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This book uses the metaphor “The economy is society's metabolism” as a springboard to develop a rigorous theoretical framework for a better system of national accounts which goes “Beyond GDP” and is relevant to the age of resource depletion. Society is entering a new era in which biophysical limits related to natural resource extraction rates and the biosphere's waste assimilation capacity are becoming binding constraints on mature economies. Unfortunately, the data needed for policy-makers to understand and manage economic growth in this new era are not universally available. All stakeholders need a new way to understand our economy in the context of the biosphere's ability to provide essential natural capital, and we suggest that detailed information about materials, energy, embodied energy, and energy intensity should be routinely gathered, analyzed, and disseminated from a centralized location to provide markets and policymakers with a more comprehensive understanding of the biophysical economy. However, a firm theoretical foundation is needed before proceeding along this new path, which this book is intended to provide.After arguing that the stock of manufactured capital is an important driver of material and energy demands imposed upon the biosphere, a new accounting framework is derived from the laws of thermodynamics to reflect the fact that material and embodied energy accumulate within the capital stock of economic sectors. This framework extends the Energy Input-Output (EI-O) techniques first developed by Bullard, Herendeen, and others to estimate energy intensity of economic products. Implications from the new framework are discussed, including the value of economic metrics for policy-making, the need for physically-based rather than product-based EI-O formulations, a re-assessment of the concept of economic “growth,” and an evaluation of recycling, reuse, and dematerialization. The framework also provides anopportunity to assess an array of definitions for Daly's “steady-state economy” in relation to the ideal of a sustainable economy.The book ends with a list of steps to be taken in creating a more comprehensive system of national accounts:National accounting agencies worldwide should develop and maintain balance sheets of both natural and manufactured capital in addition to national income statementsAll stocks and inter-sector flows should be provided in physical as well as financial unitsIn the US, the Bureau for Economic Analysis (BEA) should restart detailed Capital, Labor, Energy, Material, and Services (KLEMS) reportingNational accounting agencies should routinely estimate the energy intensity of economic products, and all of the above should be estimated and disseminated on an annual basis.

'Comprehensively written - and accompanied with numerous charts, graphs, and case examples - The Road to Sustainability provides a solid introduction and argument for beginning to build a sustainable future. We need to understand sustainability not only in terms of product development or natural resource use, but also in terms of the human impact and footprint on the planet. This book does just that, and much more. Anyone concerned about the future of the planet and the human species place on this planet should read the book. It is not only geared towards economists and other academics, but towards the wider audience of activists, concerned individuals, and people in the process of working towards the future. The two case examples in the back of the book are an excellent addition, clearly discussing how the ISEW model works and can be applied to any municipality, state, country, or other entity. Reading books like this give us hope - hope that is based in science and that is economically sound.'NEW GREAT BOOKS Is the concept of sustainability founded on strong, solid scientific bases? And can this elusive concept be introduced in an economic framework and embodied in people's behavior as well as public and private institutions'decision making? This book presents a view of sustainability that starts from the acknowledgment of physical conditions and limits that humans can no longer neglect. It also includes some epistemological foundations of the concept of sustainability and an historical background. The view is optimistic to the extent that economics, the compass of our industrial society, is open to inputs and suggestions coming from outside orthodox schemes. Transdisciplinary science is one key element of such a change, and this book is a transdisciplinary project. In the field of the criticism of GDP as an omni-comprehensive instrument, the book also describes the methodology of the Index of Sustainable Economic Welfare (ISEW), proposed by H. Daly and John Cobb in 1989. They proposed some revisions to the System of National Accounts and GDP in order to add information for policy makers towards sustainability. Starting with consumption, some adjustments are proposed to allow for inequality of income distribution, environmental problems (such as pollution costs, long term environmental damage, depletion of non-renewable resources) and social issues (such as commuting costs, urbanization costs, public expenditure for health and education). Computations for different nations have shown that ISEW increases together with increasing GDP up to a point, beyond which it stagnates or even decreases, due to the environmental and social pressure of economic growth. The ISEW is a feasible calculation and some experiments at the local level in Italy are presented. Advances in integrating different sustainability indicators (both economic-based and physical-based) are also presented as well as their use under a sustainability viewpoint.