We conclude, however, that a more promising offshoot of green accounting is measures of genuine savings (i.e. savings adjusted for loss of assets). To achieve SD, genuine savings rates must not be persistently negative. Strong sustainability indicators accord a more central role to the conservation of critical natural assets within the broader goal of prudently managing a nation's portfolio of assets over time. We discuss two approaches—carrying capacity and resilience—and conclude that, while measures of resilience are potentially attractive, more research is required regarding the resilience–SD link. However, an important conclusion that we can make is that, even in an economy operating under a strong sustainability regime, genuine savings are still key indicators of SD and are complementary to measures of changes in stocks of critical natural assets.

We set out dollar-valued net national product for an economy with a wasting essential stock (oil deposit). We take up 'maintaining capital intact' and locally unchanging consumption. The percentage change in 'net investment' or 'genuine savings,' relative to the market rate of interest, denotes whether current consumption is rising, constant, or declining. JEL classification: O13, Q28, F0Investir les rentes de´rive´es de l'exploitation d'une ressource e´puisable et le sentier de consommation. On de´finit en dollars le produit national net d'une e´conomie qui a un stock de ressources (un de´poˆt de pe´trole) en train de s'e´puiser. On envisage de maintenir le capital intact et la consommation locale inchange´e. Le changement en pourcentage dans l'investissement net et dans les ve´ritables e´pargnes, en relation avec le taux d'inte´reˆt sur le marche´, de´finit si la consommation courante croıˆt, demeure constante, ou de´cline.

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