Note4Students
From UPSC perspective, the following things are important :
Prelims level: Green GDP
Why in the News?
For the first time in India, Chhattisgarh has introduced an innovative framework that integrates the ecosystem services of its forests into the calculation of Green Gross Domestic Product (Green GDP). This initiative highlights the critical role forests play in supporting both environmental sustainability and economic growth.
Highlights of the Chhattisgarh’s Plan
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About Green GDP
- Green GDP is an alternative metric for assessing economic growth that includes the environmental costs of economic activities.
- It subtracts the value of natural resource depletion and environmental degradation from traditional GDP to provide a more accurate picture of economic well-being.
- Introduced in the 1993 United Nations Handbook of National Accounting: Integrated Environmental and Economic Accounting under the System of Environmental-Economic Accounting (SEEA) framework.
- Key Features:
- Aims to measure the sustainability of economic growth.
- Focuses on valuing ecosystem services like carbon sequestration, soil conservation, and water resources.
- Provides insights into the trade-offs between economic growth and environmental conservation.
- Calculation:
- Green GDP = Traditional GDP – Costs of Environmental Degradation – Costs of Resource Depletion.
Government Initiatives for Green GDP Accounting
- Green National Account Framework: It integrates environmental considerations into national accounting systems. It captures the value of natural resources, costs of pollution, and benefits of ecosystem services like clean air and water.
- System of Environmental-Economic Accounting, 2012 (SEEA): It was adopted by India under UN guidelines to create databases for natural capital accounting and informed policymaking.
- RBI Estimates: Green GDP for 2019 was ₹167 trillion, reflecting a 10% adjustment from traditional GDP. It is supported by organizations like TERI and Indian Statistical Institute to refine valuation methodologies.
Challenges in Implementing Green GDP
- Lack of comprehensive and reliable data on environmental costs and ecosystem services.
- Dependence on subjective assumptions reduces the accuracy of Green GDP estimates.
- Assigning monetary value to ecosystem services like biodiversity, cultural heritage, and climate regulation is challenging.
- Critics argue that such values may oversimplify or commodify nature’s intrinsic worth.
- No universal framework exists for calculating Green GDP.
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