green accounting

The inclusion of economic losses caused by environmental degradation in traditional profit and loss accounting systems.

The idea arose in the 1980s when financial factors, and in particular profitability, were the main tool for judging the value of an action. By such crude measures, killing elephants for ivory, destroying tropical rainforest for hard wood, and continuing whaling, all make economic sense. However, if the future value of these resources are included, so that for example tourism, protection of biodiversity, and ecosystem stability are all given a notional economic value, it becomes plain that even in terms of pure profitability it makes no sense to destroy habitats or hunt animals to extinction.