Green Accounting
Green or environmental accounting describes an effort to incorporate environmental benefits and costs into economic decision making. Corporate environmental accounting is concerned with a business's environmental impact, national environmental accounting tries to accomplish the same on a country-level. My research mainly focuses on the latter.
GDP is a poor welfare indicator
The Gross Domestic Product (GDP) is by far the most important economic indicator, not least because it is often considered to be measures of how well we are doing as a nation. While it does a pretty good job of estimating the size of our economy, it is inadequate as true welfare measures.
Time and again, GDP ignores our environment. Even worse, GDP often includes the environment on the wrong side of the balance sheet. If we first pollute and then pay to clean up the pollution, both activities add to GDP. Environmental degradation frequently looks good for the economy.
U.S. Green NNI
Beginning in the 1970s, economists have attempted to adjust GDP to derive a so-called "Green Net National Income (Green NNI)" and bring it closer to a true welfare measure. Official green accounting efforts are now under way in several countries, most notably in China and many European economies. Not so in the United States.
In 1995, Congress halted official green accounting efforts and commissioned a National Academy of Sciences study. That study provides a clear mandate for green accounting. Among its first recommendations was the creation of a set of U.S. timber accounts, one of the more easily measurable natural resources.
This site includes an account of the political economy of greening the national income accounts, an 
NPR story on green accounting efforts in the United States, and a green accounting bibliography.