Table of Contents
GREEN GDP
• GDP computations indicate the economic activity in a country, with rising GDP growth rate often leading to international prestige.
• However, such estimates often exclude the variations in natural capital by assuming them to be constant and indestructible.
• When pollution happens, it is actually a depletion of our natural capital as, for example, acid rain damages forests and industrial seepage affects water quality.
• In a modern economy, the challenge is to estimate such depreciation to natural capital.
• A few years ago, India suffered a cost of $550 billion, about 8.5% of GDP, due to air
pollution, according to a World Bank report.
• the cost of externalizes such as water pollution and land degradation were possibly
far higher.
• Through commodity exports, we transfer natural capital to our trade partners, raising
the risk of desertification and land being degraded significantly.
Externalities of economic growth:
• While India might have a GDP of $2.65 trillion in nominal terms,
• India routinely suffers from high levels of air pollution that impose costs on
local transport, health and livability in urban and rural areas
• When economic growth leads to the destruction of forests, wetlands and woodlands for agriculture, mining or even urban expansion, it is typically the poorest of the traditional dwellers who suffer.
• ‘India’s current national accounts incorporate environmental considerations in a limited fashion’.
• GDP includes the value of: minerals extracted; timber, fuel wood and non-timber
forest products; natural growth of cultivated assets for some crops; and the output from
dung manure.
• In addition, ‘gross fixed capital formation contains output estimates from the improvement of land along with irrigation works and flood control projects.
• India has sought to unveil “green GDP” figures in the past.
• In 2009, the Centre announced that it would publish a “green GDP” that would include the environmental costs of degrading and depleting our forests, grasslands and natural stock.
• An expert programme, sponsored by the Ministry of Statistics and Programme Implementation, released a Compendium of Environment Statistics 2013.
• The group recommended that India shift to a system of measuring comprehensive national wealth, which includes items such as human capital, capital equipment
and natural capital.
• While the 12th Five Year Plan undertook groundwater resource mapping at the national level, a similar focus is essential for data on land usage, forests and mineral wealth.
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