Environmental damage to be counted in GDP
By Qin Chuan (China Daily)
Updated: 2004-09-02 00:28

An experimental framework for calculating green GDP in China has been set up, vice-minister of the State Environmental Protection Administration Pan Yue said Wednesday.

The pilot system will be implemented in some regions as soon as possible, he said.

Green GDP (gross domestic products) is an amendment to GDP that deducts the cost of environmental damage caused by economic development.

As China's economy is growing rapidly but its environment has been worsened in turn, environment officials and experts have been calling for the adoption of green GDP in the country.

Some experts said if environmental costs are deducted, China's average annual GDP growth between 1985 and 2000 would drop by about 2 per cent.

Since March, the administration and the National Bureau of Statistics have been co-operating in research of green GDP.

At a recent forum on green GDP, two reports on the basic theories of green GDP were discussed.

Experts said the reports construct the framework for basic green GDP theories in China and set the foundation for the country's green GDP calculations.

By the end of the year, the administration may release calculations on the cost of pollution between 1998 and 2003, Pan said.

Meanwhile, six provinces will be selected as pilot regions to adopt green GDP.

But Hu Tao, chief economist of the Policy Research Centre for Environment and Economy is not so confident of the results.

Though green GDP is a good idea, it is technically hard to implement, Hu said. Many countries are studying green GDP, but to date no one can calculate green GDP in any real sense.

The economy and the environment are two different variables that cannot be covered by one single calculating system, he added.

Alongside green GDP, environment officials and experts have urged that environmental protection should naturally be included in the country's system for officials' job performance assessment.

Feng Dongfang, a researcher with the administration's Policy Research Centre, said environmental protection is too tiny a part of the country's system to assess officials' performance.

Feng said some regions in China have started to make environmental protection a more important criteria. Such regions include South China's Guangdong Province, Chongqing, North China's Hebei Province and Southwest China's Sichuan Province, said Feng Dongfang.

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