Green GDP

In our presentation today we touched on India looking at as part of their GDP measurement measuring the impact on the environment. A committee has been set up in New Delhi to try and have a Green GDP in place by 2015 – they are ‘making a case for an economic growth that “protects and enhances” the ecosystem”.
My opinion is that the traditional method of measuring the economy through the GDP is no longer suitable. The current GDP calculation does not take into consideration to impact the economic activities have on the environment and also the influence the environment makes to the GDP.
The environment provides us with raw materials and energy while absorbing waste in the ecosystem. The measurement of GDP allows for depreciation of MMK but the NK are not valued and therefore depreciation not allowed for.
I found a few different articles with discussion of a green GDP but I decided to attached this interesting  video about some of the limitations of the current calculating of the GDP.

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Posted in climate change, corporate sustainability, sustainable development
2 comments on “Green GDP
  1. Caroline says:

    Excellent video Jane – I found it really thought provoking. For instance, what other metrics do we commonly use that ignore or obscure important data? An example of this is the way unemployment figures are routinely manipulated by governments – classifying particular groups of people as not unemployed (young people, the disabled).

    The video also made me think about the standards by which we create our metrics, and as an accountant, I thought first of international accounting standards. This is also something that struck me today as we looked at the EEE and CER. How do we measure and value NK? I know that accounting does not have the capability at the moment to measure the value of a tree or a clean waterway, and I wonder whether we need to develop something that will allow us to do so. This report – Accounting for Nature: A Model for Building the National Environmental Accounts of Australia (http://www.wentworthgroup.org/docs/Accounting_For_Nature.pdf)
    suggests standards at the national level for measuring the environmental accounts of Australia.
    Does anyone know if this is something happening at the or for the corporate level at the moment?

  2. jeremy says:

    With respect to international accounting standards, there is the Global Reporting Initiative (GRI), which is growing in popularity. At the macro level I love Bhutan’s GNH index 🙂

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