In this paper, we explain how the latest international handbook on environmental accounting, the System of Integrated Environmental and Economic Accounting or SEEA (United Nations et al., 2003), can be used to measure weak and strong sustainability. We emphasise the importance of understanding the conceptual differences between weak and strong sustainability. We then outline what we consider to be current best practice in measurement, all the time flagging the relationship between our discussion and that of the SEEA-2003. This is an important task in our view, because, despite covering a very wide range of relevant conceptual and empirical issues, the handbook is by design not meant to provide clear guidelines for the purpose of measuring sustainability in either its weak or strong version.2

Investors and financial regulators are increasingly aware of climate-change risks. So far, most of the attention has fallen on whether controls on carbon emissions will strand the assets of fossilfuel companies. 1,2 However, it is no less important to ask, what might be the impact of climate change itself on asset values? Here we show how a leading Integrated Assessment Model can be used to estimate the impact of 21 st century climate change on the present market value of global financial assets. We find that the expected 'climate value at risk' (climate VaR) of global financial assets today is 1.8% along a business-as-usual emissions path. Taking a representative estimate of global financial assets, this amounts to $2.5 trillion. However, much of the risk is in the tail. For example, the 99 th percentile climate VaR is 16.9%, or $24.2 trillion. These estimates would constitute a substantial write-down in the fundamental value of financial assets. Cutting emissions to limit warming to no more than 2°C reduces the climate VaR by an expected 0.6 percentage points, and the 99 th percentile reduction is 7.7 percentage points. Including mitigation costs, the present value of global financial assets is an expected 0.2% higher when warming is limited to no more than 2°C, compared with business as usual. The 99 th percentile is 9.1% higher. Limiting warming to no more than 2°C makes financial sense to risk-neutral investors -and even more so to the risk averse.The impact of climate change on the financial sector has been little researched to date, with the exception of some kinds of insurance. 3 Yet, if the economic impacts of climate change are as large as some studies have suggested, 4-6 then, since financial assets are ultimately backed by economic activities, it follows that the impact of climate change on financial assets could also be significant.The value of a financial asset derives from its owner's contractual claim on income such as a bond or share/stock. It is created by an economic agent raising a liability that will ultimately be paid off from a flow of output of goods and services. For example, a firm pays its shareholders' dividends out of its production earnings, and a household usually pays its mortgage from its wages. Output is the result of a production process, which combines knowledge, labour, intermediate inputs and non-financial or capital assets. Therefore there are two principal ways in which climate change can affect the value of financial assets. First, it can directly destroy or accelerate the depreciation of capital assets, for example through its connection with extreme weather events. 7 Second, it can change (usually reduce) the outputs achievable with given inputs, which amounts to a change in the return on capital assets, in the productivity of knowledge, 8 and/or in labour productivity and hence wages. 9 Why is it important to know the impact of climate change on asset values? Institutional investors, notably pension funds, have been in the vanguard of work in this area: 10 for them...

'To slow or not to slow ' (Nordhaus, 1991) was the first economic appraisal of greenhouse gas emissions abatement and founded a large literature on a topic of worldwide importance. We offer our assessment of the original article and trace its legacy, in particular Nordhaus's later series of 'DICE' models. From this work, many have drawn the conclusion that an efficient global emissions abatement policy comprises modest and modestly increasing controls. We use DICE itself to provide an initial illustration that, if the analysis is extended to take more strongly into account three essential elements of the climate problem -the endogeneity of growth, the convexity of damage and climate risk -optimal policy comprises strong controls.

ABSTRACT. Genuine saving is a measure of net investment in produced, natural and human capital. It is a necessary condition for weak sustainable development that genuine saving not be persistently negative. However, according to data provided by the World Bank, resource-rich countries are systematically failing to meet this condition. Alongside the well-known resource curse on economic growth, resource abundance might have a negative effect on genuine saving. In fact, the two are closely related, as future consumption growth is limited by insufficient genuine saving now. In this paper, we apply the most convincing conclusion from the literature on economic growth -that it is institutional failure that depresses growth -to data on genuine saving. We regress gross and genuine saving on three indicators of institutional quality in interaction with an indicator of resource abundance. The indicators of institutional quality are corruption, bureaucratic quality and the rule of law. We find that reducing corruption has a positive impact on genuine saving in interaction with resource abundance. That is, the negative effect of resource abundance on genuine saving is reduced as corruption is reduced.