In this article, we will be discussing green GDP, its impact on sustainable development.
What is GDP?
Gross Domestic Product, shortly known as GDP is an indicator that shows the total value [monetory] of goods and services produced within a country within a period (yearly or quarterly). This is the indicator for a country to measure the economic growth rate.
GDP is calculated by summing up all the nation’s personal consumption expenditure, government spending, total exports, and net capital formation.
What is Green GDP?
Green gross domestic product or (Green GDP, GGDP ) is an index of economic growth by considering the environmental factors. Green GDP acts as an index of economic growth with the environmental implications of that growth that is related to the nation’s conventional GDP.
The concept of the Green GDP is developed because of the limitation of conventional GDP. Conventional GDP can not address the impact of environmental impacts. It only calculates the gross output in terms of asses and wealth without considering how much environmental loss has been made. In today’s modern world, the environment is a great source of assets for any country. There should be any loss in the environment as it impacts the long term resources.
So, the concept of GDP is changed now and redefined to “the three pillars on which an analysis of society ought to rest are studies of the economic, socio-demographic and environmental phenomenon”.
Green GDP For Sustainable Development
Green Gross Domestic Product is directly connected with the sustainable development of any nation. It is because Green GDP is calculated by considering the environmental impact while producing goods and services. Since the sustainability of any country highly depends upon natural resources. There should not be a loss in the environment during, and after the production of the materials. This is why Green GDP helps in the sustainable development of a country.
The formula of Green GDP
Green GDP = GDP – Value of environmental degradation – X [X = Expenditure used to clean environmental pollution].
If you like our articles, consider following us on our social media accounts for more regular updates.