10-January-2025-Editorial

GREEN GROSS DOMESTIC PRODUCT (GREEN GDP) AND ITS IMPORTANCE

Green GDP is an innovative approach to measuring economic growth that incorporates environmental costs.

Unlike traditional GDP, which focuses solely on economic output, Green GDP highlights the true value of natural resources and the impact of environmental degradation.

Chhattisgarh has set a remarkable example by becoming the first Indian state to link its forest ecosystem to Green GDP, showcasing the integration of economic development with environmental sustainability.

What is Green GDP?

Traditional GDP:

• Measures the annual value of goods and services produced in a country.
• Has been a global economic standard since 1944.
• Ignores environmental health, resource depletion, and social well-being.

Green GDP:

• A modified GDP framework that accounts for environmental costs like resource depletion and ecosystem degradation.
• Provides a more holistic view of a nation’s wealth.

Need for Green GDP:

• Traditional GDP overlooks sustainability and long-term environmental impacts.
• Green GDP ensures economic growth aligns with environmental preservation and social welfare.

Formula:

• Green GDP = Net Domestic Product (NDP) − (Cost of Natural Resource Depletion + Cost of Ecosystem Degradation).
• NDP = GDP − Depreciation of Produced Assets.
• Natural Resource Depletion: Loss of value due to overuse of resources.
• Ecosystem Degradation: Damage caused by deforestation, pollution, and other environmental harms.

Chhattisgarh’s Green GDP Initiative

Role of Forests in Chhattisgarh:

• Highest increase in forest cover in India (683.62 sq km in 2023).
• Forests cover 44.2% of the state’s area, absorbing carbon dioxide and mitigating climate change.
• Forest products like tendu leaves, lac, honey, and medicinal plants support rural livelihoods.
• Sacred groves like Sarna and Mandar hold cultural and spiritual significance.

Implications of Linking Forests to Green GDP:

• Highlights both economic and ecological value of forests.
• Promotes a balance between development and sustainability.
• Preserves resources for future generations, ensuring environmental health.

How Does Green GDP Promote Sustainable Development?

Sustainable Resource Use:

• Reflects environmental damage in economic measures.
• Aligns with SDG 12 (Responsible Consumption and Production).
• Encourages sustainable production and consumption.

Climate Change Mitigation:

• Reduces reliance on fossil fuels.
• Promotes renewable energy.
• Aligns with SDG 13 (Climate Action).

Biodiversity Conservation:

• Protects ecosystems and species.
• Aligns with SDG 15 (Life on Land) and SDG 14 (Life Below Water).
• Guides policies balancing growth with ecological health.

Incentivizes Green Investments:

• Supports sustainable technologies and industries.
• Creates green jobs and promotes inclusive growth.
• Aligns with SDG 8 (Decent Work and Economic Growth).

Global Practices of Green GDP

United Nations:

• Developed the System of Environmental-Economic Accounting (SEEA).
• Integrates economic and environmental data for a comprehensive view of sustainability.

European Union:

• The “Beyond GDP” initiative incorporates sustainability metrics into economic assessments.

World Bank:

• Leads the Wealth Accounting and Valuation of Ecosystem Services (WAVES) initiative.
• Promotes sustainable development through natural resource accounting.

Bhutan:

• Gross National Happiness (GNH) framework includes ecological sustainability.

Other Countries:

• Nations like China, Norway, and the US have experimented with environmental accounting in GDP.

Challenges of the Green GDP Framework

• Forest Cover Definition: Includes plantations like oil palm and rubber, which may harm biodiversity and ecosystems. Risks misrepresenting ecological health in Green GDP calculations.
• Political Agendas: States with low ecological forest value may manipulate data for grants. Prioritization of plantations over natural forests could lead to environmental harm.
• Local Body Integration: Involvement of local governments like Panchayats is challenging due to limited awareness and literacy.
• Lack of Clarity on Benefits: Unclear how financial gains from Green GDP accounting will reach forest-dependent communities.
• Methodological Differences: Absence of a universal calculation method hinders global comparability. Valuing environmental costs is complex and varies by region.

Way Forward

• Standardized Framework: Develop a consistent methodology for Green GDP calculations. Clearly define environmental services and costs.
• Public Transparency: Ensure data is accessible and open to scrutiny to prevent manipulation.
• Focus on Quality: Prioritize restoring native forests over plantations to enhance biodiversity and carbon sequestration.
• Community Awareness: Educate the public about Green GDP’s benefits. Incentivize local communities for preserving forests to ensure equitable outcomes.

Conclusion

Green GDP offers a transformative way to measure economic progress while accounting for environmental sustainability. By linking forests to Green GDP, Chhattisgarh has demonstrated leadership in fostering development that respects ecological balance. Scaling up this framework, addressing challenges, and promoting awareness will ensure that Green GDP becomes a key tool for achieving sustainable and inclusive growth