An Environmentally Extended Social Accounting Matrix

Although the social accounting matrix(SAM) approach has been widely used in nationalaccounting and development economics, it still neglectsimportant information, among which are theinteractions between an economy and the environment. This paper environmentally extends SAM to capture therelationships among economic activities, pollutionabatement activities, and pollution emissions. Anumerical example of the environmentally extendedsocial accounting matrix (ESAM) using Chinese 1990data is presented. The multiplier and structural pathanalyses are applied to the ESAM for assessingenvironmental impacts of pollution-related economicpolicies. The analysis results show that an ESAM canbe a useful tool for environmental policy analysis.