Green accounting is a type of accounting that attempts to factor environmental costs into the financial results of operations. It has been argued that gross domestic product ignores the environment and therefore policymakers need a revised model that incorporates green accounting.

1. GREEN ACCOUNTING
Lilian Mboya
UEAB
Accounting for the Environment
MBA-Accounting

2. ENVIRONMENTAL INDICATORS AND STATE OF THE
ENVIRONMENT REPORTING: TERMINOLOGY
‘Environmental indicators’/’Environmental statistics’ -
biophysical data organised around environmental issues
‘State of the environment report’ – a compilation of
environmental indicators/statistics
‘Environmental accounting’ – monetary, sometimes
biophysical, data organised around economic categories

3. AN ALMOST PRACTICAL STEP TOWARD SUSTAINABILITY
An almost practical step toward sustainability is the title of a lecture given in 1992 by
Robert Solow. Based on the analysis of a simple model economy with Q=Kα
Rβ
with
α+β=1 and β< α, Solow advanced two ‘key propositions’:
1.‘properly defined net national product’ ‘measures the maximum current
level of consumer satisfaction that can be sustained forever’ so it is ‘a
measure of sustainable income’
2.‘Properly defined and properly calculated, this year’s net national product
can always be regarded as this year’s interest on society’s total stock of
capital’
Putting these together gives a rule for sustainability as constant consumption
3.Maintain the total stock of capital by consuming only the interest on it
In the simple model analysed, this implies adding to the stock of reproducible capital,
K, an amount equal to the depreciation of the stock of the non-renewable resource, R.
With depreciation measured as the Hotelling rent arising in extraction this is
Hartwick’s Rule.

4. TWO IMPORTANT HEDGES
For Hartwick’s rule to work in practice, the prices used have to be the ‘right’ ones,
ie to reflect perfect foresight, as eg with the rent evolving according to the Hotelling
Rule. According to Solow it is
Obvious that everyday market prices can make no claim to embody that
kind of foreknowledge. Least of all could the prices of natural resource
products…..The hope has to be that a careful attempt to average out
speculative movements and to correct for other the other imperfections I
listed earlier would yield adjusted prices that might serve as rough
approximations to the theoretically correct ones….The important hedge is not
to claim too much.
There is another ‘hedge’ to be examined shortly. The ‘right’ prices are those that go
with a constant consumption path. They are not those that hold along the optimal
path unless that involves constant consumption, which it will not given standard
assumptions.

5. A RESOURCE OWNER IN A COMPETITIVE
ECONOMY 1
B is the size of the bank account, units £s
C is consumption expenditure, units £s
W is total wealth, units £s
R is the total of permit sales, units tonnes
X is the size of the remaining stock of
mineral, units tonnes
h is the price of a permit, £s per tonne
V is the value of the mine, units £s
i is the interest rate, assumed constant
over time
Bt – Bt–1 = iBt–1 + (1 + i)ht–1Rt–1 – Ct (19.2)
Vt = ht(Xt–1 – Rt–1) (19.3)
ht = (1 + i)ht–1
so
Vt = (1 + i)(Vt–1 – ht–1Rt–1) (19.4)
or
Vt – Vt–1 = iVt–1 – (1 + i)ht–1Rt–1 (19.5)
Then (19.2) and (19.5) in
Wt – Wt–1 = (Bt – Bt–1) + (Vt – Vt–1) (19.6)
gives
Wt – Wt–1 = iWt–1 – Ct (19.8)
where Wt = Wt-1 implies
Ct = iWt–1 (19.9)
and
Ct = iW0 (19.10)

6. A RESOURCE OWNER IN A COMPETITIVE
ECONOMY 2
B is the size of the bank account, units £s
C is consumption expenditure, units £s
W is total wealth, units £s
R is the total of permit sales, units tonnes
X is the size of the remaining stock of
mineral, units tonnes
h is the price of a permit, £s per tonne
V is the value of the mine, units £s
i is the interest rate, assumed constant
over time
Given that PV of x forever is x/i
Ct = iW0 (19.10)
forever gives
W* = W0 (19.11)
Income is
Yt = iBt–1 + (1 + i)ht–1Rt–1 (19.12)
For Wt = Wt-1
Ct = iBt–1 + iVt–1
for which
It = Yt – Ct = iBt–1 + (1 + i)ht–1Rt–1 – iBt–1 –
iVt–1
= (1 + i)ht–1Rt–1 – iVt–1 (19.13)
which by (19.5) is
It = –(Vt – Vt–1) (19.14)
which is Hartwick’s rule.

7. A RESOURCE OWNER IN A COMPETITIVE
ECONOMY 3
For sustainable income as what can be consumed without reducing wealth
Ysus,t = iWt–1 (19.15)
which is Solow’s ‘properly’ measured income – the level of consumption that can be
maintained forever and the interest on wealth.
Would a resource owner choose constant consumption? It depends.
In 11.4.1 it was established that a necessary condition for maximising the discounted
sum of utilities over time, subject to consumption equal to the change in wealth, is (in
the notation used here)
Uct/Uct-1 = (1+ρ)/(1+i)
so that
ρ<i implies Uct<Uct-1 implies Ct>Ct-1
ρ=i implies Uct=Uct-1 implies Ct=Ct-1
ρ>i implies Uct>Uct-1 implies Ct<Ct-1
given the assumption of diminishing marginal utility.

8. Figure 19.1 Optimal and
sustainable consumption
paths
OPTIMAL AND SUSTAINABLE CONSUMPTION
PATHS 1
For a representative agent closed model
economy where
Qt=Kα
tRβ
t : α + β = 1 and β<α
C0
t is the optimal path
CS
0 is the highest feasible level of
constant
consumption at t =0
CS
t is the time path under the optimal plan
for the maximum level of constant
consumption that would thereafter be
sustainable indefinitely – at T, CO
T is
optimal and CS
T is maximum sustainable

9. OPTIMAL AND SUSTAINABLE CONSUMPTION
PATHS 2
Figure 19.1 Optimal and sustainable
consumption paths
At T, having followed the
optimal path, C0
T is not
sustainable.
The maximum constant
consumption level from T on
would be CS
T.
Using the prices and quantities
from the optimal path will not
generally give correct signals
about the future level of
sustainable income.
To get the right signals it is
necessary to use the prices and
quantities that hold at T on the
path CS
T.

10. MEASURING NATIONAL INCOME: THEORY 1
Consumption is the purpose of economic activity, so why is the National
Income measure of economic performance defined as consumption plus
investment?
Because current investment contributes to future consumption.
For
dt)eU(C ρt
0
t
−
∞
∫
tt
C)Q(KK −=
Max
St
tCt
KU)U(C + is a function of current levels of the variables consumption
and investment that gives a single valued measure of
performance in terms of the objective function.

11. MEASURING NATIONAL INCOME: THEORY 2
tCt
KU)U(C +
UC is the marginal utility of consumption. For a linear utility function so that
U(Ct) = UCCt, and using It for the change in the size of the capital stock, this is
UCCt + UCIt
a performance measure in utils. Dividing through by UC gives the
performance measure
NDPt = Ct + It (19.17)
where NDP is Net Domestic Product, also known as NNI for Net National
Income.
From (19.17), NDPt – Ct = It so that Ct>NDPt implies It<0, which implies
Kt+1<Kt and Qt+1<Qt.
For sustainable income as the maximum that can be consumed without
reducing the size of the capital stock, NDPt is sustainable income.

12. MEASURING NATIONAL INCOME: THEORY - TAKING
ACCOUNT OF THE ENVIRONMENT 1
The adjustments to the measurement of national income required on account of
economy-environment interdependence are derived by considering optimal
growth models where the specification of the constraint set reflects the nature of
the interdependence.
For the model which is the basis for Fig 19.1 – production uses a costlessly
extracted non-renewable resource – the result is
EDPt = NDPt – QRtRt = NDPt – htRt (19.18)
where EDP stands for Environmentally Adjusted Domestic Product, QRt is the
marginal product of the resource in production, Rt the amount used, and ht the
Hotelling rent.
The second term on the rhs is the depreciation of the resource stock.
With NDPt = Ct + It, (19.18) is
EDPt = Ct + It – htRt
so that for total net investment zero, It = htRt, the Hartwick Rule, consumption is
equal to sustainable income.

13. MEASURING NATIONAL INCOME: THEORY –
TAKING ACCOUNT OF THE ENVIRONMENT 2
For a model where the extraction of the non-renewable is costly, and new
reserves can be established at cost,
EDPt = NDPt – (QRt – GRt)(Rt – Nt) = NDPt – ht(Rt – Nt) (19.20)
where QRt is the marginal product of the resource in production, GRt is marginal
extraction cost, and Nt is additions to the known stock.
For a model where the resource input is a renewable
EDPt = NDPt – (QRt – GRt)(Rt – F{St}) = NDPt – ht(Rt-F{St}) (19.21)
where GRt is the marginal cost of harvesting, F{St} is the stock’s growth function,
and St stock size.
For sustainable yield exploitation, Rt = F{St} and there is no depreciation –
EDPt = NDPt

14. MEASURING NATIONAL INCOME: THEORY –
TAKING ACCOUNT OF THE ENVIRONMENT 3
Renewable resources, such as forests, can yield amenity services direct to
consumption as well as provide inputs to production.
EDPt = NDPt + (USt/UCt)St – ht(Rt – F{St}) (19.22)
where USt is the marginal utility of standing timber and UCt is the marginal
utility of produced commodity consumption.
Typically USt is unobservable, there is no market price. Chapter 12 methods
are needed.
--------------------------------------------------------------------------------------
These models are not mutually exclusive – production uses non-renewables,
renewables, flow resources. Production and consumption generate waste
flows. The environment provides amenity and life support services. A
comprehensive model needs to capture all such linkages.

15. ENVIRONMENTAL ACCOUNTING: PRACTICE
It is generally agreed that, leaving aside environmental considerations, the proper
measure of economic performance is Net Domestic Product, NDP, which is Gross
Domestic Product, GDP, less the depreciation of reproducible capital. In fact,
GDP is more widely used than NDP. This is, largely, because it is difficult to
measure the depreciation of reproducible capital.
Environmentally driven criticism of current accounting conventions focuses on
three issues
Natural resource depletion - should be treated in the same way as depreciation of
reproducible capital – measurement and valuation problematic
Environmental degradation – air, water and land quality reductions should be
treated as depreciation – how to measure degradation from what benchmark?
Defensive expenditure – , eg clean-up costs, on the environment should be
deducted – why not other defensive expenditure?

16. THE UNSTAT PROPOSALS: SATELLITE
ACCOUNTING 1
System of integrated Environmental and Economic Accounting, SEEA
Balance Sheets and Satellite Accounts
∑−∑= =
−−
=
n
i
ititit
it
n
i
t
vavaEC 1
11
1
(19.23)
Environmental Cost is the change in the balance sheet value, i.e.
depreciation, of all environmental assets, natural capital.
Environmentally Adjusted NDP could be defined as
EDPt ≡ NDPt – ECt ≡ (GDPt – DMt) – DNt (19.24)
where DNt ≡ ECt

17. THE UNSTAT PROPOSALS: SATELLITE
ACCOUNTING 2
SEEA does not envisage national statistical agencies reporting EDP instead of
GNP/NDP.
SEEA does envisage complementing the current GDP/NDP accounts with
balance sheets for natural capital – Satellite Accounts.
Some counties do this already for a limited range of environmental assets – some
of those commercially exploited – eg fossil fuels, minerals, timber. Even in these
cases, measurement of depreciation is problematic, mainly on account of
difficulties with unit valuation.
SEEA does not envisage treating defensive expenditures as part of EC. It does
recommend identifying and reporting environmental defensive expenditures
within the accounting system.

18. THE DEPRECIATION OF NON-RENEWABLE
RESOURCES
The correct measure of the depreciation of a stock of a non-renewable resource
is
D = THR = (P – c)(R – N) (19.25)
where
D is depreciation
THR is total Hotelling rent
P is the price of the extracted resource
c is the marginal cost of extraction
R is the amount extracted
N is new discoveries
In a fully competitive economy would have:
THR = CIV
with CIV for Change in (market) value of the resource stock.
Generally, CIV is not observable. Nor is marginal cost, c.

19. METHODS USED FOR MEASURING THE
DEPRECIATION OF NON-RENEWABLE RESOURCES
Net Price II
D = (P – C)(R – N) (19.26) C for average cost, c>C
Net Price I
D = (P – C)R
Change in Net Present Value
(19.27)
El Serafy’s (user cost) rule
D = R(P – C)/(1+r)T
(19.28)
In (19.27) and (19.28), r is the interest rate, and T is deposit lifetime
∑ +−−+−=
=
∑
=
0
0t
1
T
]r)/(1)RC[(P]r)/(1)RC[(PD
T
t
ttt
t
ttt 1t
Given C rather than c, an estimate of CIV.

20. WEALTH AND GENUINE SAVING 2
With KRt
for reproducible capital and KNt
for natural capital we can write
Wt
= KRt
+ KNt
(19.31)
where W stands for wealth as the aggregate capital stock. For Wt+1
we can write
Wt+1
= (KRt
+ IRt
) + (KNt
+ DNt
)
so that
Wt+1
- Wt
= IRt
+ DNt
which by equation 19.29 is
Wt+1
- Wt
= EDPt
- Ct
(19.32)
so that Wt+1
- Wt
≥ 0 if Ct
≤ EDPt
.
Hence,
Wt+1
- Wt
≥ 0 (19.33)
is equivalent to the expression 19.30 as a test for sustainable development. Wt+1
- Wt
is

21. THEORY FOR AN IMPERFECT ECONOMY 1
dteCUV
t
t
tt ∫=
∞
=
−−
τ
τρ )(
)(
0≥
dt
dVt
0
1
≥∑=
=
N
i
it
it
G
t
dt
dA
pI
The earlier theory supporting EDP as the proper measure of national income was
derived for an optimising economy. Dasgupta (2001),for example, argues that non-
negative genuine saving/investment is a test for sustainable development that does not
require the optimising assumption.
For constant population, social well-being at is
(19.35)
A consumption stream beginning at t = 0 is said to to correspond to a sustainable
development path if at t
Vt+1 ≥ Vt, see Appendix 19.3, is equivalent to
(19.36)
G
t
I dt
dAit
and pit is the accounting price for
asset i
Is
Genuine
saving
Is
Change
in asset i
where

22. THEORY FOR AN IMPERFECT ECONOMY 2
The accounting price for asset i is the change in Vt consequent on an
infinitesimally small change in the size of i at t, other things equal.
Accounting prices depend upon four related factors:
(a) the conception of social well-being,
(b) the size and composition of existing stocks of assets,
(c) production and substitution possibilities among goods and services, and
(d) the way resources are allocated in the economy. ( Dasgupta 2001 p 123)
The price of getting away from results based on the assumption of optimisation
is the assumption that the accountant can forecast all of the utility
consequences of small perturbations in all relevant asset stock sizes through
to the distant future.
And, no differences in the conception of social well-being?

23. PROBLEMS WITH GENUINE SAVING AS A
SUSTAINABILITY
Clearly, no accountant could could have the information for a comprehensive
measure of genuine saving.
The implicit claim must be that aggregating over a wider range of assets
using estimates of accounting prices will produce a better guide to policy
than looking just at investment in reproducible capital.
While plausible, this is not generally true – looking at an extended but
incomplete range of assets may produce a result further from the truth.
Genuine savings/investment results need to be treated with caution as tests
for sustainable development and guides to policy.

24. PROBLEMS WITH GENUINE SAVING AS A
SUSTAINABILITY
Time KR K1
N K1
S K1
H K0
N K0
S K0
H W
0 100 1000 100 100 500 100 100 2000
1 102 950 101 101 550 110 120 2034
Change 2 -50 1 1 50 10 20 34
KR Ke
N Ke
S Ke
H We
0 100 1100 50 50 1300
1 102 1000 51 51 1204
Change 2 -100 1 1 -96
Table 19.9 Numerical example for incomplete genuine saving accounting
Actual genuine saving is 34
Looking just at reproducible capital says 2
Measured genuine saving is –96 - opposite sign to actual.

25. WORLD BANK ESTIMATES OF GENUINE
SAVING
In World Bank (2016), for each country
Genuine saving = Gross Saving (GNI less private and public consumption, plus foreign transfers)
- Depreciation of reproducible capital (replacement value)
+ Educational expenses (public sector operating expenses)
- Depletion of natural resources (energy, minerals and forest depletion using Net
Price I)
- Pollution damages (CO2 damages at $20 per tonne carbon emission)
It is noted that ‘we should be cautious in interpreting a positive genuine saving rate’
as ‘There are some important assets omitted from the analysis’. A negative genuine
saving rate should also be interpreted cautiously.

26. WORLD BANK - GENUINE SAVING IN WORLD
REGIONS
-30
-20
-10
0
10
20
30
World
Middle East and
Africa
East Asia
%
1980 1990 2000 2016
Figure 19.4 Genuine saving for
selected regions and the world
Vertical axis is % of GNI
For the world, genuine saving is
around 10% over 1974-2014
Middle East and Africa strongly
influenced by oil and gas
extraction, and price changes for
such. Results here consistent with
rents being consumed, rather than
invested in reproducible capital.

27. WORLD BANK – TOTAL WEALTH AND ITS
COMPONENTS
Income
group
Produced
capital
Natural capital
Subsoil Timber NTFR Cropland Pastureland Protected
areas
Total
Low 1174 325 109 48 1143 189 111 1925
Middle 5347 1089 169 120 1583 407 129 3496
High OECD 76193 3825 747 183 2008 1552 1215 9531
World 16850 1302 252 104 1496 536 322 4011
Table 19.11 Asset values for income groups and the world, $ per capita
Source: World Bank 2016
Per capita asset values increase with income
Ratio of produced to natural capital value increases with income
Share of natural capital as agricultural land decreases with income
Share of subsoil assets in natural capital increases with income

28. ACCOUNTING FOR INTERNATIONAL TRADE 1
Consider 2 trading economies, 1 and 2. Let x12
be exports from 1 to 2, and x21
be exports from 2
to 1. Let y represent total output, and f represent final demand, comprising c for consumption and
s for saving/investment. We can then write:
y1
= x12
+ c1
+ s1
= x12
+ f1
(19.37)
y2
= x21
+ c2
+ s2
= x21
+ f2
If we define coefficients q12
= x12
/y2
and q21
= x21
/y1
, equations 19.37 can be written as
y1
= 0 + q12
y2
+ f1
y2
= q21
y1
+ 0 + f2
which in matrix notation, using upper case letters for matrices and lower case for column vectors,
is
y = Qy + f
with the solution
y = (I - Q)-1
f = Lf (19.38)

29. ACCOUNTING FOR INTERNATIONAL TRADE 2
Now, let
D1
= DM1
+ DN1
= dm1
y1
+ dn1
y1
= z1
y1
D2
= DM2
+ DN2
= dm2
y2
+ dn2
y2
= z2
y2
where M and m subscripts refer to human made capital and N and n subscripts refer to natural capital, so that we can write
for total global depreciation
D = z1
y1
+ z2
y2
or, in matrix notation
D = z’y (19.39)
where z’ is [z1
z2
]. Substituting for y in Equation 19.39 from Equation 19.38 gives
D = z’Lf
or
T = ZLF (19.40)
where Z and F are matrices with the elements of z and f along the diagonals, and zeroes elsewhere. For the two country case,
Equation 19.40 is:
t t
t t
z l f z l f
z l f z l f
11 12
21 22
1 11 1 1 12 2
2 21 1 2 22 2





 =







30. ACCOUNTING FOR INTERNATIONAL TRADE 3






=





22221212
21211111
2221
1211
flzflz
flzflz
tt
tt
T = ZLF
where Z and F are matrices with the elements of z and f along the
diagonals, and zeroes elsewhere. For the two country case
In the matrix T the row elements give depreciation in a country arising by virtue of final demand
in that and other countries, while column elements give depreciation in all countries by virtue of
final demand in one country. So, row sums, Di
IN
, give depreciation in i, and column sums, Di
ATT
,
give depreciation attributable to i. Thus, in the two-country case here t11
+ t12
is the depreciation
of total capital actually taking place in country 1, while t11
+ t21
is the depreciation of capital in
the global economy that is on account of, attributable to, final demand in country 1.

31. ACCOUNTING FOR INTERNATIONAL TRADE 4
A slight extension of the method of Proops and Atkinson allows for consideration of these issues
on a per capita basis. Let P be the matrix with the reciprocals of population sizes along the
diagonal and zeroes elsewhere. Then, for the two-country case,
A = TP = ZLFP (19.41)
is
so that column sums from A, di
ATT
, give depreciation in all countries attributable to per capita
final demand in country i. And,
B = PT = PZLF (19.42)
is
so that row sums from B, di
IN
, give per capita depreciation in country i on account of global final
demand. These depreciation measures can be compared with si
, per capita saving in i.
a a
a a
z l (f p ) z l (f p )
z l (f p ) z l (f p
11 12
21 22
1 11 1 1 1 12 2 2
2 21 1 1 2 22 2 2





 =






/ /
/ /
b b
b b
(z p l f (z / p )l f
(z p )l f (z / p )l f
11 12
21 22
1 1 11 1 1 1 12 2
2 2 21 1 2 2 22 2





 =






/ )
/

32. SUSTAINABLE DEVELOPMENT INDICATORS 1
Sustainable development indicators – efforts by official agencies, and others, to
provide data on the natural environment and the economy relevant to sustainable
development, other than via modified national income or wealth accounting.
1994 – UK government adopted strategy for sustainable development
1996 – began publication of indicators to monitor progress
Sustainable development indicators in your pocket (DEFRA) is organised around
four ‘priority areas’ ( see also DEFRA website )
Sustainable consumption and production
Climate change and energy
Protecting natural resources and enhancing the environment
Creating sustainable communities and a fairer world
Aggregation to produce a single ‘bottom-line’ indicator is explicitly rejected –
it is not practicable or meaningful to combine all 126 disparate indicator measures
into a single index of sustainable development. Aside from the technical difficulties
involved, some indicator measures are more important than others and key messages
would be lost (DEFRA 2008b)

33. SUSTAINABLE DEVELOPMENT INDICATORS 2 –
ISEW/GPI
ISEW – Index of sustainable economic welfare
GPI – Genuine progress indicator
Daly and Cobb
ISEW ≡ {(C/D) + (E + F+ G + H)– (I + J + K + L + M + N + O + P + Q
+ R + S + T + U) + (V + W)}/Pop (19.43)
C is personal consumption expenditure
D is an index of distributional inequality
E is an imputed value for extra-market labour services
F is an estimate of the flow of services from consumer durables
G is an estimate of the value of streets and highway services
H is an estimate of the value of publicly provided health and education services
I is expenditure on consumer durables
J is an estimate of private defensive spending on health and education
K is expenditure on advertising at the national level
L is an estimate of commuting cost
M is an estimate of the costs of urbanisation
N is an estimate of the costs of automobile accidents
O is an estimate of water pollution costs
P is an estimate of air pollution costs
Q is an estimate of noise pollution costs
R is an estimate of the costs of wetlands loss
S is an estimate of the costs of farmland loss
T is an estimate of the cost of non-renewable-resource depletion
U is an estimate of the cost of long-term environmental damage
V is an estimate of net additions to the stock of reproducible capital
W is the change in net overseas indebtedness

34. THE ECONOMY AND THE ENVIRONMENT AGAIN:
WHAT THE ECONOMY DOES
Environment
Economy
Satisfactions
Extractions
Insertions
Figure 19.6 What the economy does
The economy extracts materials and
energy from the environment, using them
along with capital and labour to produce
the means to the satisfaction of human
needs and wants, and inserts back into the
environment an equal mass of waste
(Chapter 2)
Common (2007a) suggests that a natural
measure of economic performance would
be
E = S/I
with
E for efficiency
S for satisfaction
I for (environmental) input

35. AGGREGATION WITHOUT PRICES
E = S/I
For S use
HLY = H x LY
where HLY is Happy Lifetime Years
H is the average score for self-assessed happiness/satisfaction (Chapter 3)
LY average life expectancy at birth
For I there is no uniquely correct measure. Use as proxies
Energy use – a measure of work done, which is what impacts on the
environment
Ecological footprint – the area of land and water to provide environmental
inputs and absorb wastes
Greenhouse gas emissions – the source of the major environmental problem
now facing the world

36. EFFICIENCY BASED SUSTAINABLE DEVELOPMENT
INDICATORS
1. Each nation’s ghg emission allowance to be its population size multiplied by
an equal per capita share of the set global emissions total. For the ith nation
i
*
i
sPGHG =
P
GHG
s
*
=
where
Country i experienced sustainable development if
Ei,t+1>Ei,t and GHGi,t≤GHG*i and GHGi,t+1 ≤GHG*i.
If, that is, E increased and emissions stayed within equitable
allowance.
2. For F*i as a nation’s share of the world’s available productive
land and water(per capita share of global times population size),
country i experienced sustainable development if
Ei,t+1>Ei,t and Fit ≤F*i and Fi,t+1 ≤F*i
If, that is, E increased and footprint stayed within equitable
allowance.