Natural resource accounting has been the subject of much recent attention, both from economic theorists, and from govcmment agencies seeking to redefine the way national income is measured in practice. The implicit objective seems t.o be one of generating a more accurate measure of tme changes in economic well being resulting from production and resource-use decisions. Formally speaking, we would like to link. a backward-looking measure of income (consumption plus change in wealth) and a forward-looking measure of income (sustainable consumption). In this paper, I analyse a simple example of a resource-dependent economy, and conclude that it seems in general no index number of "environmentally adjusted'' national income will fulfil such an objective. Regardless of how well environmental adjustment of national income is carried out, the welfare and sustainability implications of economic growth are ambiguous.