Green GSDP for Sustainable Development

Abstract

Conventional measures of national income and wealth do not account for environmental and social costs of development. Therefore, they may mislead long-term economic forecasts for an economy. It is therefore necessary to develop a system of accounting of natural resources, which is likely to provide ample support to design the economic system, in such way that it is possible to attain economic growth without destroying natural resources. Hence, the concept of green accounting has increasingly been accepted and promoted by national and international organizations. This system of greening our accounts would provide an improved parameter of measuring development as compared to GDP growth alone. Green GDP shall measure sustainability of development and would be an appropriate and valuable decision-making aid in economic planning. The study discusses the accounting framework for forestry accounting in the context of SEEA and provides the framework and methodology for compilation of forestry accounts. It attempts on economic valuation of few ecosystem services, viz. carbon sequestration, soil conservation, water recharge, water purification and pollination and seed dispersal services from the forests of Karnataka, India. The study also highlights the ‘glaring lack of data’, ‘standardized methodologies’ and ‘standardized accounting units’ for ascribing an economic value to intangible services deriving from forest resource as the main reason for it not being included in the accounting part of conventional GDP.