Abstract
In conventional system of national accounts, the depletion of natural capital is not accounted for. It is therefore, important to incorporate their contribution to the national income accounts correctly to indicate sustainable income. Applying user cost method resource depletion is estimated and (SNA) adjustment is made in this study. Two sustainability indicators of Pears-Atkison measure and World Bank’s genuine saving were carried out to measure the economic sustainability of Peninsular Malaysia with respect to forest resource extraction. A detail economic and environmental valuation may provide more accurate policy signal for sustainability. However, this may allow possible strong sustainability test to interface the economy and ecology.
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