Government
in 2011 had constituted an expert group under the chairmanship of Pratha
Dasgupta from the Cambridge University to develop a framework for green
national accounts, identification of data gaps and preparation of a road map
for its implementation. The system of green national accounting would take into
account the environmental costs of development and reflect the use of precious
depletable natural resources in the process of generating national income. The
need for green national accounts emerged as there was a growing recognition
that contemporary national accounts were becoming unsatisfactory basis for
economic evaluation. “The qualifier ‘green’ signals that we should be
especially concerned about the absence of information on society’s use of the
natural environment.” Double-digit GDP fixation is threatening India’s
biodiversity and its long-term growth and security. Green accounting methods
have estimated the loss of ecological wealth in India. GDP measures the value
of output produced within a country over a certain time period. However, any
depreciation measurements used, will account only for manmade capital and not
the negative impact of growth on valuable natural capital, such as water, land,
forests, biodiversity and the resulting negative effects on human health and
welfare. Over the course of the last fifty years, India has lost over half its
forests, 40 per cent of its mangroves and a significant part of its wetlands.
At least 40 species of plants and animals have become extinct with several
hundred more endangered.
In
“green accounting” approach national accounts are adjusted to include the value
of nature´s goods and services. Mr Jairam Ramesh, the former environment
minister, advocated greening India’s national accounts by 2015 and encouraged
policy makers to recognise the trade-off between pursuing high growth economic
policies against the extensive impact they could have on India’s natural
capital. The Green Indian States Trust (GIST) which, in 2003 unleashed a series
of environmentally adjusted accounts under the Green Accounting for Indian
States Project. According to their results, the loss of forest ecological
services (i.e.soil erosion prevention, flood control and ground water
augmentation) over three years (2001-03) due to declining dense forests was
estimated at an astounding 1.1 per cent of GDP. According to GIST´s latest
results, the North-Eastern states continue to be most affected, particularly
Arunachal Pradesh and Mizoram where the loss of forest ecological services is more
than 12 per cent of their NSDP.
India
expects to put in place in five years a system of green national accounting
that would take into account the environmental costs of development and reflect
the use of precious depletable natural resources in the process of generating
national income. “In the last few months, I have tried to set the ball rolling
so that by 2015 at least we can have a system of green national accounting,”
Union Minister of State for Environment and Forests Jairam Ramesh said here. Economists
estimate gross domestic product (GDP) as a broad measure of national income,
while net domestic product (NDP) accounts for the use of physical capital. “But
as yet, we have no generally accepted system to convert gross domestic product
into green domestic product that would reflect the use up of precious
depletable natural resources in the process of generating national income”, he
said. Economists all over the world have been at work for quite some time on
developing a robust system of green national accounting but “we are not there
as yet”. “Ideally, if we can report both gross domestic product and green
domestic product, we will get a better picture of the trade-offs involved in
the process of economic growth”, the Minister added. India expects to put in
place in five years a system of green national accounting that would take into
account the environmental costs of development and reflect the use of precious
depletable natural resources in the process of generating national income.
A
new global partnership to help developing countries integrate the economics of
ecosystems into national accounting systems has been launched by the World
Bank. The alarming loss of biological diversity around the world is
attributable to the lack of proper valuation of the ecosystems and the services
they provide. The valuation and its integration into national accounts are
expected to lead to better management of natural environments. According to Mr
Robert B. Zoellick, President, World Bank Group, the natural wealth of nations
should be a capital asset valued in combination with its financial capital,
manufactured capital and human capital. The national accounts should reflect
the vital carbon storage services that forests provide and the coastal
protection values that come from coral reefs and mangroves.
The
first phase of the partnership to ‘green’ national accounts has been launched
starting with India and Colombia, which will be in a group of six to 10
countries. A forthcoming World Bank Publication, titled ‘The Changing Wealth of
Nations’, states that the commercial value of farmlands, forests, minerals and
energy worldwide is more than $44 trillion, of which, the developing countries
account for $29 trillion. But, there is more value in the services provided by
ecosystems such as forests, like hydrology regulation, soil retention and
pollination. The partnership initiative builds on ‘The Economics of Ecosystems
and Biodiversity’ (TEEB) project of the United Nations Environment Programme
(UNEP). It will include developing and developed countries, nongovernmental
organisations and the global organisation for legislators. During the initial
five-year pilot period, the programme will focus on how countries can quantify
the ecosystems and their services in terms of income and asset values;
developing ways to incorporate these values into policies on wealth and
economic growth; and evolve guidelines for implementation of the valuations
worldwide, according to a World Bank report. The feasibility studies to
identify priority ecosystems will start soon in India and Colombia, while many
other countries in Africa, Asia, Latin America and Central Europe have evinced
interest to become partners in the pilot programme. India and Brazil lead the
number of countries who are willing to draw on findings from the three-year
study project The Economics of Ecosystems and Biodiversity (TEEB) to make their
economies more environmentfriendly and effectively use the services of nature.
The Brazilian and Indian governments are among those keen to use findings from
The Economics of Ecosystems and Biodiversity (Teeb) project. Final results from
the three-year study were unveiled here at the UN Convention on Biological
Diversity meeting.Nature’s services must be counted if they are to be valued,
its leader said.
Gyanesh
Pandey
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