Green gross domestic product
[6] Relative to their costs, companies and policymakers also do not give sufficient weight to the future benefits generated by restorative or protective environmental projects.
As well, the important positive externalities that arise from forests, wetlands, and agriculture are unaccounted for, or otherwise hidden, because of practical difficulties around measuring and pricing these assets.
[4] Similarly, the impact that the depletion of natural resources or increases in pollution can and do have on the future productive capacity of a nation are unaccounted for in traditional GDP estimates.
Therefore, the integration of environmental statistics into national accounts, and by extension, the generation of a green GDP figure, would improve countries' abilities to manage their economies and resources.
Repetto further explored the impact that the failure of resource-based economies to account for the depreciation of their natural capital could have, especially by distorting evaluations of macroeconomic relationships and performance.
[11] The central theme of all of the authors' arguments is that the system of national accounts (SNA), as it traditionally calculates income, omits important aspects of economic development that ought to be included.
[11] One important disagreement on environmentally adjusted indicators is presented by Anne Harrison and Salah El Serafy, in their respective chapters.
[11] Harrison argues that appropriate adjustments ought to be made within the existing SNA framework, while El Serafy suggests a redefinition of what constitutes intermediate and final demand.
These initial results, released in 1994, showed that GDP numbers were overstating the impact of mining companies to the nation's economic wealth.
Mining companies did not like those results, and in 1995, Alan B. Mollohan, a Democratic House Representative from West Virginia's coal country, sponsored an amendment to the 1995 Appropriations Bill that stopped the Bureau of Economic Analysis from working on revising the GDP.
[17] The size of this figure demonstrates the significance of ecosystem services on human welfare and income generation, and the importance of identifying and recognizing this value.
[19] The panel, which addressed this question, concluded that extending the NIPA and developing supplemental environmental accounts should be a high-priority goal for the U.S., because these would provide useful data on a variety of economic issues and government trends, which entailed both replenishing and extractive activities.
[19] One of the major findings of the report is that it is fundamentally necessary for green adjustments to account for instances when natural capital is discovered or replenished, along with general depletive activities.
[22] As an experiment in national accounting, the Green GDP effort collapsed in failure in 2007, when it became clear that the adjustment for environmental damage had reduced the growth rate to politically unacceptable levels, nearly zero in some provinces.
In the face of mounting evidence that environmental damage and resource depletion was far more costly than anticipated, the government withdrew its support for the Green GDP methodology and suppressed the 2005 report, which had been due out in March, 2007.
[20] Independent estimates of the cost to China of environmental degradation and resource depletion have, for the last decade, ranged from 8 to 12 percentage points of GDP growth.
An exercise has started under the country's chief statistician Pronab Sen and by 2015, India's GDP numbers will be adjusted with economic costs of environmental degradation.
"[25] The Global Reporting Initiative's (GRI) core goals include the mainstreaming of disclosure on environmental, social, and governance performance.
Second, that while measurements may not be perfect in the cases of non-market natural assets, the adjustments they entail are still a preferable alternative to traditional GDP.
A second objection may be found in the Report by the Commission on the Measurement of Economic Performance and Social Progress, when Stiglitz, Sen, and Fitoussi remark that: "there is a more fundamental problem with green GDP, which also applies to Nordhaus and Tobin's SMEW and to the ISEW/GNI indices.
