Green GDP needed

The recent smog that shrouded large parts of China has shown it is imperative that the country thoroughly assess the environmental impact of economic activities: A system to measure "green GDP" is needed.

A pilot system to evaluate the gross domestic product of the ecosystem in a northern desert, launched on Monday, is the latest attempt to measure the value of an ecosystem.

Similarly, some research teams have developed accounting systems to assess the country's net GDP output minus the environmental losses caused by economic activities.

Such assessments are important since GDP does not take into account any environmental costs incurred during economic expansion and so creates a false impression of economic prosperity.

New green GDP assessment methods can help the government and public better grasp the real environmental impact of the country's economic activities, and enable the devising of policies that better balance economic growth, and environmental conservation and quality of life.

The government has developed its own methodology to calculate green GDP. In 2006, environmental protection and statistics departments released a report claiming that economic losses caused by environmental degradation accounted for nearly 5 percent of the national GDP in 2004. It is regrettable that the government has stopped releasing such data since then.

Indeed, it is technically very difficult to calculate the real economic value of environmental changes, and the various green GDP calculation systems in use are all disputable. But it is an essential task not only for China but all countries and organizations, although it will take time for a mature and internationally accepted system to be worked out.

It is generally believed that it is not technical limits but local governments that have prevented such data from being released. Such data releases might affect the promotion prospects of local officials.

It is clear that if China wants to press on with the uphill task, it must first reshuffle its performance assessment methods for government officials.

Currently, economic development measured by GDP remains a crucial gauge of local officials' performance and capabilities, which is why they care more for economic expansion rather than environmental protection.

(China Daily 02/27/2013 page8)