Input-output theory and institutional aspects of environmental policy

National accounting over the years has developed in close interaction with input–output analysis. However, present developments involving core and satellite accounts seem to suggest that this relation will become less close, with possible negative consequences for analysis and policy. In this paper we show that also in the new frameworks the input–output (I–O) table will most likely retain its central place. To illustrate this, we discuss the problem of the choice of policy background principles in environmental pollution abatement. We show that in the case of physical accounts of the NAMEA-type the question of the origin of environmental pollution can be addressed in a novel way. This suggests alternative definitions of the concept of ‘a polluter’, and new rules for the allocation of social cost.