The green gross domestic product (green GDP) is an index of economic growth with the environmental consequences of that growth factored in. Green GDP monetizes the loss of biodiversity, and accounts for costs caused by climate change. Some environmental experts prefer physical indicators (such as "waste per capita" or "carbon dioxide emissions per year"), which may be aggregated to indices such as the "Sustainable Development Index".
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This is an idea that has gained in popularity over the past 20 years, ever since the Rio Earth Summit in 1992. in 1993 the Bureau of Economic Analysis, the official bookkeeper of the U.S. economy, began responding to concerns that the GDP needed retooling. The agency began working on a green accounting system called Integrated Environmental and Economic Accounts. 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 didn't 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 and that's where things stand today.[1] [2]
In 2004, Wen Jiabao, the Chinese premier, announced that the green GDP index would replace the Chinese GDP index itself as a performance measure for government and party officials at the highest levels. The first green GDP accounting report, for 2004, was published in September 2006. It showed that the financial loss caused by pollution was 511.8 billion yuan ($66.3 billion), or 3.05 percent of the nation's economy.[3] 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.[4]
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.[5] These estimates support the idea that, by this measure at least, the growth of the Chinese economy is close to zero.
The most promising national activity on the Green GDP has been from India. The country's Environmental Minister, Jairam Ramesh, stated in 2009 that “It is possible for scientists to estimate green GDP. 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."[6]
Global Reporting Initiative: GRI’s core goals include the mainstreaming of disclosure on environmental, social and governance performance. Although the GRI is independent, it remains a collaborating centre of UNEP and works in cooperation with the United Nations Global Compact. GRI produces one of the world's most prevalent standards for sustainability reporting - also known as ecological footprint reporting, Environmental Social Governance (ESG) reporting, Triple Bottom Line (TBL) reporting, Corporate Social Responsibility (CSR) reporting. It is currently working on a Green GDP to be implemented worldwide.