Adjusted net savings
Also called: Genuine savings, ANS · Topic: Environment and Sustainable Development · NCERT: Beyond NCERT
Meaning
Adjusted net savings (ANS), also called "genuine savings", is a World Bank measure. It shows whether a country is really adding to its total wealth. It starts from normal savings, adds spending on education (building people's skills), and subtracts the natural wealth used up and the damage from pollution:
ANS = net national saving + education spending − energy depletion − mineral depletion − net forest depletion − CO2 damage − particulate damage
A negative ANS means the country is running down its total wealth. Growth like that is not sustainable.
Example
Suppose a country's net national saving is 10% of national income and it spends 4% on education. It loses 6% through oil, mineral and forest depletion and 3% through CO2 and dust damage. Its ANS is 10 + 4 − 6 − 3 = 5%. It is still getting richer overall. If depletion were 12%, ANS would be −1%, a warning sign even with high GDP growth.
Don't confuse with
- Green GDP: this subtracts depletion and degradation from national income. ANS adjusts savings to show whether total wealth is rising or falling.
Related concepts
- Natural capital
- Ecosystem services
- Total economic value
- Contingent valuation
- Hedonic pricing
- Payment for ecosystem services
- Green accounting
- Ecological footprint
- Earth Overshoot Day
- Carbon footprint