(744a) Application of Green-Accounting Methods for the Assessment of the Chicago Metropolitan Area's Sustainability Trends

Assessment of regional sustainability entails an integrated evaluation of trends in economic wellbeing and environmental indicators. We approach the measurement of sustainability, defined as non-declining utility or non-declining wealth, by resorting to green-accounting methods. This study is part of a multidisciplinary research project that deals with the quantitative assessment of urban sustainability at the US Environmental Protection Agency. In this regard, we explore the sustainability trends of the Chicago Metropolitan Area via two metrics rooted in economics, Green Net Metropolitan Product (GNMP) and Genuine Savings (GS). GNMP adjusts the traditional metric of economic wellbeing, the metropolitan Gross Domestic Product (GDP), by subtracting from it the values corresponding to the consumption of manmade capital and natural capital as well as the monetary values of damages caused by environmental pollution. GS measures changes in the total capital stock (or wealth), including manmade capital, human capital, and natural and environmental capital. Regional sustainability requires that GNMP be non-decreasing, and that GS be non-negative over time. We have estimated GNMP and GS for the Chicago Metropolitan Area (CMA) for the period, 1990-2015. Variation of similar methods have been applied in the literature for sustainability measurements of larger geographical entities, e.g. Heberling et al. (2012); Mota and Domingos (2013); and Wu and Heberling (2016). Environmental variables considered in our assessment are damage cost estimates due to air pollution, solid waste, scarcity rent due to water depletion, and value of ecosystem services of urban forests. In addition, we incorporate the value of time to account for the role of technological progress. With proper adaptation, these methods could be applied for the determination of sustainability of industrial processes and/or products. For example, Demeke et al. (2018) have shown that green-accounting methodologies can be coupled with Life-Cycle Assessment (LCA) to measure the sustainability of an industrial product.

Disclaimer: The views expressed in this abstract are those of the authors and do not necessarily represent the views or the policies of the U.S. Environmental Protection Agency.