A green push for measuring the economy

Measuring the gross domestic product (GDP) of a nation continues to be the main indicator of its economic strength. GDP refers to the market value of all final goods and services produced within a country during a given period of time; a country's average standard of living would then be determined by calculating the GDP per capita.

But environmentalists are quick to point out that such a measurement does not provide a full picture, since it does not account for the environmental damages or losses resulting from the production of goods and services.

Consequently a “Green GDP” would be necessary to factor in environmental costs - such as pollution and depletion of natural resources to name a few - into measurements of economic progress.

But seldom do countries calculate a Green GDP, the obstacles to a calculation being both political and numerical in nature. On the political front there is still an obsession to use GDP figures, since governments seek to portray a constant growth scenario. Inclusion of environmental damage stands to jeopardize this image.

Numerically, calculating a Green GDP often requires officials to compile extra data, often complicated in nature, which is consequently met with resistance.

With the intent to circumvent these obstacles, prominent Chinese economist Niu Wenyuan introduced earlier this month what he terms to be the “GDP quality index,” which serves to measure the economy not just by size, but by sustainability, social equality and ecological impact.

Speaking to the Guardian newspaper, Wenyuan explained, "We shouldn't worship GDP and we shouldn't abandon GDP. Our aim is to have a GDP that consumes fewer natural resources, is less harmful to the environment and has a low social management cost. We want rational, genuine GDP."