A Balance Sheet for Intergenerational Equity: Accounting for Sustainable Communities
Date
2011-08-19
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Abstract
Gross Domestic Product is a touchstone for growth and prosperity. However, this calculative
practice is now dissonant with current natural resource depletion and social strife. The
institutionalized social practice of NEA on which GDP is based, privileges flows over stocks
under the untenable assumption that the stocks to fuel the flows are infinite. Various models of
Genuine Progress Indices have been developed to better proxy community wealth to improve
policy-making. Although some models monetize many of the natural, social and economic
indicators, the values are not recorded on a balance sheet. If the core of intergenerational equity
is community-asset maintenance and the mainspring in accounting is assets, a balance sheet to
monitor community wealth is obligatory. A pilot methodology and balance sheet are proposed,
and valuation techniques are illustrated using the case of CancĂșn's marine parks, vital to the
economic and social fabric of the surrounding community.
Description
Paper prepared for the
2011 European Accounting Association Annual Conference
(Rome, Italy, April 2011)
And for
American Accounting Association Annual Conference
(Boulder, Colorado, USA in August 2011)
Keywords
sustainability, Intergenerational equity